Problem: Do I need to get a solicitor to deal with building dispute?
My eldest son recently set up his own business as a general builder. Sadly, he already has a customer who owes him in the region of £10,000 for the final invoice on a restoration that has been fraught with difficulties and a customer who has changed the specification as the project went along.
The customer is now restricting access to the site so my son cannot carry out any of the remaining small jobs and she is proving difficult to contact too.
I wonder if you may be able to provide some advice, like should he refer the matter to a local solicitor and go through the small claims court? Any idea on costs?
Response: Small Claims Track, Fast Track or Multi Track?
In litigation, there are three tracks that a claim may be allocated to:
- If the claim is below £10,000, then the matter will automatically be allocated to the Small Claims Track, unless a defendant has a counter-claim that exceeds £10,000.
- Where a claim is between £10,000 and £25,000, it will be allocated to the Fast Track.
- Whilst anything in excess of £25,000 will be allocated to the Multi Track.
There are big differences between a claim allocated to the Small Claims Track and the Fast and Multi Tracks, the main differences being in the time, formalities and cost.
In Small Claims Track, the parties are severely restricted on their costs that they are able to claim, so there is little cost risk to either party (where legal costs are incurred, the cap is £260). If the matter is allocated to the Fast Track, then costs are allowed (within parameters), although even a successful party will usually only be awarded 60% – 70% of the costs incurred.
That said, before any action is taken, your son must draft and issue a Letter of Claim in accordance with the Pre-Action Protocol for Construction and Engineering Disputes. Item 4 of the protocol sets out what must be included in the Letter of Claim, and you should give the defendant 28 days to respond. Failure to comply with the protocol will have costly consequences for the successful party, although with small claims these consequences are minor when compared with the Multi and Fast Tracks.
If the claim is above £10,000 but your son does not wish to take the risk, then it may be wise to ensure the claim is capped at below £10,000. If your son instructs a solicitor, he must be aware that he will not get back the costs (save for £260 and the issue fee). However, having a claim allocated to the Fast Track will concentrate the mind of the defendant.
Even if your son decides that the Small Claims Track is the most appealing, I would still recommend that he employs the services of a construction solicitor to draft the Letter of Claim and if needed, the Claim Form and Particulars of Claim. Most solicitors will give fixed fees for each stage, and it is possible for your son to manage his own case with ad-hoc assistance from a solicitor.
© Michael Gerard 2016
The advice provided is intended to be of a general guide only and should not be viewed as providing a definitive legal analysis.