Overcharged invoices

[Maggie1212]

Hi guys,

We started working with a contractor a few months ago. He turned out to be unreliable, so we just found someone else.
It was agreed from the beginning that he would cover orders lost in the post. He was also supposed to refund any orders that were cancelled due to his negligence, i.e. late despatch.

It turns out that even though he confirmed very single refund, he never actually credited our account. It's not a huge amount - under £1000, but the guy is an a-hole and I'm not in the mood to let this slide.

I emailed him about it but he has not responded yet.

This looks like a deliberate attempt to overcharge us, so this can't be legal. What are the repercussions for him if we take him to court?

In the meantime, can we charge him interest on money owed, and if so, how much is reasonable?

Thank you in advance!

 

[Blaby Loyal]

What are the repercussions for him if we take him to court?

Depends on what kind of business 'him' is. If it's an individual and they know how to play the system then there is very little you can do to enforce a payment even if you do get judgment against them. As the debt is below £5,000 then bankruptcy is not an option.

If the 'him' is a limited company then you are pretty much in the same boat as with an individual. If the company has no tangible assets then you have nothing to enforce your judgment over. You could petition for a winding-up order but that will cost far more than you are owed and the chances are they you won't get any money back that way either.

In the meantime, can we charge him interest on money owed, and if so, how much is reasonable?

Yes, you can. Statutory interest is base rate plus 8%. Interest is intended to be compensatory and not punitive so you'll be lucky to get 3% I'd say.

If there is a contract in place and that contract has a provision for interest then that rate must be used in place of statutory interest. Again though, if that rate is disproportionate then a judge can look to override it. Whether a judge would do that on an agreed term of a contract is a different matter.

Put it this way, if you do nothing you'll get nothing: if you do something you might get something and could get all.

 

[Maggie1212]

What are the repercussions for him if we take him to court?

Depends on what kind of business 'him' is. If it's an individual and they know how to play the system then there is very little you can do to enforce a payment even if you do get judgment against them. As the debt is below £5,000 then bankruptcy is not an option.

If the 'him' is a limited company then you are pretty much in the same boat as with an individual. If the company has no tangible assets then you have nothing to enforce your judgment over. You could petition for a winding-up order but that will cost far more than you are owed and the chances are they you won't get any money back that way either.

In the meantime, can we charge him interest on money owed, and if so, how much is reasonable?

Yes, you can. Statutory interest is base rate plus 8%. Interest is intended to be compensatory and not punitive so you'll be lucky to get 3% I'd say.

If there is a contract in place and that contract has a provision for interest then that rate must be used in place of statutory interest. Again though, if that rate is disproportionate then a judge can look to override it. Whether a judge would do that on an agreed term of a contract is a different matter.

Put it this way, if you do nothing you'll get nothing: if you do something you might get something and could get all.

Thank you very much for taking the time to respond.
Cheers!