I've just read this consumer case and it raises an interesting problem I had no idea existed:
https://www.theguardian.com/money/20...company-status
Could the consumer pursue a civil case against the individual to reclaim the money?
I've just read this consumer case and it raises an interesting problem I had no idea existed:
https://www.theguardian.com/money/20...company-status
Could the consumer pursue a civil case against the individual to reclaim the money?
It's been this way forever. Dodgy traders can hide behind limited company status by starting up new companies as they're not personally liable for the company debts. As the article infers, you can chase them, but the cost is highly likely to outweigh any recompense.
It might not have helped in this case, but never ever pay fully in advance for building work and if possible don't pay anything on top of a resonable deposit until the corresponding work is signed off (staged payments)
A couple of years ago we were thinking of getting a big extension done. When we were speaking to the architect he was saying something about you MUST have someone to manage the whole building process and part of that is to set paid stages of construction that have to be signed off before payment.
Surely by existence of his CCJ, the claimant becomes a creditor, why cant he start a winding up order on the basis that the directors have misbehaved in some way, if he could prove this they would then become personally liable and he could enforce his order. obviously due diligence and the investigation would be expensive but it would give him some satisfaction and would certainly give the builder some sleepless nights.
I'm not a lawyer, but I thought that the purpose of a limited liability company was to limit debts to the company, not the personal assets of the directors (unless they, for example, add a personal guarantee for a loan).
This brings additional responsibilities to the company, such as requirements for accounts and the need to pay corporation tax on profits.
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Didn't someone in another thread claim they sued a builder not the company?
As previously stated, this as always been the case.
In the commercial world, the end client will enforce a limit of liability onto the builder they are dealing with. The last time I did this, the minimum amount was £10m. If the builder subs the work out, then he has to force the same limit of liability onto the subbie, who in turn is required to push the same limit down the chain and so ad infinitum.
This way, the company who screwed up is liable be hit by everyone else above him in the chain and the liability insurance confirms acceptance of this.
The problem in private cases is that the client who is a punter does not know this and just assumes the builder is liable for any damage, and in most cases, the builder will put things right, just to protect his name. However, legal enforcement is in the lap of the Gods.
The worst thing a punter can do is pay by cash with no receipt, then enforcement is particularly difficult.