Potential Dangers in Issuing a Statutory Demand

The outcome of a recent court case has demonstrated that if the party serving a Statutory Demand is deemed to have exhibited inappropriate or unreasonable conduct in so doing and the demand is successfully set aside, then that party will be required to cover the legal costs of the other side.

In the case in question, a Firm of Solicitors had served a Statutory Demand on a former client against whom they had obtained a money judgement. They were therefore entitled to serve the Statutory Demand but did so in the knowledge that the former client was already in the process of seeking permission to appeal that judgement. The Court found that the Solicitors had behaved unreasonably in serving the Statutory Demand and also acted in the knowledge that serving the demand would escalate costs. The former client was therefore entitled to the costs of the application to have the Statutory Demand successfully set aside.

If your company has received a Statutory Demand or is experiencing financial difficulty, then for increased peace of mind, now may be the time to seek professional advice to ensure the most beneficial outcome for all of the stakeholders. An initial consultation with EWS is free of charge. Contact us.