Delay in paying invoices can worsen financial troubles

Prompt payment of invoices can be painful for companies under financial pressure – but delay can lead to court action and the additional burden of legal costs. In one such case, a property development company was ordered to pay more than £110,000 to a creditor – and another £45,000 to the latter’s lawyers.

The company had instructed an engineering firm to provide advice in connection with a proposed development. The latter launched proceedings after a number of its bills remained outstanding or were not paid in full. However, the company disputed the debts and counterclaimed, accusing the firm of professional negligence.

In entering summary judgment in the firm’s favour for the full amount claimed, the High Court found that the company had no arguable defence in respect of some of the invoices. Its defence in respect of the others was struck out due to its failure to comply with the Court’s case management directions.

The company’s professional negligence claim was also struck out on the basis that it was unsupported by expert evidence and could not succeed. It was ordered to pay a total of £110,767 in respect of the invoices as well as the firm’s legal costs. It was given 14 days in which to pay £45,000 on account, pending assessment of the final costs bill, which the firm’s lawyers had estimated at about £77,000.

Contact: Graeme Weir