Invoice deductions after two months

[Kevin.k]

Hello,

I really need some advice on this situation I am in. I would really appreciate any advice you can give.

I worked for a contractor back in 2019. This April, they contacted me again as they needed help on a similar project. I accepted and finish the work on the 20th of June.

I invoiced on 7th June and 20th June for all the work done (29k). After chasing for payment, I got the run around such as them getting it signed off or this or that, but will pay soon.

On 18 Aug, I had an email. – 60% for “putting work right” and a massive reduction of hours worked that was invoiced. Plus, the miss two of my invoices out.

I sent emails disputing this, tried to resolve it. They paid me 7k.

On 10th Sept, I had an email proposed a final account but again with massive deductions.


What can I do from here?

Make a money claim online?
Can I send a statutory demand form sd1?

Surely, if they only started complaining two months after the invoice. Without sending any formal complaint or even asking me to retune to fix poor workmanship?

 

[paulears]

Money claim - you won't want to work for this shower again, will you.

 

[Deleted member 335660]

Hello,

I really need some advice on this situation I am in. I would really appreciate any advice you can give.

I worked for a contractor back in 2019. This April, they contacted me again as they needed help on a similar project. I accepted and finish the work on the 20th of June.

I invoiced on 7th June and 20th June for all the work done (29k). After chasing for payment, I got the run around such as them getting it signed off or this or that, but will pay soon.

On 18 Aug, I had an email. – 60% for “putting work right” and a massive reduction of hours worked that was invoiced. Plus, the miss two of my invoices out.

I sent emails disputing this, tried to resolve it. They paid me 7k.

On 10th Sept, I had an email proposed a final account but again with massive deductions.


What can I do from here?

Make a money claim online?
Can I send a statutory demand form sd1?

Surely, if they only started complaining two months after the invoice. Without sending any formal complaint or even asking me to retune to fix poor workmanship?

Well if it was me I would ask for a face to face meeting with whoever gave you the contract and sort out why they believe they had to redo the work ( showing you proof of need) and try and agree on a settlement.

Alternatively I would right a letter to your contact laying out your position and giving them a deadline before you will start legal action.

I am not sure if this is within Small Claims Court terms but if it is, complete the forms and enclose a copy in the letter. Don’t pay fee or take action until they have responded.

 

[smallclaimsassistance]

You need to be speaking to a solicitor. This is not small claims material, and you should not be attempting this yourself unless you know what you are doing.

Dean

 

[Frank the Insurance guy]

What do you do? Are you in IT and if so do you have Professional Indemnity Insurance?

I assume you think you did everything right?

They are saying they have made deductions for "putting work right", which implies that you have done something wrong, which has resulted in them incurring additional costs to correct it.

If this is the case then your Professional Indemnity Insurance policy will help you - contact your insurer straight away and let them know what is happening and that a client has made allegations against you that you have done something wrong. Your Insurers will then take this on and pay all defence costs and expenses.

In the abscence of Insurance, you will need to take legal action on your own, or pay a lawyer to do it.

I would start by requesting details of exactly what you did wrong and copy of invoices/evidence of the costs they have incurred in putting it right. Without knowing what you did wrong you cannot really comment.

 

[Paul Norman]

1. This will need resolving via the legal system, or by negotiating between the two of you. It is unlikely that you will receive all this money.

2. Never give £29k worth of credit. To anyone. Unless you really can afford to

3. In this type of work, keep the payment terms short. Invoice 1 needs to be cleared before the date for issuing invoice 2. And if it isn't, you don't show up to continue the work.

I hope you recover all this. If I am honest, I am dubious as to whether you will. Assuming that your work was, in fact, fine, this is probably just how they make their money.

 

[Ian J]

Well if it was me I would ask for a face to face meeting with whoever gave you the contract and sort out why they believe they had to redo the work ( showing you proof of need) and try and agree on a settlement.

What he said

 

[Mark T Jones]

In line with the above, you have 3 courses of action open to you - that is after meeting/talking with the responsible parties.

