27 Apr — 22

This claim is ridiculous! What to do if you’ve been served with a claim that has its facts all wrong

Misunderstandings happen. Especially in business-to-business transactions, key communication can often fail to reach the credit control team. Credit control processes roll on, and if an invoice is left unpaid, you could be facing a claim that has its facts all wrong.

Here’s an example:

Imagine you’ve hired a cherry picker for a few days from Company A.

On the day you’re contractually obliged to return it, Company A says that their driver is off sick. They re-schedule the pick up for next week.

The day of return rolls around and the specialist vehicle they need to fetch the equipment is out of action.

By the time Company A gets around to retrieving its equipment, you’ve had the cherry picker a month longer than you paid for.

The details of the various mishaps haven’t reached Company A’s credit control team, and suddenly you’re hit with a demand for an additional 30 days’ hire, that you never requested or needed.

What do you do?

Don’t ignore it – try a common-sense approach first

This is one of those situations that’s likely to get worse the longer you ignore it. Tempting as it may be to dismiss it for its lack of merit and hope that the other side sorts itself out, you’re running the risk of making the problem worse.

Your first step is a simple common-sense approach. Try to communicate with the right people and explain the situation amicably. They might agree to revoke the demand and pretend it never happened.

Write a letter – set out your position clearly in writing

If your phone call falls on deaf ears, take the time to write a clear letter / email that corrects any misunderstanding between the parties. It’s best to avoid escalating tension between the parties. Avoid emotive language (don’t actually say “this claim is ridiculous!” or denigrate individuals). Instead, simply state the facts and ask them to kindly revoke their demand.

Make sure you address it to the decision maker at the company. You may need a follow-up conversation to iron out any misunderstandings. But the key is to keep it amicable and co-operative.

Responding to a claim form

If the message still hasn’t got through to the right people, or if Company A misunderstands or disagrees with your position, then they might soldier on with their request for additional payment.

Their persistence may end up with you being served with a claim form. This can look a little scary, but again, it’s crucial that you don’t ignore it.

File an Acknowledgement of Service and a Defence. If you fail to do that, the claimant may be able to obtain default judgment. That could result in a judge ordering you to pay the outstanding sum. You haven’t put forward your side of the story, so the judge can make a decision only on the basis of the other side’s allegations.

Obliterating the claim: strike out application and summary judgment

The golden bullet in defending a claim without merit is achieving strike out and summary judgment. This can put an end to proceedings almost as soon as they’ve begun, saving you huge amounts of time, money and stress in dealing with protracted litigation.

When a statement of case is struck out, it’s crossed through - discarded, as though it never existed. You’d usually make a summary judgment application at the same time, where the judge will make their finding without a trial.

However, these are not easy applications to get past a judge. Given the catastrophic consequences for the other side, there’s a high bar to satisfy before a judge will order strike out and/or grant summary judgment.

For the claim to be struck out, you’ll have to show that the other side’s statement of case discloses no reasonable grounds for bringing the claim.  And to achieve summary judgment you’ll need to show that the claimant has no real grounds for succeeding in the claim.

As you can see, these tests are open to interpretation. The particulars have to be lacking in any legal argument to show that there isn’t even one ground for bringing the claim that might be considered reasonable. Even if it’s flimsy, so long as it’s a possible, reasonable ground for the claim, then it won’t be struck out. And showing that there are no real grounds for succeeding in the claim is tricky too. How can a judge be sure that there is no prospect of success without all the evidence in front of them?

Further, judges tend to be reluctant to strike out claims or award summary judgment, particularly where the other side is a litigant in person. That’s because by striking out the claim or awarding judgment without trial, they’re barring a potential route to justice for the other side, even if (in your eyes) the claim is based on shaky ground. Strike out applications can succeed where the statement of claim is unreasonably vague, vexatious, incoherent or obviously ill-founded.

Even if the golden bullet fails, you might still deter your opponent

While these are difficult tests to meet, if the claim against you is totally without merit, then these applications act as a tool to deal with the claim expeditiously and at the least possible expense for you. If your applications fail, then you’ve lost the cost of the application, but you can continue to defend the claim in the litigation process.

The judge may decide that the claim is uncertain, but it doesn’t quite look like there are absolutely no grounds for success. In those circumstances, the claimant may be asked to amend their pleading to add clarity, or they might be asked to pay a sum into court. These actions may be sufficient to deter the claimant and make them think twice about pursuing their claim.

If you’d like any help with a claim you’ve received, please let us know. We’ll help you defend claims which tell a story that only vaguely relates to the facts as you see them. We’re on hand to advise you and guide you through the process.  

Elsewhere at The Hub
21 Apr — 22

There wasn’t a formal contract, but I can still get paid for the work I did… Can’t I?

13 Apr — 22

It’s not about writing the nastiest letter - The elements you actually need to prove in litigation