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Escalate, Commercial Dispute Resolution for SMEs

PKF Francis Clark has launched a new service for clients which deals with the difficult area of commercial dispute resolution. The new process is called ‘Escalate’ and covers the full range of commercial disputes – including bad debt, contractual and negligence, all of which SME businesses typically face.

Escalate:

  • Removes the clients financial risk in resolving the dispute – nothing is paid unless monies are recovered, and there is full protection against adverse costs
  • Uses the talents of accountants and lawyers to focus on achieving a prompt settlement
  • Charges a fixed fee based on successful recovery

Escalate is a two-stage process. Firstly, the service will focus on a negotiated settlement on behalf of the claimant using licenced corporate recovery specialists with a track record of rapidly recovering assets. They encourage the defendant to settle quickly in the client’s favour without the need for litigation. The process allows a maximum of three months for this negotiation.

If the defendant is unwilling to settle in this timeframe, solicitors acting on a fully conditional basis will begin preparing for litigation with the back-up of the adverse costs insurance.

Escalate can tackle cases going back up to three years and is best suited for claims of £35,000 or more.

CASE STUDIES:

Software company: Intellectual Property infringement - £350,000

A software company entered into a joint venture with a large property management consultancy to allow its application to be commercially exploited in return for a share of the revenue flow. The software company believed that the consultancy firm had generated revenue from the product and requested details but received none.

Solicitors were instructed but no progress was made. The next step was for the claimant to seek full disclosure via the courts and then issue proceedings, but it did not have the funds for this. With its solicitors’ approval, the case was moved to Escalate.

There was no real movement from the defendant during the Path A mediation process, just a paltry £40,000 settlement offer which was rejected because the defendant would still not provide the information needed. Proceedings were issued for full disclosure which caused the defendant to admit owing £300,000 – subsequently increased to £350,000 which has now been paid.

Manufacturing Business: Defective Product - £3 million

The client had purchased products from a large supplier for use on its customers’ floors. The product was defective, which resulted in the customers’ floors failing after a short period. The client was faced with claims from its customers in the region of £3 million.

The client did not have the financial resources to be able to pursue such a significant claim against a large multi-national company. The defendant knew this and delayed matters to force the claimant to incur further costs so it had no option but to drop the claim or settle it quickly.

After spending a year failing to make any headway the client was introduced to Escalate. Once engaged we quickly moved to issue and serve proceedings.

The matter went to mediation and c£1m was offered but this is not enough. The hearing is set for February 2019 although we suspect it will settle well in advance of that to avoid costs.

Public Sector: Insurance Policy Dispute

An organisation provided a service to people in the care of a local authority. It took out an insurance policy to cover litigation costs in circumstances where there was a significant threat to the viability of the company.

When the local authority threatened to withdraw all its operations a process of litigation, paid for by the insurance policy, was started.

Without notice and shortly before trial, the insurer changed its stance and withdrew funding, resulting in an adverse court decision that caused the client a significant loss. The client wished to challenge both the insurer and its solicitor who withdrew services when the insurer stopped paying.

Escalate has arranged a suitable platform upon which to pursue its claim, targetting the insurer and the solicitor in circumstances where the client would otherwise have had no opportunity of making a recovery. There are now 2 separate cases being litigated: a contractual dispute claiming £1.5m and professional negligence for £400k.

Insolvency: Pursuit of Directors

Escalate has been employed by an insolvency practitioner who is the liquidator of a company.

The company has no liquid assets, but it has several claims against the former directors who received significant sums from the company prior to liquidation, to the detriment of the creditors.

The lack of funds would typically prevent the liquidator from pursuing any actions to recover assets. However, Escalate has overcome this obstacle has achieved a recovery of more than £150,000 and a real return to creditors in the insolvency.

Entertainment Business: Contract Dispute - £35,000

A well-known music events management business entered into a contract with a local promoter regarding ticket sales and promotion at a music festival but there was a fundamental failure on the part of the promoter to execute his contractual obligations, which resulted in the festival being cancelled.

Swift adoption of Escalate meant that the parties engaged in an early meeting to air their views and table their claims and counterclaims. During the course of this meeting, it became apparent that the promoter was about to go bust. Whilst this meant that a recovery was not possible, we were able to prevent the client wasting money on a fruitless pursuit of damages.

Talk to our Escalate Team

PKF Francis Clark is leading the service delivery and would be very happy to discuss any specific questions that you may have in relation to the Escalate service.

Stephen Hobson - Escalate

Stephen Hobson

Business Recovery Partner

P: 0800 832 1875 (freephone)
M: 07979 507954
E: stephen.hobson@pkf-francisclark.co.uk

Stephen Hobson - Escalate

Luci Coleman

Business Recovery Partner

P: 0800 832 1875 (freephone)
M: 07730 096776
E: lucinda.coleman@pkf-francisclark.co.uk

Law Society Excellence Awards
FC Escalate award
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