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Ben Jones
Ben Jones, UK Lawyer
Category: UK Law
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I have a non-trading company which was incorporated purely

Customer Question

Hi, I have a non-trading company which was incorporated purely to protect the brand name of the same name which is managed under license by another trading entity. I retained a consultant to work on the brand whilst the brand management company was being structured/incorporated - she was paid £16,000 for 30 days work​ which​ was a complete disaster and ​she ​clearly over-stated her qualifications. I advised her in writing that her work was sub-standard to say the least and that I had to pay others to complete her work. I relieved her of her services and refused to pay the further invoices rendered for the rubbish work she supplied - the sub-standard ​work ​was beyond belief.
To cut a long story short her solicitors have litigated against the non-trading company (one of the main issues I had with her was that she could not understand the difference between a brand name (IP) and a legal entity. So her solicitors have just gone along with what she told them and now 12 months later and 8 days before trial have said that they have realised that they are suing a non-trading company with no assets and not even a bank account. My solicitor (whom is clearly rubbing his hands together and has not made any genuine attempt to try and settle this matter) has repeated throughout that it is incumbent on them to check the ​status of the ​legal entity​ they are litigating against. ​​Equally, I am being done a huge disservice as a non-trading entity cannot claim a counter-claim/losses as it is not trading.​
​D​espite my saying that I am not comfortable with not setting the matter straight​ - my solicitor is, in my opinion, dragging this out, without thinking that he might need a plan B - what is good for the goose is good for the gander - here we have a non-trading company that cannot seek to counter claim and a claimant saying that they are continuing proceedings against a non-trading company.
In a nutshell, her solicitors say as it is not a trading company it has not incurred losses and therefore it has no counter claim for losses (which have been incurred by my management company on behalf of the brand)​ and ​even if I dropped the counter claim (which in my opinion follows that same logic if it is not trading then how can it incur losses - tried telling my solicitor that who just keeps telling me it is to my advantage that they are suing the wrong company).
My defence is that I am not paying her for defective work irrespective of whom she is suing.
Even if we were the put the counter claim​/losses​ to one side - how can the other sides solicitors claim that as it is non-trading it has no losses incurred when my argument is that by applying that logic they have no claim as a non-trading company (which did not have a contract with the consultant) has no liabilities​ either​​, the company has no assets, no bank account and how on earth can a judgement (as I minded to just say do as you will) be enforced even if awarded (which if I just decide I have had enough of this madness will happen (she might be stupid enough to not realise when she is being exploited but I am not).
​I would imagine that the judge will wonder what on earth is before him - a claimant making a claim against a non-trading company, with a firm of solicitors knowing this but still continuing to going to trial with out making a Part 18 application for further information and refusing a discontinuance - and to boot she has blatantly lied in her witness statement denying that email exchanges ever took place with my telling her how rubbish she is and that I only ever told her she was great - yet my disclosure and witness statement contained all the contemporaneous emails stating how rubbish she is.
​In summary, do I simply call her bluff and say do your worse - it will get them nowhere with my non-trading company with an unenforceable judgement against it - so apart from anything else I am stumped as to the motivation - other than to clearly exploit their client as they do not care whether she wins or not - either way they still have to be paid.​
​What is your view?
​Many thanks.​​
Submitted: 2 years ago.
Category: UK Law
Expert:  Alex J. replied 2 years ago.
Thank you for your question and welcome.
My name is ***** ***** I will assist you.
How is the company funding the legal fees for this?
Is your Potential counter claim for failure to provide the service with care and skill?
I would note as long as the company is not insolvent if the judge awards a judgment against it then it is the claimants problem that it has no assets to enforce against.
Kind regards