Problem: Our client, a former company director, was served with a statutory demand for an alleged debt exceeding £810,000, linked to a personal guarantee. The demand carried serious implications, including the risk of bankruptcy, and required immediate legal intervention to dispute its validity.
Outcome: Our expert insolvency lawyers successfully applied to set aside the statutory demand. We presented compelling legal arguments and evidence, leading the court to set aside the demand and award costs in our client’s favour on an indemnity basis.
How long did it take? Around 7 months.
Our client contacted us after receiving a statutory demand that alleged they were personally liable for a significant company debt. The demand was distressing, given the substantial amount involved and the potential consequences of bankruptcy. Upon review, our legal team identified multiple grounds on which the demand could be challenged, and we swiftly moved to protect our client’s interests.
Basis for Challenging the Statutory Demand:
- Disputed Debt: The debt claimed within the statutory demand was disputed on genuine and substantial grounds. Our client had previously entered into a settlement agreement with the claimant, which superseded any personal liability under the original agreement.
- Supersession of Personal Liability: The original liability was negated by a subsequent agreement, wherein the claimant confirmed that personal guarantees would not be enforced and that the debt would be managed through a new arrangement with the company.
- Procedural Defects: The statutory demand was procedurally flawed, with discrepancies in the amounts claimed at different sections of the demand. It also improperly included unliquidated and disputed sums such as legal costs and VAT, which are not permissible in such demands.
- Failure to Comply with Dispute Resolution: The claimant failed to adhere to the dispute resolution procedures outlined in the original agreement, which required the parties to enter into mediation before escalating to insolvency proceedings.
- Defective Re-Issuance: After the initial statutory demand expired, the claimant issued a new demand that was nearly identical to the first, failing to address the significant defects previously raised by our client’s legal representatives.
Our application to set aside the statutory demand was supported by comprehensive evidence and clear legal arguments. The court agreed with our position, ruling that the demand was invalid and should be set aside. Additionally, we successfully argued for costs to be awarded on an indemnity basis.
When costs are awarded on an indemnity basis, the court orders the losing party to cover all the legal costs incurred by the winning party, except those considered unreasonable. This is in contrast to the standard basis, where typically only 70-80% of the legal costs claimed are awarded. Indemnity costs provide a higher level of recovery, ensuring that our client was not financially burdened by the claimant’s unwarranted actions.
Our client was pleased with the result that we achieved and our client left our lawyers with the following testimonial:
“Incredible service! He’s meticulous and most importantly doesn’t leave any stone unturned. His wealth of knowledge and experience gave me assurance and peace of mind when going through our litigation process, and Karim was swift in his process from start to finish. His personable approach has made it a truly unrivalled experience!”
Our insolvency lawyers have a proven track record of successfully setting aside statutory demands and protecting clients from severe financial consequences. We combine legal expertise with strategic insight to achieve the best possible outcomes for our clients.
Need Help Setting Aside a Statutory Demand?
If you’ve been served with a statutory demand or are dealing with any insolvency issues, contact us immediately. We offer a Free Consultation on 0207 459 4037 on a no-obligation basis, or you can complete our online booking form today. Let us help you navigate these complex legal challenges and protect your financial future.
