Agency Problem - Aristotle !

**Vetran** · 26 August 2004, 17:33

www.payontime.co.uk

**ressot** · 29 August 2004, 08:53

Re: Agency Problem - Spring IT

Me too,

gross breaches of contract. I need a lawyer for recovery of a reasonable sum. Any recommendations?

**antell** · 29 August 2004, 15:01

Re: recovering money owed

I won’t make recommendations for particular individuals or firms because as a practising barrister myself I am hardly unbiased! But as regards the type of lawyer you go to and to what extent you do some work yourself, this will depend on a number of factors including:

How much money you are claiming

Whether you are likely to recover your legal costs from the other party

Whether there is a risk that you will have to pay the other party’s costs

I don’t know the specifics of your situation (and I would not give individual advice in a public forum anyway) but in general the issues facing someone pursuing a debt for services supplied are as follows.

A claim for less than £5,000 will be allocated to the County Court “small claims track”. The main consequence of this is that if the claimant wins and recovers the debt he will only recover “fixed costs” (i.e. the court fee he had to pay to issue the claim and certain limited expenses of witnesses to attend the trial – if the matter proceeds that far) so any lawyer’s fees the clamant pays effectively bite into the money he eventually recovers. The “up” side of the small claims track is that if the claimant loses for some reason then he only has to pay “fixed costs” to the other side.

If the claim is for more than £5,000 then it will be allocated to the fast track or multi-track. This will generally mean that the claimant can recover most of his lawyer’s fees if he wins but also means that if he loses he will have to pay most of the other side’s costs as well as his own. However, if the other side admits the claim immediately after the County Court claim form has been issued then the claimant only recovers “fixed costs”.

If the debt is more than £5,000 the claimant can bring it within the small claims track by limiting the amount claimed to £5,000. This might sound like an odd thing to do but if the debt is only just over £5,000 and there are real doubts about whether the claim will succeed then some claimants might decide to do this to avoid the risk of having to pay significant costs to the other side. On the other hand if the debt is very much more than £5,000 and/or the claimant is advised that the likelihood of a win is high, the claimant may prefer to run the relatively small risk of having to pay the other side’s costs in order to be able to recover his own legal costs if, as expected, he wins.

Prior to the civil justice reforms in 1999 it was common for a claimant to write a simple letter before action and then issue a claim in the County Court in order to put pressure on the other side prior to entering into serious correspondence with the other side about the claim. The new civil procedure rules discourage this approach by permitting the court to penalise in costs a claimant who does not attempt to settle the matter (e.g. by setting out his claim clearly in letters and answering queries from and providing documents to the other side) before issuing the County Court claim.

Whilst the new procedure does, in general, make a lot of sense, it creates a problem where the defendant raises - prior to issue of the claim form - all kinds of issues as to why the debt is not due but when the claim form is issues does not the formally dispute the debt. In that case the claimant can recover only fixed costs (even if the claim is for more than £5,000) notwithstanding that he may have incurred significant legal fees in dealing with the issues raised by the defendant prior to the claim form being issued.

Against this background, keeping legal costs down – particularly costs prior to the issue of the claim form – is of some importance. The options are essentially these:

1.&nbsp &nbsp &nbsp &nbsp Do the work yourself without any legal advice

2.&nbsp &nbsp &nbsp &nbsp Do the work yourself but with advice from a barrister

3.&nbsp &nbsp &nbsp &nbsp Engage a solicitor to do the work

Theoretically there is a fourth option - do the work yourself but with advice from a solicitor – but because of differences in the way solicitors and barristers work this fourth option will not usually be available. Barristers concentrate on trial advocacy, legal advice and drafting documents but do not conduct correspondence on behalf of a client (i.e. a barrister can draft a letter for the client to send under the client’s name but the barrister cannot himself send the letter on behalf of the client) whereas the “bread and butter” of a solicitor’s practice is corresponding on behalf of the client, and solicitors are not generally interested (though there may be some exceptions) in advising a client who is conducting his own correspondence.

1.&nbsp &nbsp &nbsp &nbsp Doing the work yourself without any legal advice can be a reasonable option where the debt claimed is small, for example, less than £1000. Without the benefit of legal advice, there is a risk that your claim will fail where, had you received legal advice, it might have succeeded. But that risk may be worth taking given that if you pay for legal advice that cost will not be recoverable even if you win and may take a significant slice out of the amount you receive.

2.&nbsp &nbsp &nbsp &nbsp Doing the work yourself with advice from a barrister helps to keep initial (pre issue of claim form) costs down. A barrister can be instructed to advise and draft a letter at the point where his legal expertise is required and other more routine letters can be drafted by the client himself. For example when pursuing an unpaid invoice for services supplied, the correspondence starts out as a simple claim for debt but at some stage the debtor may claim that the supplier has provided inadequate services in breach of contract so that the debt should be set off against damages for breach. At this stage a barrister can be instructed to advise and draft a letter but prior to that stage – and even after that stage in the case of more routine correspondence such as chasing up replies - the client can draft the letters himself. A barrister carries out only the specific piece of work he is instructed to carry out, for a fee agreed in advance. This helps to keep costs down and gives the client control of costs.

3.&nbsp &nbsp &nbsp &nbsp Engaging a solicitor to do the work will suit those who would prefer to put the whole matter in the hands of someone else and don’t mind paying for work which they could do themselves. The solicitor will conduct the whole of the correspondence and will charge for all work done including, for example, letters simply chasing a reply form the other side. In this situation the client does not control costs (i.e. the solicitor will not ask the client before sending every letter or talking to the other side on the telephone) but if the debt to be recovered is very large the client may consider that the solicitor’s costs will be only a small percentage of the amount to be recovered and that the increased cost does not matter that much in the overall scheme of things. A solicitor can, of course, in turn, instruct a specialist barrister to advise as and when needed.

As to where you can find a barrister who is IT savvy… well… modesty forbids…

John Antell

www.john.antell.name

**Cojak** · 30 August 2004, 08:09

Re: recovering money owed

I'l make a recommendation then - I use Lawspeed for anything like this. They're on the ball and will tell you exactly how much they'll charge up front.

It also looks good on your business expenses if the IR come looking - you look like a proper business.

HTH.

(but John sounds a very nice man, so I'll tuck his address away...)

**casacct** · 3 September 2004, 21:21

Re: recovering money owed

Many thanks John (and Cojak) - I really appreciate your replies.

**Liddle Feesh** · 13 September 2004, 00:22

Re: recovering money owed

Where are you working? Vivista?

Agency Problem - Aristotle !