Solicitor letter demanding money, advice needed so I can organise a response.

[MrsC22]

Thank you in advance to any replies.

My DH was dismissed from his job for a number of allegations made by his employer, he is challenging this decision via an employment tribunal. One of the matters was escalated to the police and is ongoing (DH was out of the country and has not committed any offence, the allegation includes a historic period which is proving lengthy to investigate).

In his position he was responsible for booking in orders and carrying out works, the company advised the management that they were closing the business and ceasing to trade and no further orders were to be taken. My DH was contacted by a potential customer and he advised the order could not be taken as the company were closing, they requested an alternative supplier and he provided them with a local company who were qualified to carry out the order.

A letter has now arrived from his ex employers solicitors demanding payment of the potential contract value by 31st December or they will commence court proceedings without further notice. They state his decision to pass the work over was detrimental to the company and he breached contract in doing so (not sure which contract they refer to as he didn’t have an employment contract). This was not the only contract that was declined by management due to company closure yet they are only pursuing DH for losses.

What would people advise we do next? We already have legal costs ongoing because of the employment tribunal and it isn’t an endless pot as DH has been out of work since his dismissal. Can the CAB help? We have a young family and this is sucking the life out of us as has been ongoing for a few months and with Christmas around the corner it feels as though the timing is not a coincidence.

I wouldn't ignore it. I assumed your DH is not a director of the Company. If so, it gets more complicated.

I would write back and say:

• At the top, write: 'Without prejudice save as to costs.'

Then make the following points:

• We note that the prospective customer that you refer to contact [DH] on [date], and that this is after the date that the company informed [DH] of its intention to cease trading. [DH] therefore acted in accordance with the Company's instructions, as notified to him in writing, and I attach a copy of the letter for your information.

• [DH] breached no contractual or other duty to the Company (I note as well that he in fact did not at such time have a written employment contract, so it is not clear to me which contractual duty he is alleged to have breached - Please also refer to the Company's breach of its obligation to provide written particulars of employment under section 1(2) of the Employment Rights Act 1996 in this regard).

I second checking your insurance. DH represented himself at tribunal against a large national company . Despite the judge agreeing they were wrong they won on a technicality because they had a red hot solicitor. We realised too late we had legal cover on our insurance.

Yup almost certainly a tactic to try to persuade DH to drop tribunal. Sunday's suggested response is absolutely spot on.

My guess also (as a lawyer) is that this a tactic to push your dh to settle the employment case. Pass to your solicitor and try not to worry.

It's normal practice for letters to be signed from the firm.

I also think this is a tactic to drive settlement. I would predict an offer to drop the contract claim if he drops his employment case.

To correct one misconception, your husband did have a contract of employment. The fact it wasn't written as such and he didn't sign a contract does not mean there wasn't one. He was working there and being paid so there clearly was. In the absence of any document claiming to be a contract of employment, your husband's contract consisted of the terms in the letter offering him the job, the particulars of employment (a document he should have been given either before he started or within a few weeks of starting - basically a letter setting out the terms), the company's handbook and anything the company has sent varying the terms of his employment (e.g. a letter notifying him of a pay rise).

I would recommend passing this to the solicitor dealing with your husband's employment tribunal case. However, based on the information you have given I don't think your husband's employer has a case. They can't show that he took a backhander from the other company because he didn't. And the reason the customer went elsewhere was that the business was closing, not because of your husband's actions.

Thank you so much for your responses, the prospective client had no interest in the company conducting works when they were advised of the closure so their total loss amounts to £0. The other manager is willing to witness what was verbally agreed in the management meetings regarding the turndown of any jobs not in the order book. I’m pleased that other people seem to think this is a reaction the tribunal claim against them as that was my first thought. Will pass it across to the solicitor today and try to forget about it for Christmas.

I agree that they are just using this as leverage to wear you down re the tribunal.

Is the letter a formal 'Letter before Action'? If so, you need to respond.

The letter demand a payment of £10,800 plus VAT before 31.12.2017 or an agreeable sum as settlement or they will start court action which will incur legal costs and interest.

Can your husband contact the company in question to confirm that they would never have placed the job with his ex employers even if he hadn't suggested an alternative to them? That should dispose of the claim.

That is an option but he doesn't want to do anything that may open him up to further allegations.

