Springdale Legal

The recent decision of the England and Wales Court of Appeal in Berkeley Square Holdings Ltd & Ors v Lancer Property Asset Management Ltd & Ors [2021] EWCA Civ 551 is a reminder that ‘without prejudice’ communications during mediation are not necessarily protected from later use by either or both of the parties. It was affirmed that parties to ‘without prejudice’ ADR are permitted to adduce evidence from this process to prove misrepresentation, fraud or undue influence on the part of the other party. For more information, see https://www.lexology.com/library/detail.aspx?g=3978d05d-6cee-453d-8aae-83bb4cae9dde&utm_source=Lexology+Daily+Newsfeed&utm_medium=HTML+email+-+Body+-+General+section&utm_campaign=Lexology+subscriber+daily+feed&utm_content=Lexology+Daily+Newsfeed+2021-06-10&utm_term=

Some interesting articles recently in relation to one of the more common taks of a smaller practice - Recovering a Debt including Letters of Demand. For anyone running a business (including solicitors!) it is a fact of life that sometimes people don't (or can't) pay...
Broadly, Solicitors' Conduct Rules (although not strictlyin force in WA, they still guide practice here) provide that letter of demand cannot:
- include any statements that grossly exceed the legitimate assertion of the rights and entitlements of the solicitor's client, and which misleads or intimidates another person;
- threaten the institution of criminal or disciplinary proceedings against the other person if a civil liability to the solicitor's client is not satisfied.
- use tactics that go beyond legitimate advocacy and which are primarily designed to embarrass or frustrate another person.
The same restrictions as apply to debt collectors also should be followed in legal correspondence, namely:
- If something is only a possible consequence of not paying a debt, ensure no impression that it is a definite consequence;
- Before asserting the right to payment of administrative and/or legal costs on top of a debt amount, ensure the client has a legal entitlement to claim this amount;
- Ensure no impression that debt collection letters and notices are documents that have been or are able to be filed with a Court.

In such correspondence it can particular wise to not the obiter in SIMIC & NORTON[2017] FamCA 1007 at [19-20]:
'Solicitors are not employed to act as ‘postman’ to vent the anger and vitriol of their clients.... The solicitors are professional legal practitioners and charge significant hourly rates for their time and skills. To that end, they must ensure that correspondence and communication is necessary, balanced, considered and relevant.'

More information here: https://www.mondaq.com/australia/court-procedure/1075002/chasing-debtors--the-solicitors-letter-of-demand?email_access=on

If a letter of demand does not work, there are many option s to proceed. If the debtor is a company, a statutory deman can be used.
A statutory demand is a demand made to a company by a creditor under Section 459E of the Corporations Act, which if not paid or set aisde, can result in a company being wound up. It can be made by a person who is owed a debt, or more than one debt, totaling more than the statutory minimum, which, from 1 July 2021, changes to $4,000. More information here:
https://www.lexology.com/library/detail.aspx?g=60c9cd53-f125-41f6-a842-4b1bea618788&utm_source=Lexology+Daily+Newsfeed&utm_medium=HTML+email+-+Body+-+General+section&utm_campaign=Lexology+subscriber+daily+feed&utm_content=Lexology+Daily+Newsfeed+2021-06-03&utm_term=

Chasing debtors - the solicitors letter of demand - Litigation, Mediation & Arbitration - Australia Legislation, conduct rules and guidelines impact upon what your solicitor can and cannot say in a letter of demand.