In here for traffic - (sort of) legal advice please? Presenting a cheque for a disputed amount

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We are owed money by someone. They have sent a cheque for part of the amount, withholding the rest as they dispute it (despite independent arbitration, which they originally agreed to be bound by, finding in our favour for the full amount). I intend to take them to the small claims court for the balance but in the meantime, they have used the phrase "in full and final settlement" in the letter enclosing the cheque. If I present the cheque to my bank in the meantime, is that classed as me accepting that this is "full and final" or can I cash the cheque and still claim the outstanding amount? Does that phrase have any legal standing or is it hogwash and I can take this money and still sue for the rest? The person has previous for stopping cheques.

So I suppose, WIBU to pay this cheque into my bank or do I need to hold off until the small claims court procedure is over because of the wording they have used?

When did you receive the cheque? If it was more than a few days ago, I would not risk banking it. However, if you have received it today, or yesterday, you can bank it - but you should send a clear letter to them stating that you are banking the cheque as an interim payment or part payment of the debt and that you do not accept that it is full and final settlement. It would be worth mentioning the arbitration decision and your intention to pursue as a small claim at the same time. If you do that, then bank the cheque, the person who sent the cheque can't be in any doubt that you did not accept their offer of a lower amount, and the court should not hold the matter settled for the lower amount - the law is clear on this.

However, if there is more than a few days delay in the banking of the cheque and communicating that you don't accept it in full and final settlement, then a court would be likely to conclude that it was reasonable for the debtor to believe it Had been accepted and find the matter settled for the lower amount.

Hope that makes sense!

Photocopy the cheque. You may need the bank details to enforce any judgment you get.

And keep a copy of the letter you send and make sure you send it recorded delivery - winning in court is all about evidence.

Thanks Mmmporridge, that's really helpful. The cheque only arrived today.

Mmmporridge
And keep a copy of the letter you send and make sure you send it recorded delivery - winning in court is all about evidence

I'd send it special delivery in that case - tracked at every point rather than just point of posting.

If they are local hand deliver it.

Rubbish on my names of different types of delivery, but yes if special is the one where it has to be signed for, definitely the way to go - you want to be able to show it was received.

YY to everything Mmmporridge said. Use recorded delivery not hand delivery - you are not impartial in this process so you cannot prove it was delivered if you deliver it by hand and they choose, at a later date, to claim they did not receive it.

Ha ha so am I - I meant recorded delivery only records that it gets there rather than it was sent but I'm talking out of my backside because that is what you meant anyway.

Right back to sleep/work/whatever for me!

If the letter states the cheque is in full and final settlement, I would NOT bank it under any circumstances. Return it by recorded delivery. If you bank it with their covering letter stating it is F&F, I (believe) that you are accepting it as F&F payment.

Hi OP - I wouldn't bank cheque if letter states in full and final - you are under no obligation to accept a payment that is less than the sum you believe you are owed. Return it to the sender with a letter stating that you do not accept their offer of settlement. And as people have said above, make sure you keep a copy of the letter and cheque as the bank details may come in handy should you get a judgment as you can do a Third Party Debt Order. Also, it is fine to send back by first class post as this is good service according to the CPR (you can always ask the post office for proof of posting). If you send by recorded delivery this can cause problems, especially if you are not sending to a business address, as the recipient does not have to sign for it and, if they are not in when the postman calls, they do not have to go an collect it (especially if they suspect what it is) and it may be returned to you. I never send legal letters by recorded delivery for exactly this reason.

The problem with not accepting the cheque as part payment is that you need to make a realistic judgement on how likely you are to enforce a judgement if/when you win in court. Taking them to court and winning still doesn't guarantee you will get any money out of them so weigh everything up carefully before acting.

We were advised that sending first class post is not sufficient to prove delivery or receipt unless you have a signed legal agreement that states important mail will be sent first class post and considered delivered by next day.

