Tuesday, 12 May 2015

Strange court summons

Sounds like I may learn a few more lessons, as, for a change someone is trying to sue us!

What is weird is that we have been trying to actually sue this customer for not paying for ages, and the big issue we have is working out who they are! They have a "name", but it is not something ending in Ltd, and we don't know a company number. Indeed, rather lax on our part, we do not know what legal entity they are. All their letters fail to say what they are either. We have a procedure for checking new customers, but it sounds like this one may have fallen through the cracks.

Now, they only owe about £300, but we were getting nowhere with this and it was looking a lot like we would have to write it off. Then, out of the blue, we get a summons, from a Scottish court, for nearly £3000. They are claiming service was not working and that there are some consequential losses. In practice, the service was working fine, but even if it was not we make it crystal clear that we only offer a money back guarantee and limit our liability. They have not spent that much in total with us by a long way. This is not just stated in the contract but one of the items ticked on the order form and confirmed on the order confirmation and initial invoice, and in the info pack we send.

But apart from simply defending a daft court case, and sending a counter claim, we have a load of other fun things on this one...

1. The company making the claim, with the same basic name but now as a limited company, was only formed last month. This is later than all of the events for which they are claiming. I would hope that this fact alone can get the case thrown out! It almost seems like they created a company just so that they can sue us!

2. They have never sent any notice before action, or said what amount they were after (even on their dodgy letterhead), and the last letters we have had (refusing to pay our bills) predate this company being created even.

3. Our contract says that English courts apply. I wonder if that is valid and if that allows us to get the case thrown out.

In practice, next step is checking with our solicitors (which will have a small cost for us), and trying to get this case chucked out.

Oddly, it seems Scottish courts are way more efficient as they already have a hearing date listed for next month, only in Scotland!

I'll keep you posted.

P.S. pursuer confirmed company number, so we have written to court asking for it to be struck out, but have meeting with solicitors anyway so will be checking if that was the right thing.

14 comments:

  1. Sounds like posting a copy of the above to the other party, now you have a strong reference to them, along with an expected summary of your incurred costs that you'll be seeking should you prevail, might persuade them to drop this action. No guarantee, obviously, given they are clearly at least partly a bit dim/optimistic.

    ReplyDelete
    Replies
    1. If they had simply created this company in order to sue is, it will have no means to pay our costs, and so that will not concern them!

      Delete
    2. I wonder if you can somehow pin the costs on the original (non-limited-company) subscriber...

      Delete
  2. That sounds like a fun one to unpick! I can give you a name of a friend at a Scottish law firm, if you find you need one, although I have no idea what price they might be.

    ReplyDelete
  3. Points 1 and 3 seem like a slam dunk to me. You never had a contract with that entity, and that entity hasn't suffered a loss, as that entity didn't exist. I'll find a citation later (got a scots commercial law exam later this week), but I'm fairly sure somewhere in there it was said you can't be an agent for a company that doesn't yet exist.

    Just something that did occur to me though, on the form you mentioned they ticked off, did they sign it in their personal name or "for and on behalf of (business name)"? If its the former, the person who signed it is liable to you for the debt. I may be able to get you a citation for that too.

    ReplyDelete
    Replies
    1. > you can't be an agent for a company that doesn't yet exist

      Perhaps Halifax Life (http://www.scotcourts.gov.uk/opinions/2009CSOH74.html)?

      Delete
  4. Wonder if it might be a partnership. They're a bit weird up here, they're legal persons like a company, but the partners are liable along with the partnership..

    ReplyDelete
    Replies
    1. Interesting – that's a pretty substantial difference to English law, where traditional (non-LLP) partnerships do not have their own legal persona.

      Delete
    2. This bunch claim to be an LLC, but the company by that name as "Ltd" are in companies house. We have ask the court if they can confirm the pursuers company number, and also tried to contact the solicitors that act for them to confirm.

      Delete
    3. If the court confirm the company we think, we'll explain that the summons must be in error as the claim relates to events pre-dating the pursuers existence, so can they send the correct claim or pursuers please...

      Delete
    4. You may need to file a formal application to strike out, but your solicitors should be able to advise you on this.

      Delete
  5. You should be able to file for strike out as you're outside the jurisdiction of the Scottish courts. They would need to re-file in a English court.
    As well as strike out on the grounds of no contractual relationship, failure to adhere to the practice directions concerning pre-action conduct, etc :)

    ReplyDelete
    Replies
    1. And non existence of claimant, or at least non existence at time of matters relating to the claim.

      Delete
    2. Yup. And move for costs to be granted also due to the claimant's unreasonable behaviour.

      Delete