Difficulty getting paid? Tried everything else, but reached the end of the road? Well, you’re not alone. At JH Flooring Consultancy, we are frequently tasked with supporting our clients in raising, managing and reaching conclusions to third party action to recover their outstanding debts. This is particularly true for medium-sized JCT or client-facing disputes; too small to fall under arbitration, but too large to just ‘walk away’. Yet, in spite of this, there are still so many subcontractors that do exactly that - walk away. Sometimes from quite substantial amounts. This may sometimes be due to a lack of knowledge or experience with civil claims and the courts. Or perhaps they simply don’t want the hassle, or have little appetite for dispute. Whatever the reason, many millions of pounds annually remain wrongly in client or main contractor pockets in the UK thanks to a reluctance by the subcontractor to pursue a formal claim.
And whilst it is always advisable to take legal advice or representation, it is not always affordable, and nor is it essential. And contrary to most people’s belief, you may be unlikely to recover all of the cost, even if you win your case. That’s why many people decide to raise and manage their claim themselves as litigant-in-person. But the question is, is it worth it? Well, when assessing if a clients claim is viable for them to pursue themselves, we find the ready-reckoner below can sometimes be a useful tool in helping them to make a decision.
We would advise you that, before you make any judgement on the viability of your claim, if you have a formal contract with your client, make sure you have exhausted any other means or processes outlined in it for dispute resolution, as they may affect the jurisdiction of a civil claim with the court. This calculator should not be used as a stand-alone tool, is for civil claims, comparison purposes only and applies to flooring related claims that fall under English Law only. Applicable at April 2024. We would always recommend seeking advice from a solicitor before proceeding with a claim.
To run this calculator, you will need to know;
- The amount of your claim in GBP (a), including any interest.
- The claims track you will most likely be awarded on direction (b), which will be the value 12 for claims under £10,000.00, the value 24 for claims between £10,000.00 and £25,000.00 and the value 48 for claims over £25,000.00.
- The likely chance of success (c) as a %.
- The liquidity of the person or business that owes you money (d) as a % of likelihood they will be solvent in 12 months’ time.
- Whether it is a disputed or undisputed amount owing (e) which would carry a value of 4 for disputed and 1 for undisputed.
This can then be roughly calculated as;
(a * c * d) – ((a * 0.32) * (1 – c))
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b * e
The result is the possible amount of money you will recover per hour of work that you have to put in trying to get it, on average. This may vary depending on whether your claim reaches a hearing or is settled before that point, but gives a rough guide to the general viability of your claim.
So, for example, an undisputed claim for £1,200.00 which an established client is simply refusing to pay might be;
(£1,200.00 * 90% * 95%) – ((£1,200.00 * 0.32) * (1 – 90%))
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12 * 1
This has the potential to return an average hourly rate of £82.30 per hour of your time*
Whereas a disputed claim for £12,000.00 from a financially unstable client might be;
(£12,000.00 * 50% * 50%) – ((£12,000.00 * 0.32) * (1 – 50%))
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24 * 4
Which despite being ten times larger in value as a claim, only returns about £11.25 per hour of your time*
* Hourly rate is approximate, indicative only and subject to other influences. Every case is different and this should not be taken as accurate, merely a comparison. Please contact us to discuss your case further for more specific advice to your requirements.
We hope that you find the above interesting and useful. If you would like any clarity or further information, or have a subcontractor claim that you would like to discuss, please get in touch on 07918 683667, or at info@jhflooringconsultancy.co.uk