Thank you very much for clarifying. If you had entered into an agreement for the supply of services and the customer cancelled at the last minute, even without a contract, you can argue that they have acted in breach of contract by not giving you at least a reasonable notice to allow you to reduce your costs and losses. They could therefore be liable for such costs, specifically if you could not avoid them or reduced them.
Whilst they may try and use the pandemic as a reason for the cancellation, that does not mean you have t be left out of pocket as a result and whilst you cannot charge them for basic or usual expense of running a business mike administrative costs, you can make them liable for extra/additional costs, which you have paid for their booking and which you cannot cancel, or get back.
As far as their threats are concerned, whilst a party can make demands for payment, instruct debt collectors or threaten legal action, it is important to note that they can only really force someone to pay if they actually go to court, submit a claim and are successful with it.
There is, however, no guarantee that they will actually ever go that far. Many people issue threats and demands, without ever having the intention of taking the matter to Court. This is done in the hope that the scare the other party into complying with their demands to avoid the risk of being taken to Court. However, until a formal notification of a Court claim has been issued, there is never a guarantee that a claim will actually be made and it could always remain just a threat, rather than reality.
Even if a claim was made, due to the value of compensation sought, this matter would be assigned to the Small Claims Court. This is a relatively low-risk option because it is specifically aimed at the smaller, legally unrepresented parties. The costs of claiming are not that high, there is no need to have a lawyer and incur further costs as a result and even if a party loses the claim, they will not be liable to pay the other side’s legal fees. All they would have to pay is the court fees, which at most will be several hundred pounds and whatever the Court has decided should be paid to the claimant as a result of their original claim.
Also, once judgment has been issued, on the assumption you lose, the judgment is entered on the Register of Judgments, Orders and Fines, where it will remain for 6 years. This is what is known as ‘having a CCJ’ and can impact your credit rating. However, if payment of the judgment is made within one month, the record will be removed from the Register and will no longer be visible. If payment is made after one month has passed, it will still remain on the Register for the 6 years, but will be marked as ‘satisfied’.
To conclude, it is possible to wait and see how far the other side is willing to take this before deciding on how to respond and even if a claim is made, it is possible to proceed and defend the claim in the knowledge that the financial risks of doing so will not be astronomically high and if any judgment made against you is paid within a month, there will be no further repercussions.