Legality and reality!

Being a solicitor can involve wearing more than one hat.

If we’re doing family law, then not only are we giving legal advice, but we’re often giving financial guidance as well as a degree of emotional support to the point where you can sometimes feel like a counsellor.

In construction disputes, we need to have a degree of understanding about building issues.  I have (at various times in my career) had far more knowledge that I felt was appropriate on what causes damp and how to deal with it.  I was also (at one stage) the office authority on insect infestation.  Who knew that being a solicitor could be so diverse!

However, in all areas of law, you need to be able to give both legal and commercial advice.

Sometimes this can be quite basic.  No matter how good your case is, there is probably no point in issuing proceedings against an insolvent company or someone who has been made bankrupt.

At other times it can be more nuanced.  For example, sometimes it can be more about the relationship between your client and the other side that is relevant.  The client may be of the view that no matter how clear it is that the money is due and owing, he can’t sue his best customer because they will never use him again.  That may well be true, but does he want to continue working for a client that isn’t going to pay him, when he might be better off spending his time looking for new clients who will honour their obligations.  Overall it’s a balancing act, and the client must consider both the legal and the commercial issues before deciding what to do next.  Simply because he has the law on his side, does not mean that that is the end of the discussion.

You may feel that advice like this is fairly obvious, and certainly I would agree.  Which is why it is with some surprise that I’ve been reading about the government’s plan to introduce new legislation to put pressure on companies to pay promptly.  For example, it is proposing to make it mandatory that invoices be paid within 60 days – you cannot agree to a longer period.

Firstly, the parties should be free to agree to the terms that work for them.  If I’m willing to wait 120 days, and it suits me to agree to my client’s terms, then I shouldn’t be told by a third party that I’m not allowed to do that.

Secondly, and perhaps more importantly, there is the issue of enforcement.  The issue is rarely limited to just what the parties agreed, but whether both sides adhere to them, and if not, what options are available to the aggrieved party.   That party still has to be willing to take action and risk souring the relationship with the other side, and even if they are willing to take that step, they’ve got to consider the legal and financial implications of that step, which includes considering whether the other side are good for the money.

Whilst there are rarely any simple answers, I do have some suggestions.  These include

1.Making sure your Ts and Cs are as clear as possible and clearly agreed.  You may take a commercial view and decide not to enforce them immediately, but better to have them and not need them, than need them and not have them.

2. Make sure that the other side have agreed to your Ts and Cs – that doesn’t necessarily mean that they have to have signed them (although that’s always an added bonus) but they have to have at least received them, and certainly before any works are done or services rendered.

3. Do your due diligence on your clients before you agree terms with them.  Are they good for the money.  Is there any evidence to suggest that they are slow payers.  Are they willing to make a payment on account as a sign of good faith on their part.  Is there any security that they are willing/able to offer.

4.Have a clear and consistent policy on what you do when people pay late – if they know that you chase and put their account on hold whilst there are arrears, they are much more likely to pay up on time.

5.Make sure you’ve got my number to hand so we can catch up if you need some legal advice.

Kleyman & Co Solicitors.  The full service law firm.  Available at the drop of a hat.