Case Study: Production Process and Machinery Hire Contract Dispute

The claimant installed a bottling production plant into a well-known water retailer, but the system was not commissioned for actual use.

The claimant invoiced for £107,000, as per the contract agreement, but this was rejected by the retailer. The claimant presumed this was nothing more than a delayed payment or bad debt, so instructed its local solicitor to pursue it.   This resulted in the defendant counter claiming for around £300,000 to scare the claimant away.   Even though the claimant was prepared to accept a 50% discount to resolve the matter, the defendant was unwilling to move at all.

As the defendant had not made any attempt to pursue the counter claim - indicating that it was nothing more than a scare tactic – the machinery business engaged a well-known regional law firm to help it recover the amount it was owed.  After incurring around £25,000 in legal fees, the lawyer concluded that it could not make any further headway and discouraged the defendant from litigating as the expected return was unlikely to justify the cost.  This means that the client had lost two years of time and incurred fees equivalent to 25% of its original claim, without any progress having been made.  

The client heard about Escalate, made contact and was subsequently engaged.  This is now an ongoing litigation case.

Armstrong Watson has been given the rights to use this case study by Escalate, an award-winning, accountancy-led commercial dispute resolution service.