If you are on the receiving end of a legal claim, sitting on your hands is simply not an option and you should seek advice straight away. In a case on point reviewed by Jonathan Leach, a property company that signally failed to engage in court proceedings was hit with a very substantial bill.
After purchasing a commercial property for about £13 million, the company engaged project managers and architects to assist in obtaining planning consent to redevelop the site for housing. The local authority made positive noises but, in the event, no formal application for planning consent was made prior to the company selling the property at a considerable profit.
After the project managers and architects sued for fees they claimed to be owed for their work on the project, the company lodged a defence and counterclaim, alleging that they had performed poorly. Thereafter, however, the company failed to abide by court directions which were designed to progress the matter. The company having ceased to engage in the proceedings, its defence was struck out.
Consequently, all that the project managers and architects were required to do was to prove their contractual claims at an uncontested hearing. The High Court found that they had succeeded hands down in doing so. The project managers were awarded £150,000 and the architects £295,000. Interest and VAT were added to those sums. The Court gave directions for a further hearing, at which the project managers and architects would seek substantial legal costs orders against the company and its sole shareholder.