1. Write it off to experience & walk away.

2. Go through the MCOL process without incurring huge costs.

3. Go full-on legal with the costs & energy that it entails.

Personally I'd probably go option 2.

The key points being that it is a very litigious sector, and I suspect they are well versed in the system. Add to that there will definitely be a vague/unquantifiable element in the quality of work done.

And learn the lesson!

 

[smallclaimsassistance]

2. Go through the MCOL process without incurring huge costs.
Personally I'd probably go option 2.

No 2 is NOT an option.

This claim is for £22,000. It will not be dealt with in the Small Claims Track. It will be dealt with as a Fast Track case, which means that, even if the OP decides not to engage lawyers, their opponent may well do so, and for that sum, probably will. Having run this themselves with the costs savings that brings, if the OP loses, they may well, and probably will, incur the "huge costs" of their opponent.

In fact, the claim amount is very close to the Multi Track limit, and if, for reasons of complexity - numerous reasons why the opponent may argue this, such as witness numbers, expert evidence required, trial likely to last more than 1 day etc etc, especially if represented by solicitors - the case may be allocated to the Multi Track. THEN you're potentially looking at legal costs which could eclipse the claim value, if you lose.

Also, "loses" in Fast Track and Multi Track litigation can, and frequently does, include winning for the wrong amount.

Again, for sums which will take the disputed amount outside the scope of the Small Claims Track, you should not be attempting this yourself unless you know what you are doing.

Dean

 

[Kevin.k]

Thank you so much for all the replies. I kept it very simple and left out a lot of details, as there's a lot here to unpack.

Well if it was me I would ask for a face to face meeting with whoever gave you the contract and sort out why they believe they had to redo the work ( showing you proof of need) and try and agree on a settlement.

We had a Zoom meeting, that resulted in their email of proposed a final account. I have provided all my evidence, but they are just not interested.

You need to be speaking to a solicitor. This is not small claims material, and you should not be attempting this yourself unless you know what you are doing.

I am up against a multi-million-pound company. Most of my funds we into paying my guys' wages, accommodation, food, travel, etc. Solicitor cost a lot, not saying I can't afford one. Just taking this to court will nearly kill me. Then again this has caused a lot of damage to me already. I am at a point where it seems I have to fight.

What do you do? Are you in IT and if so do you have Professional Indemnity Insurance?

I am in construction, painting and decoration.

I assume you think you did everything right?

Without me on that job, they would have gotten into a lot more trouble.

More details;

This was on a new hotel (big chain) There was a painting contractor already there. (They have never done a painting job before and that's not their trade. Their good painters left) That's when the main Contractor X gave him my number. He called me asking and pleading for help. I don't know this guy and it would be unwise of me to travel over the other end of the UK to help out an already struggling contractor. I said that I would work for the main Contractor X has I worked for them before, I know they got the money and this is the same thing that happened before.

I worked for a contractor back in 2019, a different hotel (local to be) They kicked off the painting contractor. I went in fixed all the problems, had teams working day and night. got paid. The fun fact is I actually bidded on the 2019 project but was too expensive. The senior project manager even put my name forward for the contract that I am now in dispute with, he was also the senior project manager of it.

I had calls with Contractor X, told them how much I wanted per hour verbally on a call they then confirmed it in eamil. Again I worked a minimum of 12hrs + most days. Part of their dispute is on the hours. (1) They reword my invoice/timesheets as per day not by the hour. Despite emails thanking me for me working and constantly emailing me and other contractors to work longer and weekends to finish the project.

When I got on-site, half the painters were labours. I informed Contractor X and kept highlighting the fact that they need skilled painters. it only got worse, massive labour shortage, most people they did send there were very underskilled. It got to the point where if you said "I could paint" your in. Take in mind I only had 3 guys on site including me. We were likely the only qualified painters. We kept fixing the general work by others. There were a few other good ones but most were bad. I sent emails stating and asking for more skilled painters. Halfway through the other contractor who had the painting contact, basically pulled his labour and left. I stayed to the end and finished the bulk of the work, even set them up a local snagging team if needed.

