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JimLawyer
JimLawyer, Solicitor
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I have a freelance client that is refusing to pay, His

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Hello, I have a freelance client that is refusing to pay
JA: Where is the client? It matters because laws vary by location.
Customer: His company is registered in the uk but he lived in Cyprus lives
JA: What steps has the client taken so far?
Customer: the total was 1500euros he has paid the 1000
JA: Is there anything else the Lawyer should know before I connect you? Rest assured that they'll be able to help you.
Customer: Basically, from the beginning of the project I have been bullied because I am a mum, I have been belittled, ridiculed, and bother initial payments were late 500 each time and now for the last part, my client has expressed that he was not satisfied.

Hello, this is Jim and welcome to JustAnswer. I will be the lawyer working with you today.
Sorry to hear of the issue. I will set out my written answer shortly.

If he has a limited company in the UK, and your contract was between you and the company - you will need to sue the company (as it is a separate legal entity to himself). If the contract is with him personally, you will need to sue him and he is based in Cyprus so that means it is slightly more complex. I will cover both options for you.
1. Suing the limited company (I presume it is a limited company and he is not registered as a sole trader or a partnership in the UK).

I would recommend that you send the company a formal letter before action to demand payment within 14 days and say that if they do not pay you, you will issue county court proceedings against them. See attached template as an example of what to say. Please let me know if you cannot see the letter which I have uploaded. You will need to tailor this letter to your situation.

You may also want to threaten a report to Trading Standards (who can be contacted on 0808(###) ###-####.

You will need to register at https://www.moneyclaim.gov.uk/web/mcol/welcome so that you are ready to issue the claim in the event they dispute the claim and do not pay you. The website is very user-friendly and you would not need a lawyer to use the money claim site.

Claims with a value of under £10,000 are classed as a "small claim", so legal costs are not recoverable and the matter may be dealt with on paper by a Judge, not at a hearing. This means the parties are on an equal footing, so you don’t need to worry about legal costs if you lost.

A hearing may be necessary if the court thinks that oral evidence is required to dispose of the case.
Here is a user guide for the money claim online site: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/762843/mcol-userguide-eng.pdf

The court will then issue the claim and they will send you "notice of issue". The papers are served on the defendant who then has 14 days to acknowledge the claim - they do this by filling out an acknowledgment of service and they post it to the court. They indicate their intention when they do this, i.e. whether they admit the claim in full or partly, or if they deny the claim. If they want to defend the claim then their defence is due by 28 days from the date the court served them with the papers. The central court processing centre then sends the claim to the defendant's home county court for case management and directions - the directions will give a list of dates which you both must comply with. If there is no settlement then the claim will be dealt with at a final hearing which takes anything from 9 to 12 months from when you start the claim - longer if the claim is higher value. You can pursue the claim yourself or use a law firm. For the hearing you can use an advocate if you wish, though it's not compulsory. I have details of law firms and advocacy agencies if you would like those. Though in a small claim you won't be able to recover their charges from your opponent. A small claims hearing is easy to do, it's quite informal and no lawyer is required.

Claims between £10,000 and £25,000 are subject to fixed costs only so if you lose then the risk is minimal. Further, the money claim website allows you to sue for an amount up to £100,000.

You would claim the sum for the loss, the court issue fee (details of the money claim fees are listed here at page 5:https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/904862/ex50-eng.pdf) and court interest which is 8% calculated on a daily rate from the date of loss to date of court judgment.

So for example if you were owed £10,000, interest would be £2.20 per day, which you can also claim.

The site allows you to calculate the interest and add it to the claim. If a hearing is required then there is a fee for this too - see page 7 of the previous link for details. Again, that fee is recoverable if you win.

If you are on a low income or have low savings (or in receipt of benefits), you can ask the court for a fee remission so you do not have to pay the court issue fee.

If you are eligible, let me know as you cannot use the online money claims site – you have to use the paper method, which is an N1 claim form sent to the County Court Money Claims Centre (I have a copy, let me know if you would like one).

If you win then once you have the CCJ from the court the defendant has 14 days to pay in full. If they do not then it gets registered with the credit agencies after 30 days. You can also enforce the CCJ with the county court bailiffs or transfer the debt to the High Court for a small additional fee assuming the total amount owed is at least £600 and you can use the high court enforcement officers who have greater powers than county court bailiffs. The transfer fee is added on to the debt and payable by the defendant.

There are other enforcement methods which I can help with, including bank account freeze, charging order on their property (and then apply to force a sale), application to wind up the company if £750 or more is owed (if suing a limited company), apply to summons them to court for questioning, all of which can ensure you are actually repaid the money.

