Author: alistair.wells

It can be frustrating when your business is owed money and it hasn’t been paid.  You may be unsure how to go about recovering the amount owed so we’ve outlined the process for you.

1. Chase the invoice
It may be that you can resolve this informally with the debtor and avoid formal legal action.  A simple email chasing the payment may be all that’s needed, or if you’re debtor is struggling to pay, you may be able to negotiate a payment plan with them instead.

2. Letter Before Action (LBA)
If you’ve already tried to chase the debtor with no luck, the next step is to send a Letter Before Action before issuing legal proceedings. This is essentially a final demand letter warning them that you will commence legal proceedings if they do not pay. 

It should include:-

• Details of the debt owing;
• The date payment should have been made;
• Any interest that’s accrued; and
• How long the debtor has to arrange payment before you plan to commence legal proceedings.

In some cases, the threat of legal action may be enough to prompt the debtor to make payment. If you would prefer, you can ask us to send this for you.  A letter from a solicitor will not only show that you have taken legal advice, but will also make it clear that you’re serious about pursuing the debt.

3. Commence legal proceedings
If you’ve sent an LBA with no response, unfortunately, the next step is to commence legal proceedings. 

There are two options here:-

• Issue a claim
  You can issue a claim against the debtor.  You (or your legal representative) will need to issue a claim form and particulars of claim setting out the details of the debt.  This will need to be filed at the court along with an issue fee. Once issued, it will be served on the debtor who will have 14 days to acknowledge the claim and 28 days to respond in full.  The debtor may either admit or defend the claim, they may also make a counter-claim. If there is no response to the claim, you’ll be able to apply for a judgment in default. However, if the claim is defended then the court will give directions for the case to proceed to trial which can be a lengthy process.

• Insolvency proceedings
  This is an option if the debt is undisputed. If the debtor is a commercial client, you may be able to petition the court for a winding-up order if the debt owed is in excess of £750.  The threat of insolvency will usually prompt the debtor to pay up, otherwise, the company will go into liquidation.
  If the debtor is an individual owing over £5,000 you can petition the Court for a bankruptcy order.

4. Enforcement action
If a County Court Judgment (CCJ) has been entered and the debtor still doesn’t pay, there are various forms of enforcement action available, including:-

• Appointing High Court Enforcement Officers or Bailiffs to collect the debt
• A charging order securing the debt against any property the debtor owns
• A winding up order
• A third party debt order
• Attachment to earnings
• Bankruptcy proceedings

Things to consider:
When deciding whether or not to issue a claim for debt recovery, it is worth considering the following points to assess whether issuing proceedings are going to be worthwhile:

• Can your debtor afford to pay?
  If your debtor can’t afford to pay, you may risk spending more money on the process than you would be able to recover if you pursued the debt.

• Is the debt worth pursuing?
  If the debt is for a relatively small amount it may be more beneficial to simply write it off than to go through the expense of recovering it.

• Time and cost of pursuing the payment
  Litigation can be both costly and time consuming which may outweigh the benefit of recovering the sum from the debtor. If the debt is less than £10,000, you won’t be able to recover any legal fees, only the court fee. If the debt exceeds £10,000 costs can be claimed, although it is very unusual to be able to recover 100% of your costs.

• Impact of the client relationship
  If the debtor is a client you want to continue to work with, you will need to consider the impact of any litigation on your relationship with that client.

• How long has the debt been outstanding?
  If there has been no acknowledgement or payment from the debtor within six years, the debt will be unenforceable under the Limitation Act.

Need help with an unpaid debt?
No matter where you are in the process, we’d be happy to advise you on any outstanding debt issues. Click here to get in touch.

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Yes, held the Employment Tribunal in the recent case of Kubilius v Kent Foods. In the first ruling of its kind, the Tribunal held that it was fair for a lorry driver to be dismissed for refusing to wear a face mask while working on client premises, despite still being in his cab.

Facts of the case

The Claimant, Mr Kubilius, was a lorry driver working for the Defendant, Kent Foods Ltd. Mr Kubilius had been employed by the claimant for just under four years and delivered products to customer sites.  Tate and Lyle were a key customer for Kent Foods and 90% of their work involved driving to and from the Tate and Lyle’s Thames Refinery site.

As a result of the first national lockdown,  Kent Foods updated its employee handbook to include that “customer instruction regarding PPE requirements must be followed”.

Tate and Lyle insisted that face masks had to be worn by all staff and visitors to their Thames site and masks were provided on entering the premises. At the time, government guidance stated that “wearing a face covering is optional and not required by law including in the workplace”.

Mr Kubilius visited the site in May 2019 and ignored Tate and Lyle’s request for him to put a mask on while remaining in his cab.  Mr Kubilius insisted that the cab was “his home” and refused to comply with the request despite being asked twice to wear a mask. The managers of the site had concerns that he could pass on the virus while speaking to staff through his window and subsequently banned the Claimant from its site.

Mr Kubilius was summarily dismissed for gross misconduct following an investigation and disciplinary process.  Mr Kubilius brought a claim for unfair dismissal.

Tribunal decision

Mr Kubilius’ claim for unfair dismissal was rejected by the tribunal by reason of conduct and third-party pressure which amounted to ‘some other substantial reason’.

The Claimant refused to follow instructions to wear PPE on the client site.  The facts were not disputed and Kent Foods believed that Mr Kubilius was guilty of misconduct, his dismissal was held to be in the range of reasonable responses.

