Anybody? Any thoughts / ideas / experience recovering debts under a JCT contract?

Hi - the previous post is part of the same house, that was in relation to a staircase and a very dodgy steel fabricator that has now gone into liquidation. This post is regarding the main contractor. It was partly down to the main contractor that the stairs were delayed. Re this post - we are stuck regarding how to best to proceed. Any thoughts greatly appreciated. Kind regards,

Hello, We employed a contractor to run a building project. Fast forward three years - they went over time, over budget and now owe us money. Contract details as follows: JCT Intermediate Building Contract 2016 Contract signed early 2017 Work commenced early 2017, due to complete end 2017 The contractor is a sole trader, not a LTD We have finally (just) finished after almost 3 years. Due to the overrun, contractor over-spending, some dubious valuations by the contractor, the need to pay for some contracts / sub-contractors directly, we finished with the contractor owing us money (c.£40k)*. An Interim Certificate was issued by the Contract Administrator in late 2019 which, per the contract, gave the contractor two weeks to pay. In parallel, Liquidated Damages (additional £10k's) were also charged due to the project overrun.* These two amounts remain unpaid, and so are now debts under the contract and subject to interest. *Note re how we got here: We know this is a significant debt / sum of money. We assessed all other possible routes / ways forward at the time; and continuing was the least worst option. We got quotes for other contractors to complete the work, and continuing as is was the quickest, cheapest and least stressful option. We have done everything in our power to minimise the debt, and we have fought to keep this moving until the end. The contractor was out of his depth and got into debt with his sub-contractors. We believe we have come out of this with the best result given everything, but we knew we would need to sort out the mess at the end. The Contractor agreed at the time. He acknowledges that there is a debt to pay. We are also aware of other debts that the contractor has too. So, he is not in a good place. We have tried to reach an agreed way forward to settle the debt. We had a lawyer draw up a repayment agreement. But, we have been unable to settle on a repayment period. Clearly, we wanted it to be repaid quickly, with some security. The Contractor has proposed a 7 year repayment plan with no security (i.e. a charge), which we think this is too long. But he has stressed it is the "most he can afford", and this will take him well into retirement age which is also a concern. We are also looking at a claim against the Contractor via the site insurance we took out at the start. The insurer has requested an Independent Expert Report and suggested we need to go thought Adjudication (RIBA) prior to legal action. We have asked them what this needs to cover exactly, as there is no dispute it is just that the contractor does not have money to pay the debt. We are awaiting a response. The reason for the post is to seek any thoughts / advice on how to proceed? There are a few options on the table, these are: Sign a repayment agreement (ideally quicker than 7 years and ideally with some security / a charge on his house as not LTD) Other than a charge on his house, what other security options can we look at? Complete the Expert Report and Adjudication as requested by the Insurers, then progress a legal case (this will cost us £ thousands) See if we can claim on the Contractors Site or PI Insurance (I doubt this, but will check) Start legal action privately (initially sending a Letter before Action, this could cost lots) We have spoken to a lawyer re the 4th option, but welcome views on this forum on such action at this stage. We welcome any other suggestions / thoughts on best ways to move forward? Kind regards.

Hi - just following up on my question. If one has a specification and agreed price for some work and at the end is told there is extra to pay for whatever reason, is there anything that says you need to be told in advance? I assume there must be, otherwise people will just charge whatever they want. Or, is this all covered in section 51?

They have installed the main structure (steel) and roughly installed the balastrades. They still need to clad the treads in timber, add hand rails and finish the glass. Mostly by email.

Does anybody know of there is a need or right to have been given a heads up of possible price increases before work is conducted? We have paid the full agreed installation cost but have only received 70% of the agreed work to date. We are now being asked to pay an extra 25% on top of the agreed amount for the work that is complete (so, we will have paid 125% for 70% work). This extra has never been requested or discussed. But, they are saying they will not return or finish work until the new balance is settled (new balance being the requested extra to cover the work already completed). Work has now stopped until the (unagreed, retrisoectuve) increases is paid. Surely we should have been told that there would be an increase before work starts and before getting into what is basically now a hostage situation. Is there any legislation we should refer to when discussing this with the installer? Or does this fall under the legislation that says costs must be reasonable and it is unreasonable to request retrospective payments with no prior warning?

We have a separate / specific specification and cost for the stairs from the stair fabricator. It is not lumped in with broader works.

Nothing changed in the design. In total, the extras are c.25% on top of the agreed cost. About 5% of this is due to delays - increased labour and material prices. This is tolerable as there was a delay of 12 months from paying to installing. The other 20% is for additional costs due to: his cost increasing because he moved premises installation difficulties (although, nothing changed from spec or areas being installed in) other random reasons that have no bearing on reality

We have a separate / specific specification and cost for the stairs from the stair fabricator. It is not lumped in with broader works.

We had an agreed cost.

This is in relation to another post regarding stair work caried out by a steel fabricator. We have paid the fabricator in full for the entire staircase although the work is far from complete. The fabricator is asking for additional money for work that has already been undertaken. He is asking for an additional £1500 for design drawings and an additional £2500 for additional installation costs, plus other costs in relation to increases in material costs. In no case have we made aware there would be any additional cost and we did not agree to any additional cost. However, he is saying he will not progress with any work or documentation until the bill is settled. My question is - is there anything in my consumer rights that says I must be made aware of costs and cannot be retrospectively charged? I am aware of clauses regarding costs must be reasonable, or are these really one and the same?

Just one final question. We will write to ask for a detailed breakdown of the costs and increase. In the fabricators last email, he attached T&Cs (part of a Credit Form). This is the first time these have been provided. They were sent "without prejudice", but we do not want to be trapped by some new T&C we have not seen and he is trying to apply retrospecivelly. How do we reject these / make it clear we do not accept them given they are retrospective?

Thank you BankFodder

Agreed That is what we started last week. That is what caused him to start emails "without prejudice", to start quoting T&C and to suggest we owe him more for work completed etc Agreed. We are not alone on this, I now know of at least two others that are less than satisfied with the services from this company. One of those is considering legal action, but is negotiating. I think this is just how they do business.

T&C were not presented or referenced other than a small point in a footnote in the email, which also covers confidentiality, hours of business etc. Thus: "This electronic message contains information from XXX Fabrication Limited which may be privileged and confidential. The information is intended to be for the use of the individual(s) or entity named above. If you are not the intended recipient, be aware that any disclosure, copying, distribution or use of the contents of this information is prohibited. If you have received this electronic message in error, please notify us by telephone or email (to the number or address above) immediately. Activity and use of email at XXX Fabrication Limited is monitored to secure its effective operation and for other lawful business purposes. Communications using this system will also be monitored and may be recorded to secure effective operation and for other lawful business purposes. All works carried out by XXX Fabrication Limited are carried out in strict agreement to our Terms & Conditions. (copy available on request). Any emails received after 5pm Monday - Friday or during the weekend may not be received or read. If the email is urgent it needs to be sent during our working hours. Our working hours are Monday - Friday 8am - 5pm " It doesn't feel that these "have been brought to our attention". However, we should have checked. Either way, the T&C we have now been provided (last week), which are part of a Credit Application form, that we didnt sign and didn't take credit, also dont really cover this situation. The only part of the T&C that covers cost relates to variation as follows. I guess 1.2 is the one that covers delays. But, categorically the specification and design did not change. Re (2), no rates were provided.