You may find they just pay you after receiving the letter before action – hopefully they will want to avoid litigation. If you prefer a law firm to do this for you, the following is an example and they offer a fixed fee : https://stormcatcher.co.uk/practice-areas/dispute-resolution/small-claims-lawyer-service/
2. Suing him personally - being based in Republic of Cyprus (in the EU).

You can sue them and ask the UK court for permission to serve the claim abroad. You need the defendant's address in Cyprus for the purposes of the claim form.

You need forms N1 and N510, available here :

The N510 - the first tick box at section 2 is required to be ticked. You then send 3 copies to County County Money Claims Centre, PO Box 527, Salford, M5 0BY for the court to issue.

You must include the issue fee - the fee depends on the sum claimed. The fee is listed on page 5 (under court issued claim) : https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/904862/ex50-eng.pdf

If you pay the fee it needs to be made payable to HMCTS, or your an pay by phone if you ring the court on 0300(###) ###-####/p>

The court will return them to you, you then serve them on the shop by posting them with N215 (available here: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/952023/n215-eng.pdf).

The papers are served on the defendant who then has 14 days to acknowledge the claim - they do this by filling out an acknowledgment of service and they post it to the court. They indicate their intention when they do this, i.e. whether they admit the claim in full or partly, or if they deny the claim.

If they want to defend the claim then their defence is due by 28 days from the date the court served them with the papers. If there is no settlement then the claim will be dealt with at a final hearing which takes anything from 9 to 12 months from when you start the claim - longer if the claim is higher value. You can pursue the claim yourself or use a law firm. For the hearing you can use an advocate if you wish, though it's not compulsory.

Note, if they fail to respond to the court proceedings then you can ask the court for judgment in default - meaning you win in a matter of weeks and you then have a CCJ against the defendant.

I have details of law firms and advocacy agencies if you would like those. Though in a small claim you won't be able to recover their charges from your opponent. A small claims hearing is easy to do, it's quite informal and no lawyer is required.

Once you win then the judgment can be registered at their local civil court for enforcement assuming they still refuse to pay you.

You may find they just pay you after receiving the letter before action – hopefully they will want to avoid litigation.

I hope this helps?

Letter template you can use :

(insert name and address) (insert date)

LETTER BEFORE ACTION

Dear Sirs,

Re: Claim for (insert sum)

I refer to the above matter. (Insert details of the dispute).

This letter is being sent to you in accordance with the Pre-Action Protocol (“the Protocol”) contained within the Civil Procedure Rules (“CPR”). In particular, I refer you to paragraph 7 of the Protocol, and paragraphs 13 to 16 of the Practice Direction on Pre-Action Conduct and Protocols regarding the Court’s powers to impose sanctions for failing to comply with the provisions of the Protocol.

I therefore put you on notice of my intention to issue county court proceedings against your company for my losses should I not receive payment in full by 4 pm on (insert date 14 calendar days).

Should court proceedings be necessary I will claim the court issue fee and statutory interest. Should I succeed in obtaining a judgment, same will be transferred to the High Court for enforcement against you whereby further costs will be added to the judgment sum.

I trust the above will not be necessary and I therefore look forward to hearing from you as a matter of urgency.

Yours sincerely,

(insert name)

I hope this helps and answers the question - my goal is to ensure you are happy with the answer and have the information you need. If you have any follow up questions then please let me know. I will reply as soon as I can to help with any further queries.

Many thanks,
Jim

Please let me know if the answer helped or if you need me to cover anything else?. I am happy to clarify the answer or if you have any follow up questions. If so, I’d be grateful if you would let me know. I am free most days, including weekends, so feel free to ask me anything you are unsure of.

Best wishes,

Jim

JimLawyer and other Law Specialists are ready to help you
Customer: replied 11 days ago.
Hi Jim thank you so much for the above. I am checking now the company is dissolved https://find-and-update.company-information.service.gov.uk/company/12040830
Customer: replied 11 days ago.
how does this change things for me?

Thanks, ***** ***** the limited company no longer exists so you cannot sue it unfortunately. You would have to apply to reinstate it to the register before you can sue it - but it is only worth suing a limited company if it has the means to pay your claim which is unlikely in the circumstances.
You could go with option 2 above - pursue him directly. A director can be personally liable if they ran the company and entered in to a contract with you knowing the company couldn't pay (i.e. insolvent).

Customer: replied 11 days ago.
Isn't it illegal to operate a company that is dissolved?

He cannot run a dissolved company as it no longer exists. He can still trade doing the same line of business but it either needs to be as a sole trader, in a partnership, or he starts up another limited company.