By Richard Renouf, Independent Flooring Consultant
There’s very little that causes more worry to a retailer than receiving a court claim from a customer. This can happen in spite of the very best customer service policies. I don’t believe ‘the customer is always right’ applies to complaints, and it was never intended that way when it was first coined to teach salespeople not to suggest a customer’s choice of pattern or product was wrong.
I hope that in your business, court documents are a rarity, but I’ve had quite a number of phone calls from retailers – including one just as I was preparing to write this article – where a claim has come in and the retailer needs help understanding the process and weighing up whether or not to settle the claim.
Here’s the first part of a brief overview of what happens. I hope you never need it, but keep this on file with my other articles just in case (and look for part 2 next month). The process of a court claim is the same, whether it’s a claim from a customer, or you’re the one seeking redress from a customer, e.g. for non-payment.
Before a claim can be raised in court, the person or business making the claim must give reasonable notice to the other party. This needs to be in writing – but email is accepted by the courts so it doesn’t need to be a hard copy letter. It must set out what the claimant wants, why this is justified, and must give a reasonable time for a response. 7 or 14 days are perfectly reasonable in today’s electronic world. The court service is accessible online and claims can be raised and paid for through the website and without the need to attend the court or obtain paper forms. The claimant must specify how much they are claiming and the brief reason(s) why and they must indicate whether they are seeking interest on the amount claimed. This might be in circumstances where the customer paid a deposit, is trying to reject the goods and claim their money back, but you feel there’s nothing wrong so you counter-claim the outstanding balance. The result is that if the customer’s claim fails, you get the Court to ensure the customer pays you. The downside of this process is that all too often when a company claims for an outstanding balance from a customer, the customer counter-claims and asks for a full refund.
The court issues a claim form to the defendant, the party from whom the claimant is seeking the money. It is worth re-assessing any complaint at this point, but you only have seven days to make your response to the court and, if appropriate, to the claimant. However, a trick worth knowing is that if you return the form acknowledging receipt of the documents you can tick a box which extends this deadline to 28 days and this is a very helpful option.
There are three possible responses to a claim that you can consider:
Firstly, you can settle the claim in full by making payment of the total amount claimed to the customer and then using the response form to tell the court you have done this. The claim will then be closed by the court and that will be the end of the matter. As long as you’ve settled in full, the claimant can’t take the matter any further.
Alternatively, you can try to settle the claim by making or offering part-payment to the claimant. If, for instance, the claim is for the full price of the goods but they are several years old, you could offer a proportionate refund, Or, if the claim is for the price plus ‘compensation’ (see last month’s article) you might offer to settle for just the product price. If the claimant tells the court they have agreed a settlement, the court will close the claim – but make sure you includes this as a condition when you negotiate with the customer, otherwise the claim could still proceed.
Finally, you can defend the claim. This will require you to briefly state why you don’t think the claimant is entitled to what they’re seeking. It might also be that you want to ‘counter-claim’, that is, to ask the court not only to dismiss their claim but to award some money to you.
All Court claims are for money. You cannot use the Court process to force someone to carry out work of any kind because this would result in the Court having to ensure the work was carried out satisfactorily. Instead, the Court will always assess how much should be paid by one party to the other so that a new contract can be entered into, with a third party if necessary, or the claimant can just walk off with the amount awarded. There is an exception to this, known as specific performance, but I doubt that this could ever apply to a furnishings purchase.
If you’ve defended the claim, the case then proceeds through the court system and in next month’s Stocklists I’ll explain what happens from here.