Question 1 - John Atree director of Great Furniture Direct Ltd (GFD) (a) Mr Atree advises you that GFD has been experiencing a sharp increase in the number of invoices that are not paid on time or at all. He would like your advice about how GFD can recover some of these debts using the staff in their Accounts Department. In particular he would like to know: (i) How does the size of the debt influence the court procedure after issue?
(ii) What must be done before proceedings are issued?
(iii) The content, paperwork and ancillary matters that would be needed to issue proceedings.
(iv) If you are instructed how will costs be kept to a minimum.
(i)The size of the debt affects the track the case will be entered to, with the options being the small, fast or multi track. Since the debt in question is £4,500 then the claim will be entered into the small claims track. (ii)Before the proceedings are issued it is seen as good practice to message the defendant in question before taking any legal action. This will allow for the defendant to be aware of the current situation and potentially allow for a settlement before any legal action commences. The letter should allow for 14 days for a reply before any legal action is taken. (iii)To begin legal proceedings a claim form will be needed and will be prepared by the claimant. This will compose of a detail account of the reasons for the claim and a statement of truth signed by either the claimant or the claimants legal representation. Three copies will be needed to be sent to the court. There will be a fee that will also need to be paid when the claim form is submitted. Once the claim form and fee have been sent to court, the court will issue the claim (iv)‘Fixed fee’ payment arrangements for solicitors fees are a popular way to pay solicitors fees because they help provide peace of mind. Fixed fee agreements reduce the risk of relationship fallout between you and the solicitor over fee discrepancies, and most important, allows you as the client to be in control. It is down to the solicitor to warn you if they feel there are unforseen elements outside your agreement with them. There should be no surprises and from the onset you know what you owe.
(b) Some months later GFD prepare and issue proceedings against the University of Weston (the Defendants) for breach of contract. The Defendants issue a Defence and Counterclaim and GFD have now asked your firm to act. When reviewing the paperwork you note – • The total value of the claim issued by GFD is stated as £4,500 • The Defence states that GFD breached the contract as the desks were defective. On this basis the Defendant made a Counterclaim of £6,000. The Counterclaim included a claim for loss of profits from several courses which were cancelled due to the alleged breach. (i) Please explain the significance of your findings to GFD. You should also advise what, if any, affect the Defence and Counterclaim could have on how the claim is treated by the court. (ii) Please indicate in detail what effect the contract (Document 1) has on your reply to the Defence and Counterclaim.
(iii) Identify what steps you would expect the Defendant to take if they decided to accept your interpretation of the contract and how would this impact on the proceedings.
(iv) If the Defendant fails to take any action despite accepting your interpretation of the contract, briefly identify what procedure should be followed and the basis for this action.
(i)Since there has now being a counterclaim made by the defendant, the overall cost of the claim is now over £5,000and the claim will now be allocated to the fast track, which is for claims between £1,000 and £25,000. As a result the length of the claim may also be increased as the claims in the fast track can last up to 52 weeks if they are complex, which may be the case with the counter claim being made.