Our client is an architect and they were owed money by one of their developer clients. Our client was owed circa £32,000 over various invoices from their developer client who had stopped engaging with them about payment.
Initially, we served a Statutory Demand on the debtor, which is a formal written demand for payment of a debt within 21 days. A Statutory Demand can only be used where the debt is undisputed and is a precursor for a winding up petition.
Having served the Statutory Demand upon the debtor, they raised a spurious defence to the debt. We were confident that the alleged defence had no merit, but given that a defence had been raised, and by this point the Government had introduced certain restrictions against winding up petitions via the introduction of the Corporate Insolvency and Governance Act 2020 to protect companies who were impacted by Covid-19, the client decided to err on the side of caution and rather than present a winding up petition in respect of the debtor, they chose to issue a claim at Court.
Following issuing the Claim, the debtor instructed Solicitors and we negotiated a settlement which saw our client recover the full amount of the outstanding invoices and a large contribution towards our client’s costs.
Rebecca Fairclough from Farleys’ Commercial Litigation Team, who acted for the client, commented:
We were pleased with this outcome for our client. It is a shame that our client had to issue the Claim at Court before the debtor would agree to pay but sometimes that is what it takes for debtors to realise that this is being taken seriously.
Our client commented:
“I am very pleased with the service and the outcome received from Rebecca”.
If you have become involved in a dispute over a commercial debt, it is important that you seek legal advice at the earliest opportunity. Our Commercial Litigation Team are on hand to discuss the matter and the best way to resolve the dispute. Call 0333 331 4463 or email us at firstname.lastname@example.org.