Rogue Director Debt Recovery

Advocate has successfully recovered £2.2K from a Gloucestershire builder; in a case, the client had fully expected to be settled in court. It took us six days to recover a debt which had been the bane of our client’s life for more than three months. Our client had done numerous jobs for the builder over the last five years as a subcontractor supplying materials and labour for the refurbishment of offices and retail units. This particular job was to replace a ceiling in the end customer’s Worcester HQ.

Collateral Damage

Having initially queried the absence of a purchase order number when awarded the first trench of work five years ago, our client had received assurance that anything requested by this particular director would not need a supporting PO. Historically payment had always crept beyond the 30-day credit terms, and invoices cleared without too much hassle. Fast forward to the ceiling replacement, and the lack of PO unexpectedly became an issue when the director went AWOL. The Gloucestershire builder refused to engage with our client unless they could provide a copy of the PO, which both sides knew did not exist. Getting nowhere and accepting that payment would only be obtained in court, Advocate was instructed to commence pre-action protocol.

Upon opening the file, our research indicated the very director our client had liaised with all these years had abruptly left the business. Speculation as to why ranged from early retirement to misconduct and fraud. Such was the informal relationship with our client; the absent director had approved the Worcester HQ ceiling works over WhatsApp, having preferred the app to email correspondence in the last year of their tenure. Initial feedback from the debtor and shareholders was that the end customer had no record of our client being on site. They also maintained that POs had always been mandatory for subcontractors. We put it to them our client had been instructed by a rogue director to use WhatsApp, and the completed works had been acknowledged with appreciation in the same conversation. We also made clear that our client acted in good faith and had no reason to think this particular job needed a different procurement protocol than that applied over the last five years.

Simple Choice – Payment or Proceedings

In a bid to buy more time, the debtor indicated there were other creditors in a similar position and pleaded with us to hold off court proceedings for a month. Given the age of the invoices, our client was rightly unwilling to allow more time. We reiterated the urgency and our client’s position once more. Eager to avoid incurring further statutory charges or blemishing their credit rating with a CCJ, full payment was received 24 hours before the 7-day Final Demand was due to be issued. This was simply a case of making sure our client ceased being treated as collateral damage in a war between shareholders and a rogue director.