The facts that influenced the tribunal’s decision were:

• The importance of Kent Foods maintaining a good relationship with Tate and Lyle.
• Mr Kubilius insisted that he had done nothing wrong after the incident and continued to do so throughout the disciplinary process, this raised concerns with his employer over his future conduct.
• Mr Kubilius was banned from the client’s site therefore making him unable to continue with his contractual role.  Mr Kubilius had suggested he could have been redeployed to a less skilled role at a lower salary, however, Kent Foods Ltd had no alternative vacancies at the time.

Although an employment tribunal judgment is not binding on future cases, this case gives us an indication of the factors that the tribunal will consider in determining similar cases. It’s clear that this was a case decided on it’s specific facts and, if another employer is faced with a similar situation, their case may be decided differently.  This case may be the first of many, particularly as lockdown eases and refusal to wear a face mask could be viewed differently by employers.

Read the full judgment here.

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Although shareholders’ agreements are not required by law, it’s often a good idea to put one in place when starting your business.  When setting up a company you like to hope things won’t go wrong in the future but if they do it can be difficult to find a solution if the relationship has already broken down.  Putting a shareholders’ agreement in place early on is a great way to prevent problems from arising later on down the line.

What is a shareholders’ agreement?

A shareholders’ agreement is a contract between the shareholders of a company to document the relationship between them.  It provides clear guidance on their rights, obligations and what should happen in particular circumstances. This can include:

• How shares can be transferred
• How dividends are payable
• Protection for minority shareholders
• Alternative Dispute Resolution in the event of a dispute

What are the benefits?

• Control over who owns shares in the company

A shareholders’ agreement can require existing shareholders to have first refusal to purchase shares providing security over who can and cannot acquire shares in the company.

• It can require an employee who leaves the company to sell their shares back

Without a shareholders’ agreement, if a shareholder were to leave the company they can continue to hold shares and benefit from the business, despite the fact that they are no longer employed.  A shareholders’ agreement can require shares to be sold back to the business upon termination of their employment.

• Confidentiality

Shareholders’ agreements do not need to be filed at Companies House meaning that the contents can be kept confidential between the parties.

• Resolving disputes

If shareholders reach a stalemate or fall out, an agreement can provide for Alternative Dispute Resolution through Mediation or Arbitration.  Including provisions for Alternative Dispute Resolution means that parties are all on the same page if the relationship sours and may mean that costly litigation is avoided.

• Greater protection

Shareholders’ agreements provide a greater level of protection than articles of association. This can be particular beneficial in providing assurance to any potential investors.

• Restrictive covenants

Restrictive covenants can be included preventing shareholders from setting up a competitor or poaching clients and employees after exiting the company.

• Greater control

A shareholder’s agreement can require a specific level of approval for specific actions or decisions by some or all shareholders, providing a greater level of control over the company.

These are just some of the benefits that a shareholder’s agreement may provide to your business and it is often sensible to put one in place.

If you would like to discuss putting a shareholder’s agreement in place for your company, please get in touch with us.

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Settlement agreements are a common method used to terminate an employment relationship.  They enable employers to pay an employee a termination payment in exchange for waiving their rights to bring a claim against them.

If you’ve been offered a settlement agreement, you may be wondering what the advantages and disadvantages to signing may be.

Advantages of a settlement agreement

• They can avoid the stress, cost and time of bringing tribunal claim by resolving disputes at an early stage
• They can provide a clean break from the employment relationship
• Terms are agreed by both parties
• The employee is provided with compensation for the termination of their employment

Disadvantages of a settlement agreement

• If an agreement cannot be reached it may jeopardise the employment relationship moving forward
• It may allow your employer to avoid dealing with any issues or grievances
• You are waiving your rights to bring a claim a claim against your employer

Things to consider

• Do you have any potential claims against your employer?  This may include things like discrimination, whistleblowing or unfair dismissal.
• Would the value of bringing a claim outweigh what is being offered under the settlement agreement?
• How long will it take you to find new employment?

If you’ve been offered a settlement agreement, our Check My Settlement service provides a quick and easy way to get expert advice on your agreement.

Welcome. Thanks for stopping by. How are you finding the site?

We’re beyond excited to be going live with our new business and our new website; it’s something we’ve been working towards for months.

We had the idea back in the first lockdown of 2020. We had a vision of a law firm that works remotely by design, that offers outstanding legal services efficiently and communicates in a more human way. We wanted to find a way of delivering services that works for our clients, our family and (when we have one) our team. The more we thought about it, the more sense it made, so (after a lot of soul-searching, late-night discussions and even bit of prayer), we went for it. It’s been an intense few months, but we are now officially a firm of solicitors authorised and regulated by the Solicitors Regulation Authority, and ready for action.

It may seem like a risky time to give up a secure job and plunge into something new. The thought has crossed my mind more than once. But on the other hand, it might just be the perfect time – the world has changed, and with it the way we work and collaborate with each other. Every business is having to work out how it can adapt to the new normal, and innovation is far easier for a small new business than for an established one.

We don’t claim to have all the answers; this is very much the beginning of our journey, not the end. As we go along, we’ll continue to explore new and better ways of doing everything. We’ll let you know how we’re getting on on this blog, along with news of things we’re working on and legal updates we think you might need to know about.

The uber-talented Rich Wells (yes, he’s a cousin) was responsible for our branding and web design. We gave him a brief of creating an identity for a law firm that doesn’t look too much like a law firm. We think he’s nailed it and we’ve wasted much time gazing into the hypnotic animations he created.

The photos are by the wonderful Charlotte Webb. She took the time to really understand what we wanted and work with us to achieve that and was a pleasure to work with. She certainly succeeded in making us look better than in real life!