A Costly Decision – choose the way you resolve your dispute wisely

There are a variety of ways in which you can resolve a dispute and there are effective alternatives to court proceedings. However, not all methods are appropriate for all disputes and it is sensible to seek proper advice as which method is the most suitable for your particular dispute.

This was clearly brought home in the recent case of Ro-Bal Steel Fabrications Ltd v G Jones Site Services Ltd [2016]. In this case there was a dispute over whether the payment mechanisms set out in the Construction Act applied to the contract between the parties. G Jones Site Services Ltd (G Jones) issued a winding-up petition against Ro-Bal Steel Fabrications Ltd (Ro-Bal) to recover an alleged debt of £6500. Ro-Bal had failed to serve a payless notice as required under the Construction Act so G Jones considered that Ro-Bal could not dispute that the debt was owed.

A winding-up petition is not a suitable method of debt collection where the debt is genuinely disputed. The dispute here was not whether a payless notice had been served, but whether the requirement to serve a payless notice as set out in the Construction Act applied to this particular contract. The court held that as a result there was a genuine dispute about the debt and a winding-up petition should not have been issued. The court dismissed the petition and G Jones ended up with 2 legal bills: it’s own and Ro-Bal’s bill of £13,750. This proved an expensive way to recover a debt of £6,500.

Construction litigation expert, Tracey Ashford, says: “There was a more suitable and cost-effective way to resolve the dispute. The dispute could have been referred to adjudication, which is a quick and relatively inexpensive way of resolving disputes in the construction industry. The adjudicator could have determined whether the Construction Act applied and any decision reached by the adjudicator could have been enforced by the court. The risk of paying two legal bills would have been removed as in an adjudication each party pays their own costs regardless of the outcome.”

We at Thursfields are experts at advising you on the most appropriate way to resolve your dispute. If you need help and advice on any dispute you are currently facing, contact Tracey Ashford on 01562 512484 or tashford@thursfields.co.uk, to discuss your options.

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