It isn't full and final settlement so I agree with Cactuar. Is it worth speaking to Citizens' Advice?

p.s. I think you're getting some dodgy advice here, be careful not to do the wrong thing. They have sent it as full and final settlement - it isn't. They didn't state it was part-payment so my instinct says don't bank it. Also don't rely on internet advice as it's so varied.

Book first class post is good service. The date of service is the second working day after the date of posting (so sent by first class post today, date of service would be Monday). No court would ever expect all correspondence between parties to have been sent recorded delivery, which can cause its own problems as I have said above.

And what Vycount said. Definitely do not bank the cheque until you have got some proper advice - CAB, or also College of Law and BPP offer free legal advice. Most solicitors offer a free half hour advisory session too.

Thanks for your advice all. On balance, and having done some searches on case law based on "full and final settlement" following what Mmmporridge said, we have decided to bank the cheque and write to them immediately. I have drafted a letter stating that we accept the amount as part payment of the total amount owed to us only and reject that it is a full and final settlement, and further stating that following the recent independent adjudicator's decision, which they agreed to be bound by, that the full amount should be paid to us we intend to claim the outstanding amount, including interest and fees, in the County Court.

They live a few hundred miles away so hand delivery was never on the cards!

Fair enough Sign - good luck and hope you get your money back.

Full and final settlement means exactly that.
If you're prepared to accept this cheque as payment and let the rest go, then bank it and send them a receipt.

If you want the full payment then under no circumstances whatever should you bank it.
Return it to them, recorded delivery, with a formal letter rejecting the payment as it falls short of the amount that is owed. I'd also think carefully about whether you're prepared to accept a cheque: if you're not, tell them this in the letter.

is it worth asking whoever the arbitration was through if they can advise on what to do?

I was going to say don't cash it but then have also looked at case law. From my reading then you should inform them that you do not accept in full and final settlement and that you are banking the cheque as part payment. As others have said you should get evidence of postage/delivery and also keep a certified copy of the letter you've sent.

Good luck.

I've already done that nipers, I rang them as soon as I heard the cheque had arrived, and they advised small claims court for the balance but what to do about the cheque in the interim "wasn't their area of expertise".

I did try to contact CAB but after being on hold for over five minutes, the automated voice told me I was thirteenth in the queue so I couldn't hang on that long (on mobile; had ducked out of office "to make a quick call" - ha!) And as the case law I've subsequently perused while on lunch indicates, backing up Mmmporridge 's advice, the key appears to be speedy presentation of the cheque with immediate follow-up communication, so having made a decision I can't risk waiting for the amount of time it might take to get to speak to a CAB advisor.

There is some information line such as this ;

www.addleshawgoddard.com/view.asp?content_id=2294&parent_id=1508

Just because you send something recorded delivery rejecting the cheque as being in full and final settlement doesn't mean that they have to accept receipt of the letter. You can get proof of posting receipt from a post office but of course you can't prove what was in the letter.

Check with CAB first but my inclination would be to write a letter rejecting the sum offered as being in full and final settlement, stating you consider it an interim payment and will be banking it on that basis and setting out the amount still owed to you. Wait until you have proof of delivery before cashing the cheque. You can give them say, 14 days from receipt of your letter to pay the rest otherwise you will be taking them to the small claims court for the balance.

Depending on what's owed however, it may or may not be worth going to small claims court, but I guess that's what they're hoping and as Jacks says, and as you have already discovered, getting a judgement in your favour doesn't necessarily mean the money will be forthcoming. If they cancel the cheque then that will go against them in any county court claim.

If you have home/contents insurance policy there is often free legal advice thrown in, so definitely worth checking/speaking to CAB as already suggested.

As Vycount has pointed out, most advice will be opinion, not legal advice, so I wish you good luck.

Return the cheque with a letter rejecting their full and final settlement and insisting on the full amount.

take copies of the cheque/letter.

then start Small claims proceedings against them for the full amount.