Small Claims Court- Help

georgia0304

Hi, I'd appreciate any help I can get I am fast running out of ideas.


I issued a small claims action over 12months ago against a company for a failed damp proof. We went right to the end of the process inc mediation when the company went bust ! This company was a ltd company. The liquidator told us the company had no assets.


I have subsequently found out through companies house that the director had opened a similar named company 12 months before he went bust. Am I eligible to serve him with the same small claims notice.


My dad remembers watching something on a consumer rights programme on the BBC but cannot find any info online.


Any help will be appreciated.
Thanks

Crazy_Jamie

The general rule is that directors and companies are separate legal entities. If your contract was with the company, it is the company alone that you have legal recourse against. If the company goes into liquidation with no assets then that is unfortunate, but there is usually nothing that can be done about it.

There is an exception to that rule where companies are set up essentially as sham entities to deflect legal liability from the director. In some such circumstances it is possible to bring a claim against the director, a process which is called 'piercing the corporate veil' in legal spheres. The law on that area is not especially straightforward, and in any event it's not possible for me to advise you on it without more details as to the nature of the company and its history. If you are suggesting that the director keeps setting up similar named companies that then go bust, it may well be that there are grounds to show that they are sham companies, and that he should therefore be personally liable for the debts. But again, proving that is usually not straightforward. It may well be that your best course of action would be to go to a solicitor with your paperwork and get some legal advice in a consultation. No doubt you would have to pay something for that, and it may ultimately be a case of throwing good money after bad, but it's ultimately down to you to decide if that is worth doing.

On a side note, you have made reference to the director going bust, which I assume is a type and you meant the company. If the director has gone bust personally, he may well have no assets of his own which would make it pointless to bring a claim against him.

InsideInsurance

What sort of sums of money are involved?

As discussed, it is possible to hold a director personally liable in certain circumstances however it is a fairly complex process and may well push it out of the Small Track of the County Court (aka small claims court) in which case you risk having to pay the defendants legal fees if you pursue it and lose.

Do you have legal expenses/ protection cover on your home insurance? If you do you could see if they are willing to deal with it for you

georgia0304

Thanks to both of you who replied.

As yet I have only evidence that one of his companies went bankrupt but I will keep a check in the future. The sum was for £2500 so not a large sum but enough !
I don't want to run the risk of having to pay his legal fees and costs too so will tread with caution.


I know its a long shot getting my money but least I know what routes to take if I get the evidence.

Thanks Again

bris

In general no, you have no claim.

Trading standards would be able to advise you further, if they are looking at the directors because of past history then there is slim hope but if not then you really don't stand a chance.