Commercial Litigation Frequently Asked Questions.

 

EAD’s commercial litigation team look at the most common frequently asked questions, find our answers below.

I would like EAD Solicitors to assist me with a dispute – what can I expect to happen? 

Commercial disputes can be of many types and arise from different situations.  The first step in appointing EAD Solicitors would be to meet with you to determine exactly what the nature of the dispute is.  Having considered the nature of the dispute and any documentation which may be available, the initial steps and advice would be to determine:

  • What courses of action or remedies are open to you?
  • Is this a matter for negotiation, alternative dispute resolution or litigation?
  • What steps in our view should be taken to ensure the best possible resolution of the dispute

 

All steps in any dispute are taken only after full consultation and advising you of all available options in order that you are fully informed and able to provide instructions.  At EAD we do not as part of our general ethos advise you to incur costs in litigation where we do not believe there is a reasonable prospect of success.

I have received a Court form – what should I do next?

In any case where litigation is commenced time is always of the essence especially if you are a defendant.  Therefore, we would suggest that as soon as you receive any court claim form you contact ourselves in order to protect your position within the time limits allowed, for example, on the commencement of a county court action you have 14 days in which to file an acknowledgment of service.  This 14 day period starts from the date that you are “deemed” to have received the court papers (which may not be the actual date you receive them) is essential that you consult EAD Solicitors as soon as possible after receiving the papers in order that the deemed date ascertained, your initial instructions provided and an acknowledgment of service submitted setting out your intentions with regard to the claim.  If it is your intention to defend the matter then a full defence (unless an extension of time is agreed) would need to be filed within 28 days of the deemed date of service of the original claim form.

My business is owed money – what can I do?

EAD Solicitors operate a dedicated debt collection service which has successfully recovered considerable amounts of money on behalf of their commercial clients.  If you are owed money by a customer, please contact us and we can advise you in respect of all available options.

I have received something called a “statutory demand” – what is it and what can I do?

A statutory demand is used by creditors when they are owed more than £750.  A statutory demand gives you 21 days from the date that you received it to respond to it; either to pay what you are stated to owe or to defend it. The options that are open to you are relatively straightforward.  If you do owe the money that is being claimed, it is simpler and cheaper to come to an agreement with them to pay by instalments if possible if you cannot pay in full in order to avoid the creditor issuing a petition for bankruptcy.

If however you do not agree with the contents of the statutory demand, either the amount that it is owed or that you have a defence to the claim, then you can make an application to the court to have the statutory demand set aside.  However, you will need to do this within 18 days of the receipt of the statutory demand.  The potential points that can be raised are:

  • The figure falls below the statutory demand limit of £750.
  • That the debt is in dispute, for example, if the sum relates to an invoice for work done, if you argue that the work was defective or unsatisfactory.
  • That you have in fact a claim against the creditor that is equivalent to or greater than the amount contained within the statutory demand or that the amount in the statutory demand is already secured by the creditor on property owned by yourself and that the property retains a value greater than the debt.

In any event, because of the time limits, you must take action quickly.

One of my contractors/suppliers has let me down – what can I do?

Commercial contracts of course can take many forms but if a contract is breached the contract itself may contain remedies for that breach which you can enforce against your supplier.  It is imperative that you take advice on:

  • The nature of the contract
  • The terms that apply.
  • The remedies that are available to you
  • I have a judgment order for payment but my opponent has failed to pay – what are my options?
  • If your judgment is for more than £600 it can be transferred to the High Court for enforcement via High Court Enforcement Officers (formerly sheriffs).  Under that figure it can be enforced by the county court bailiffs.

In addition, there are other enforcement options which we can discuss with you including:-

  • Making the debtor insolvent or bankrupt
  • Placing a charge securing the debt against any property owned or jointly owned by the debtor
  • Having the debt paid in instalments by way of attachment of earnings

Please contact ourselves to discuss the full range of recovery options that are available.

 I am being sued by a person or company who has no money, or is based in another country – what protection have I got?

In the above situation where a claimant in a court action appears to the court to potentially be in a position where it may not be able to meet any costs awarded against it, the court may ask that claimant to pay into court a sum as security for costs, the sum to be determined by the court on an application made by you.  EAD Solicitors can advise you on the circumstances and assist or represent you in such an application.

My business tenant has failed to pay the rent – what can I do?

The law is currently about to change in connection with commercial and rent arrears with legislation expected to come into force in 2013 which will alter the remedies and methods available to commercial landlords for recovery of rent.  At EAD we can advise on the currently available methods for which a landlord can seek to recover unpaid rent.

Distraint – the remedy of distraint for rent allows a landlord to seize a tenant’s goods in the premises to sell or keep in payment of unpaid rent.  It does not require previous written notice (in fact generally a warning letter to the tenant from solicitors may prompt payment of arrears).

It can be an effective and time-saving remedy exercised by a bailiff certified to carry out such distraint and must be undertaken by peaceful re-entry.  The usual procedure is that a bailiff would attend the premises, give 7 days notice for payment before such seizure of goods would then take place.

Distraint of itself does not terminate the lease and it is expected to disappear as a remedy at some point in 2013 into forfeiture.  The other remedy open is forfeiture of the lease.  This has to be expressly allowed in the lease itself.

Forfeiture provisions generally cover not only non-payment of rent but also breach of any of the other duties imposed under the lease.  Forfeiture can also be utilized if again cover within the lease and the insolvency of the tenant.  Forfeiture itself is exercised by written notice and fails to bring the lease to an end before the expiry of the contractual term.

Forfeiture requires a court order and the court may give the tenant time to remedy any breaches of the lease (including the payment of rent).  Generally, forfeiture is only used in respect of outstanding rent where the client wishes the relationship with the tenant to cease.

How can I evict my business tenant?

On the assumption that your tenant has given you cause for the eviction and before the contractual end of the tenancy, on the assumption the lease contains forfeiture provisions covering such breaches then you will be able to attempt to forfeit the lease as set out below.

Forfeiture provisions generally cover not only non-payment of rent but also breach of any of the other duties imposed under the lease.  Forfeiture can also be utilized if again cover within the lease and the insolvency of the tenant.  Forfeiture itself is exercised by written notice and fails to bring the lease to an end before the expiry of the contractual term.

Forfeiture requires a court order and the court may give the tenant time to remedy any breaches of the lease (including the payment of rent).  Generally, forfeiture is only used in respect of outstanding rent where the client wishes the relationship with the tenant to cease.

 

 

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