Helped pulled their arse out of the fire again. Even tho it was not my contract, I become the de facto guy running it. Left got thanked, put in the invoices. Two months after.. complaint after I finish and Contractor X is.

The only reason for all the disputes is the painting budget likely run over 100k. To my amazement, they did not remove the original contractor who had the painting contract and paid him for most of the work. This is likely due to him have other projects booked in with them.

That's it in a nutshell. lol

 

[Mark T Jones]

No 2 is NOT an option.

This claim is for £22,000. It will not be dealt with in the Small Claims Track. It will be dealt with as a Fast Track case, which means that, even if the OP decides not to engage lawyers, their opponent may well do so, and for that sum, probably will. Having run this themselves with the costs savings that brings, if the OP loses, they may well, and probably will, incur the "huge costs" of their opponent.

In fact, the claim amount is very close to the Multi Track limit, and if, for reasons of complexity - numerous reasons why the opponent may argue this, such as witness numbers, expert evidence required, trial likely to last more than 1 day etc etc, especially if represented by solicitors - the case may be allocated to the Multi Track. THEN you're potentially looking at legal costs which could eclipse the claim value, if you lose.

Also, "loses" in Fast Track and Multi Track litigation can, and frequently does, include winning for the wrong amount.

Again, for sums which will take the disputed amount outside the scope of the Small Claims Track, you should not be attempting this yourself unless you know what you are doing.

Dean

From my reading of the post the amount due is Circa £10K

 

[smallclaimsassistance]

He says the job as a whole cost 29k, and he's been paid 7k.

 

[Mark T Jones]

He says the job as a whole cost 29k, and he's been paid 7k.

Perhaps the OP can clarify - my reading is that they were paid 40%, then a further £7K

 

[Kevin.k]

Perhaps the OP can clarify - my reading is that they were paid 40%, then a further £7K

The value of the invoices amounts to £25,822.50 for labour and £3,476.59 for accommodation costs. total of £29,299.09. They have paid £7,125.00.

£22,174.09 outstanding. My end.

There's almost zero chance of them paying the accommodation bill at the moment.

Out of the £25,822.50 labour, I Invoiced them. They are only accepting £18,620.00 -hours of deductions, then they say -£5,182.00 (rework) Deduct Previous payments of £7,500.00 (meant to be £7,125.00) outstanding balance according to them is £5,938.00

Recently we came to a partial agreement. I said it was unfair to deduct hours and deductions of rework. I think they were going to remove -£5,182.00 (rework) so they would offer me £11,120.00

Again this was over 2 weeks ago now. They are dragging their feet. To be honst I want more of the money they owe me.

 

[Michael Gerard]

Apology for being late to this thread.

Since you are in the construction industry, you can refer the matter to adjudication, which is very quick (28 day process), and could prove very effective.

If your invoices have been issued correctly (ie, in accordance with the payment mechanism under the contract - and that can be either written terms or implied terms), and your client has not served a valid and / or timeous payment notice and / or a pay less notice, then you have a good chance of obtaining an adjudicator's decision for the entire amount (this is called a 'smash and grab'). Alternatively, you can refer the body of the dispute if the notices are present.

That said, the first step is to engage a professional that specialises in construction disputes, including construction adjudication, to see if you have a good case.

If your case is assessed in a positive way, I suggest that the specialist that you engage prepares for the adjudication, and just before you formally serve, send a draft copy [of the Notice of Adjudication] over to your client (with a very firm letter pointing out you are about to adjudicate and the chance is that you will win), and make a WP offer to settle before you make the referral to adjudication, and give your client say 48 hours to accept - can sometimes work and the payer pays up.

Failing that (and subject to any arbitration clause in the contract), you will need to draft and issue a Letter of Claim pursuant to the CPR Pre-Action Protocol for Construction and Engineering Disputes - do NOT file and serve a Claim Form before you you go though the CPR Pre-Action Protocol, otherwise you will face cost consequences.