Q: I recently purchased a house. Two weeks after completion, my lawyer contacted me to tell me that they had made a mistake in their calculations and I thank them ￡ 3500. I told them I did not have that kind of money immediately and they would pay in a few months time. I have now received a letter telling me that they take legal action against me to the outstanding balance on my account, including bankruptcy proceedings to recover. This is clearly a mistake by them if all costs must be settled before completion. I even questioned the amount before completion, but was told it was good. My question is what is my best course of action? Since they are debt, but I feel like the victim and get stressed with their harassment tactics in relation to legal proceedings.
If you threaten a complaint to the the Solicitors Regulation Authority then usually that will bring some more conciliatory noises from your solicitor. Unless they have lots of evidence to prove that you knew perfectly well all along that their figures were wrong and you were in effect laughing at them the SRA would probably tell the solicitor to accept instalments and might even require a fee reduction.
Most solicictors would be daft to try to prove that you were stringing them along – and there's nothing in your posts to suggest a hint of this. The SRA would take a VERY dim view of a solicitor who tried this unless he had cast iron evidence. I definitely think you should press your offer of instalments and tell the solicitor you will take him to the SRA if he doesn't agree something reasonable with you.
As a conveyancing solicitor I believe the information given in the post to be useful but I accept no liability except to fee-paying clients
The best course of action is to pay up.
However if you truly can't pay now then pay in monthly instalments.
Write to them via royal mail and use recorded delivery so you have proof of posting. Keep all copies of everything.
In the letter include a copy of any communication i.e. email or letter that you had querying their amount plus a copy of your previous letter. State clearly that unfortunately you don't have all the money immediately to hand and you wish to pay in monthly instalments of £xxx. ( Make sure your monthly instalments are high enough so you pay off the balance within 6-12 months. ) Also state in the letter that you see no reason for them to threaten you with court action at this stage as it is clear that they made a mistake in their billing which you have provided proof that you queried. Also state if they threaten you again with legal action you will have no choice but to refer the matter to the Legal Complaints Service. (http://www.legalcomplaints.org.uk) End with you have included a cheque for your first months instalment of £xxx and put the cheque number in the letter. Remember to include the cheque.
If you they do threaten you again then use the solicitor's complains procedure (use recorded delivery or fax for all correspondence) then complain to the LCS. If they take you to court which will be the small claims court, you will be able to show that you acted reasonably.
By the way if you miss an instalment without warning or for any reason they will take you to court to make you honour the agreement. If they threaten to add interest which they will try to, then you have to use the complaints procedure.
I agree wholeheartedly. There is no loss scenario here for the OP. In fact OP has had the benefit of holding on to the money. I think it would be morally bankrupt not to repay it immediately. To suggest installments smacks of taking advantage of the situation.
This would have been my advice too until the OP said what the error was.
There is now a separate regulatory body for investigating solicitors so the conflict of interest the Law Society had in investigating and also protecting its own no longer exists.
However, their attitude leaves little to be desired. The threat of court action normally only occurs if you dont respond to them. I'm not even sure they could bankrupt you on that amount as it would be handled through the small claims court and a judge would typically arrange a payment plan. (although the legal eagles here are much better placed to know what would happen as a worst case).
You must communicate with them and keep copies of your communications and their responses. If it does end up in court, the judge will want to see what efforts you have made to arrange payment and how flexible the solicitor has or hasnt been. Especially considering that it was a clerical error.
Where did OP say he/she would not pay? All of this should have been settled before the solicitor released any money. It's not reasonable to demand 3.5K immediately and make threats of legal action – who has that kind of money spare.
If I was OP, I would seek professional advice from another solicitor – hopefully one that knows what they are doing this time. I would hope that this sort of error would be covered by the solicitor?s indemnity insurance, but no doubt they will have a get out clause somewhere in the fine print.
Basically, there was an additional charge on my previous house ￡3500. However, when the solicitors put it through, they calculated it at ￡35! Therefore they paid the ￡3500 debt off but only charged me ￡35! I have all the paperwork to prove it. They were handling my sale and purchase, but I, as well as them, both know where the miscalculation took place.
If so, can you compare it against the completion statement?
The more I think about it, the more I think it's a huge sum of money for them to miscalculate – unless they were handling a sale as well as a purchase and simply forgot to charge you.
When you know more post again I'm sure someone will have good advice.