In July I featured Mary Birchall (Derwen Stores, Bala, Gwynedd) who was up for collecting names of retailers stuck with five-year leases with failed photocopy company Lanwall, with a view to possible collective action. I suggested she talk to the network Lawyers for your Business for some free advice.
She was told: “You won’t win. Photocopy companies are hell on wheels. You could all put some money in and hire a barrister, but it will be pricey.”
Meanwhile, I should point out that the finance company CF Asset (a wholly owned subsidiary of Halifax Bank of Scotland) that arranged Mary’s financing for the Lanwall deal, had struck a more direct blow by dropping the debt collectors in favour of solicitors.
Solicitors are quite different to debt collectors. For one thing, debt collectors don’t much enjoy going to court. With solicitors it’s like playing at home, their natural habitat, and they get to whack in a fat bill to their client.
It’s breathtaking: demands for up to £5K for a bit of kit (that doesn’t work) that could have been bought for relatively peanuts.
Mary has now seen her local solicitor (and I would advise this if you get a demand from solicitors acting on behalf of the finance company yes, you might think it is throwing good money after bad but it will be worth it in damage limitation). She is now negotiating to pay a certain amount upfront followed by instalments.
Her solicitor has filled in the income and expenditure form sent to her with the court papers and has suggested that Mary file a counter claim. This costs £95, but will show that you also mean business.
It’s worth bearing in mind that courts offer a mediation service for claims under £5K and CF Asset would be obliged to pay for that.
Not everyone is giving in. Bob Singh, Abington Stores in Cambridge, is going to fight. We will follow the story.