I think you simply need to reply saying that he was complying with the instructions given by the managers, denying that he has acted in breach of contract. He can state that it appears clear that this is little more than a try-on designed to try to to intimidate him in relation to the employment tribunal case and that he will be drawing it to the attention of the tribunal.

Is it headed 'Letter before Action', 'Letter of Claim' or 'Pre-Action Letter'? If it is, under the civil procedure rules it must contain certain info and options, and you must reply formally (if you google, you will get lots of info on the process). There must also be a suggestion for mediation.

You can ask for more time to reply, or for more information.

If it is not a formal 'Letter before Action', that would strengthen my feeling that it is a try-on, or a prop in the tribunal case, not a serious precursor to court action.

Hi Mumsnut,

The letter is roughly:

Dear Sir

(Name of company)

We are instructed by (name of company),

This is a formal letter that sets out your extensive liability to make payment to (name of company).

A brief background summary of the dates regarding his redundancy and mentions his dismissal.

Contract: (The supposed client)

It then sets out why they think there were losses attached to the prospective contract and the value.

The letter closes with:

In light of the above, we demand that by close of business on 31st December 2017, you either make payment of £10,800 nett plus VAT cleared funds to this office or you provide your proposals satisfactory to (company name) so as to make that payment. Such amount represents the loss suffered by our client as a result of your actions.

In the absence of either payment in cleared funds by the deadline or such proposals (as we say satisfactory to (company name)) court proceedings will be issued against you without further notice. Please note that such action will incur legal costs and interest. This letter will be brought to the court's attention.

In the meantime, our client reserves the right in respect of any additional claims against you.

There is no heading that matches those examples you have given and gives no mention of any other course of action other than make payment or face court action.

Regardless of the lack of a heading this is a letter before action. However, I remain of the view that, based on the information you have posted, they have no chance of success. Given the amount they are claiming this will not be a small claim so they will have to pay your husband's legal costs if they lose.

Just to add, the claim is completely wrong. Even if there was a breach of contract (which there was does not appear to have been) and they would definitely have won the job but for the breach (by no means clear), they could only claim the profit they would have made on the job. They cannot claim the full value of the contract. And the demand for VAT on the payment is ridiculous. They aren't making a VATable supply to your husband and the VAT on the contract if they had won would be payable to HMRC, so cannot form part of a claim against your husband.

I hope the solicitor who wrote this letter has advised the company that their action has no chance of success. Unfortunately they may not take the solicitor's advice. But you should not be intimidated by this.

Thank you prh47bridge for your response.

Given that you have identified this as a 'Letter before action' (minus the official heading) we will continue to seek our solicitor to deal with the response.
I was also dubious of the value they placed on their prospective loss as this does not take into account the cost of carrying out the works, however, nothing surprises me with them anymore.

It seems strange that the solicitor did not make reference to the potential for mediation or DH's ability to request further information should he feel it necessary or is this a common tactic?

I do appreciate everyone taking the time out to respond as this is an incredibly stressful time and each reply has helped bring some perspective to what we are faced with. I had us homeless by summer and appearing in the next episode of 'Can't Pay We'll Take It Away'.

As before, I'm not an expert, but I think they would have to show not only that DH lost them all that money (which he didn't, as per previous posts, only the potential profit for the job), but that he did so deliberately for personal gain?
People make mistakes in business that lose a company money, but generally don't get sued for the dosh, they surely have to show that he deliberately did something wrong, and that he had been given clear guidance on what he should be doing instead.

Letters before action often don't refer to mediation or the ability to request further information. They are usually framed as a demand for money with a deadline for payment following which action will be taken.

I think they would have to show not only that DH lost them all that money (which he didn't, as per previous posts, only the potential profit for the job), but that he did so deliberately for personal gain

No they would not. If they could show breach of contract that is potentially enough to take action. A genuine mistake is not cause for action but breach of contract is, regardless of whether or not the person breaching contract did so for personal gain. If you cause a loss to the other party through breaching your contract with them you are liable for that loss.

However, in the situation described by the OP, I don't think her husband is in breach of contract, nor do I think they can prove any loss let alone the loss they are attempting to claim.

I feel that the company has some other serious problem with your DH. You might have to talk more to learn more.

I feel that the company has some other serious problem with your DH

Surely their other problem is that they've sacked him and he is taking them to tribunal. If you think it is something else, what evidence is there to support your theory?