Letter before Action Protocol leading to Money Claim

[aubrey_fairlop]

Hello everyone, I have some specific question that I have not been able to find answers to and I hope someone can help.

I am preparing to send a Letter before Action (LBA) to a business associate of mine, and I want to obey the Pre-Action Protocol in order to ensure that should it progress to a court claim via moneyclaim.gov.uk that it not be thrown out for failure to do so.

I am owed £2,000 by the client for an invoice that was delivered in October 2018. The goods were collected prior to issuing the invoice. They acknowledged receipt of the invoice, and have repeatedly promised to pay but delayed - 9 times over 6 months - all over email or archived text messaging (these documents have all been archived and saved for reference).

I have not previously threatened legal action.

Can I make a claim now with moneyclaim.gov.uk without contacting them again? This has been suggested to me...

Or am I required to send an LBA before filing the claim with the courts?

If so when I issue the LBA:

- Is it valid if I send via email? I will copy a third party business associate of theirs on the email.
- Or must I also send via registered signed-for post?

- Pre-Action Protocol ( justice[.]gov[.]uk/courts/procedure-rules/civil/rules/pd_pre-action_conduct ) Implies that I need to allow fourteen days after sending the LBA and before filing the claim. Is that true? I have read several times on this forum that terms of seven days, or even less are valid to demand a reply or to settle the outstanding invoice, before filing a claim with the court. They have now had 6 months to 'reply' is it still necessary to allow them fourteen days? Or have I met Pre Action Protocol on this term already?

- As far as I know the client is a sole-trader individual and the address they provided for the invoice was a home address. I invoiced them as an individual but the commissioned goods were then sold-on under a company name which as far as I know is not registered LTD with Companies House, and she is styling herself as a business rather than actually trading as a business. Is it necessary to know this information before filing with moneyclaim.gov.uk?

Finally, can someone explain to me the difference between a filing a court claim with moneyclaim.gov.uk and a Statutory Demand for Payment?

Is there anything I should know besides the obvious about Pre-Action Protocol?

I sincerely appreciate any advice you can provide. Because the amount is so small at £2,000 I am not able to approach any law firm or lawyer about help in this matter because their commission will be negligible and their fees unworkable in relation to that amount.

Thank you,

Aubrey

 

[TheWebDesignCompany]

Thats horrible, we have been in similar situations over the years, I hope you get it sorted.

 

[aubrey_fairlop]

Thats horrible, we have been in similar situations over the years, I hope you get it sorted.

Thanks for replying, have you ever issued an LBA demanding payment? Did you elicit the help of a Solicitor or organisation to do so? Was the client a sole-trader or individual or a registered company?

Thank you so much for any help you can give, I'm adrift here and hoping to rely on others' experience in similar situations.

Thank you

 

[simon field]

Statutory demand is seen as the 'Nuclear Option', which means you're intending to wind their company up. It's an expensive option compared to MCOL, but if used as a bluff 'MAY' and that's a big 'MAY' have the desired effect a lot quicker than the painfully slow claim process (6-12 months in most cases)

Have they got any money?

Edit: Yes, always send a letter before action in any case. Worth getting a Thomas Higgins style letter drawn up, it's only a few quid.

 

[aubrey_fairlop]

Thank you Simon that is helpful. That is more or less the conclusion that I had come to regarding Statutory demand vs. MCOL.

As far as I know they are a sole-trader (individual) trading-as or styled-as a company but not registered with companies house under that name. So 'winding them up' as an individual is not really my desire. I just want to get paid asap.

They definitely have the money.

They are just being difficult or flaky or feigning incompetence as a way to disguise fairly cut-throat business practise (the drunken-monkey style of business conduct if you catch my meaning). It's standard behaviour in this industry in my experience - art and antiques dealing - but this is the first time it has gone this far.

I am about to send a Thomas Higgins letter actually, just waiting on a quote from another Solicitors for a similar letter as they seem like a more reliable outfit, however very likely about 5 times the cost. Then I will make the call. I think it better to come from a solicitor - even an automated service like Thomas Higgins - rather than myself as an email; they would probably offer another excuse.

People on this forum seem to suggest Thomas Higgins a lot, why is that? Are there no other solicitors in the UK which offer this service? It's takes 2 min to draft one of these form letters and the collect £10 or 20 why isn't every office in the UK doing this. Lovett's wouldn't help me they said they only work on business to business claims and not with sole-traders (I guess it's about a credit check protocol perhaps...).

Thanks again!

 

[aubrey_fairlop]

It seems that as of October 2017 there are indeed different protocols that apply to Partnerships and Ltds. and that Individual Sole-Traders require a different protocol. I'm looking into this now...

 

[White Collar Legal]

The Pre-Action Protocol for Debt Claims is for any claims made by a business (including sole traders and public bodies) against an individual (including a sole trader). It sounds like from your original post you should follow that protocol.

The Thomas Higgins letter (at least as of December 18) does not comply with the Protocol.

A LBA (or LOC) should be sent before Court proceedings are issued. All protocols say that litigation (court proceedings) should be a last resort.

The protocols do also say that if you fail to comply with the protocol, the Court may penalise you as to costs. For this type of claim, this could mean that even if you are successful with your claim, you may not recover your court fees back.

The difference between filing a Court claim with Moneyclaim and Statutory Demand is for a statutory demand to be issued against an individual, the debt must be at least £5,000. Further, for SD, it must be an undisputed debt. If it is disputed and you serve an SD, you run the risk of an application being made against you to set aside the SD which can cost you dearly. This would in any event result in you having to issue a claim with MCOL.

MCOL can be used for any size of money claim from £25 upwards and is a way to determine both liability and the amount.

Here, the only option you have is issue proceedings unless you know of any other creditors that are owed money and then you can pool your debts together to break the £5K limit.

 

[aubrey_fairlop]

Thank you for your reply.

Yes it seems as though the Pre-Action Protocol for Debt Claims is the protocol to follow. Is that's also known as a PAP letter (which is also an LBA letter).

I wont be filing a Statutory Demand as you explain because the amount is not in excess of £5k.

However you say that the only option here is to issue proceedings - you mean MCOL proceedings - following the LBA (or PAP) letter which I have yet to send.

How do you provide a cheaper alternative to solicitors? Do you work as an individual or with a firm?

FYI here is the latest from Thomas Higgin's I recently registered with them to look into the service they provide:


Stage 1 - Letter Before Action

Your options are; Letter Before Action (LBA) Late Payment Demand (LPD) and Pre-Action Protocol Letter Before Action (PAP). These are all letters before action.

If your debtor is a Partnerships or a Limited companies please choose either; LBA or LPD (which also claims

interest and compensation) this gives 7 days for payment to be made (£10.00 plus VAT).

For individuals and sole traders, choose PAP (£20.00 Plus VAT).

 

[White Collar Legal]

Hi Aburey

We are a law firm but we are not a firm of solicitors. Our rates are up to 67% less than a typical firm. We are insured and regulated.

As you will note from the Protocol, there are certain things that must be complied with, including provision of certain information.

I've had clients come to me to defend claims made by TH and I've seen the actual letters used. However, the last was December 18 and so I cannot say for certain what they are doing today.