Any lawyers out there?

[number8]

Is it legal to withhold payment of invoices for work already completed for a customer, because there is an insurance claim in the pipeline - the person concerned refuses to pay for work already completed until as such time as they have received confirmation from the insurers of the person that has done the work that his insurance company will pay the customers claim. Thank you

[FTVS]

well it is not a matter of legality as it it a civil matter, so the one would say unlawful. Who is the invoice addressed to? Who istcuted you to do the work? If it is your client then they are liable to pay and that is just it (unless you have another specifc agreement in place that you will await reimbursement by insurers). From a practical point of view you should consider whether they actually can pay without the insurance money. Maybe they are simply potless at present and you might be able to agree staged payments?

[FTVS]

I'm just re-reading your question. Why are the insurers of the person doing the work paying? Is there a dispute ongoing between them (aside from payment dispute)?

[number8]

Sorry - I don't think I've made myself clear. I have a car transporter company. I have delivered on a number of occasions for a particular client. As a result of the work I've been doing I have been regularly invoicing my client for the work I have undertaken. Recently two of my client's vehicles were stolen from one of my transporters. I am liable and will be submitting a claim to my insurance company for payment. My client has advised he will not pay my outstanding invoices for the work I have already done until he receives payment from my insurance company for the stolen cars.

[Hippy]

Scubaboy, I can see whay your customer may feel a greivance against you, and as the loss of his goods was not of his making but happened when you had charge of them he will want restitution from you. He may well think that by witholding payment legitimately due to you for other matters may speed up the settlement, but the payments that he is witholding are not related to his loss and therefore should not be witheld.

However, as this is a civil matter you will have to pursue the customer under breach of contract through the Small Claims Court, and the customer will almost certainly counter claim against you for the loss of his property, even though it may have been the subject of an insurance policy. So, to issue against the customer will only worsen the stalemate.

A far better solution would be to prod the insurance company for a swift settlement, which in truth is what both of you want.

[number8]

Thank you

[Harley]

I disagree.Each journey is a seperate contract and not part of a larger single contract. Therefor you are entitled to be paid for the work you did prior to the claim,there is no right of equitable set off.See a solicitor.

[Ewood27]

There's another point here. Do you really want to take a major customer to court, generate bad feeling and lose his business? Do you want a reputation for rushing straight to court the moment there's the slightest problem? Will that persuade new customers to beat a path to your door? I suggest that prodding the insurance company is by far the best way forward.

[roscoe]

I agree with Ewood27. Your client is unhappy and feels he has a right to hold on to money owing to you, when he clearly has no such right. However if you could show him a letter from your insurance company saying a) that you are covered and b) that they will settle your claim, your client should respond by paying what he owes you.

[incitatus]

the insurance process ha nothing to do with him. why is he pursuing it? His own insurance company (who covered his car) should be claiming from yours (because it was on your transporter). The withholding of invoices is not justified. If he withholds for a long time (3 months being the normal period) you can advise him that you will hand his outstanding payments over to a debt collection agency. This is cheaper than the courts, and willl put the fear of god up him because it totally screws his credit rating. Do consider if you want to do him this injury first though. Perhaps he has not contacted his insurer? As the claim is not du to him, many insurers will not touch his no claims or raise his premiums if this is his problem. Or were these vehicles sorned and so not requiring cover?