Problem: My Company has an issue regarding the employment of a specialist contractor.
This specialist contractor carried out some engineering works on our behalf for a major client in central Leicester, but failed to finish and commission the job. When they left site, all our communications were met with a wall of silence. We even told them in a letter that we would have to call in another contractor to complete their work.
We eventually engaged another contractor to complete the work and make good the defects subsequently discovered with the installation. Fortunately the client is happy with the overall project, although we are out of pocket by £9,500 as a direct result of the breaches by the initial specialist contractor.
How do we go about claiming the loss? We have never used the court system before, despite being in business for over 23 years. What are the pitfalls? I am not looking forward to sorting this mess out via the court system, but I cannot afford to let the sum go.
Mark, Leicester
Response: Hello Mark. Providing you ensure that you keep your claim to below £10,000, the process should be straight forward and reasonably risk free.
Firstly, you will need to gather the evidence that demonstrates liability and supports the quantum you will be claiming, and then you should draft and forward to the other party a Letter of Claim. This is the first step to be taken under the Civil Procedure Rules’ Pre-Action Protocol and it gives the other side a set period of time in which to make a response. The purpose of the Protocol is to allow the parties to set out what their respective positions are, identify and narrow the issues with an objective to try and settle the dispute without resorting to formal proceedings. If the other side fails to respond within the time frame, or the dispute fails to settle during the Protocol, then you can issue proceedings via Money Claim Online.
Ensuring that your claim is below £10,000 will allow it to be allocated to the Small Claims Track (notwithstanding the other side filing a counter-claim in excess of £10,000). If allocated to the SCT, there are strict rules for the successful party recovering its costs, so if you are looking at DIY proceedings and will not be using any experts, then this is the way to proceed.
I would however suggest that you employ a suitably qualified lawyer to draft out the Particulars of Claim, which you should get done for a nominal fixed fee. You should also be aware of the jurisdiction of the Small Claims Court concerning unreasonable behaviour on the part of a party, where an adverse cost order can be made, but this is a rarity.
I would also add that the County Courts have mediation facilities which are free for small claims and should be taken up. You are of course at liberty to suggest mediation to the other party even before issue proceedings, although non-court mediation will attract a fee, not least for the mediator and facilities.
Lastly, I should also mention another option that is to refer your dispute to statutory adjudication, although this will cost if you engage the services of a representative, plus there is the risk of incurring the adjudicator’s fee, which could be significant.
My recommendation therefore is to initially implement the Pre-Action Protocol, followed by Court proceedings, but also utilising the courts mediation service.
Good luck.
© Michael P. Gerard MSc, PGDipLaw, PGDipBar, FCIOB, MCIArb, MAE
The advice provided is intended to be of a general guide only and should not be viewed as providing a definitive legal analysis.
Author background
Michael is a Barrister, Chartered Builder, Registered Adjudicator & Accredited Expert in quantum and planning matters. He is Managing Director of Michael Gerard & Co www.michael-gerard.co.uk, a company of chartered building consultants and quantity surveyors who provide a specialised service in the areas of construction law, quantum, programming, business recovery and insolvency support to the construction industry. Michael is also a consultant with Silver Shemmings LLP, a London practice of solicitors specialising in construction.