Firstly, the other party, the claimant, must issue you, the defendant, with a pre-action Letter of Claim before issuing Court Proceedings against you for Debt and/or Breach of Contract. I recommend that you deny the claim so that the claimant must issue contested Part 7 Court Proceedings for damages plus interest and legal costs as opposed to following the undisputed debt recovery route of serving you with a Statutory Demand for repayment in the debt in full within 21 days prior to filing a court petition for your company’s insolvency.
If the parties cannot agree an economic settlement following service of the Letter of Claim, the onus is on the customer to issue Court Proceedings against you. There is a six-year limitation period for a claimant to issue Court Proceedings against a Defendant for breach of contract, otherwise the claim is statute-barred and the claimant will not be able to issue court proceedings against you without the Court’s express permission for the claim to proceed out of time.
If you want to claim damages for wasted costs and unpaid invoices from claimant, you must pursue them yourself. I suggest that you approach them in polite but firm terms. If these requests are refused or ignored, I suggest that you send pre-action Letters of Claim to the workers and issue Court Proceedings against all those workers who refuse to pay you back in one set of Part 7 Proceedings.
Once the claimant has issued Part 7 Court Proceedings against you and should you wish to claim a contribution and/or indemnity against the claimant, you may issue Proceedings under Part 20 of the CPR so that your customer’s main claim, your defence to it, and your claims against the workers are included in the same set of court proceedings.
If the total value of the parties’ respective claims is over £10,000, the claim will be allocated to the Fast-Track system of the County Courts. If it is over £25,000 it will be allocated to the Multi-Track. These Tracks are very formal and legally technical, and it is expected that both parties will instruct solicitors to conduct the litigation and barristers to represent them at Trial. The normal rule on the Fast and Multi Tracks is that the winning party (either at a Final Hearing, or through a negotiated settlement) may expect to receive most of their legal costs from the losing party.
I strongly recommend that you instruct specialist commercial dispute resolution and court litigation solicitors to advise you and conduct the litigation. If you cannot afford legal costs upfront, you should contact your businesses’ insurers and ask if they will cover your legal costs under a legal expenses insurance policy. They will either pay your solicitors’ fees or appoint a law firm on their panel of solicitors to act for you.