Non-payment of a settlement sum - consultancy services case

The Client

Individual Client.

Value of Dispute

£40,000

The Commercial Dispute

Our client provided consultancy services to the Defendant Company over a period of time. These services included responsibility for supporting the business activities of the Managing Partners, raising capital, investments, due diligence (relating to the portfolio of companies) and assisting to manage cash flow within the company.

Upon termination of our client’s services, a Separation and Release of Claims Agreement was entered into by both parties, which involved payment of a settlement sum. In a clear breach of this agreement, the Defendant Company then failed to pay the settlement sum, despite repeated requests for payment.

How Escalate Resolved – Services Used

As a result of the Defendant’s failure to respond to the Claimant’s claim, Escalate quickly moved to issue and serve proceedings within one month of being engaged.

The Defendant continued to ignore the claim and consequently, we obtained default judgment on behalf of the Claimant. At this point, the Defendant began to provide assurances that payment would be made, but failed to pay the sums due under the judgment.

As Escalate were pursuing the same company for a larger debt on behalf of a separate client at the time, the Claimant in this particular case was able to support the petition of the other client. This reduced costs incurred, and we promptly moved to wind up the company as a result of its inability to pay its debts.

This was done during the period of Covid-19 where a moratorium was in place against bringing a winding up petition, unless it could be shown that Covid-19 did not affect the Defendant’s ability to pays its debts.

When bringing the petition, we were able to show that Covid-19 had not affected the Defendant’s financial position, as a result of the assurances made by the Defendant during and after proceedings.

Payment of the debt was finally made to our client and the other separate client two days before a Winding Up Hearing. The final amount included all costs and interest, as well as the costs associated with bringing the petition.

From start to finish, the case was resolved less than six months after issuing the claim.