How I claimed £76.20 in excess charges

Between 2012 and 2018 FirstPort overcharged us for managing the estate. I have managed to recover my share of these excess management fees and you should be able to do the same. Here is an explanation of what, how and why.

Before going any further, I have to make it clear that I am not a lawyer and this is not legal advice, its just what worked for me. Your mileage may vary. I had to do this in my own personal capacity rather than as Chairman of the Residents Association because it is individual residents who are owed the money. However to help anyone doing the same I have written up a document pack with template letters; see the bottom of this post.

Formal Complaint

The first step in taking legal action is to make the right kind of threat. Simply shouting "I'm gonna sue you!" down a telephone is not an effective threat. You have to write a formal letter of complaint which lays out the facts of what has happened so far and what you want done about it, and end it with a statement along the lines of "If I do not hear from you within one month I will take legal action to recover the money".

I sent my complaint letter to Holding & Management (Solitaire) Ltd (who I will just call "Solitaire" from now on) rather than FirstPort because the Transfer Documents for our houses specify Solitaire as the people we have to pay the Variable Rentcharge to. FirstPort were merely their agents, now replaced by Daniells Harrison. When taking legal action you have to make sure you sue the organ grinder and not the monkey. I also sent it by recorded delivery so that they couldn't claim they didn't get it.

(By the way, I found that there is a "pre-action protocol" for professional negligence disputes, which said that I should allow 3 months after writing my "letter of claim" for Solitaire to investigate my complaint. This was almost certainly overkill in this case, but I followed it anyway. I don't think anyone else on the Estate will need to wait 3 months for this; the facts are the same in every case so no further investigation will be needed. The template letter in the document pack says "four weeks", which should be plenty.)

When I didn't get a reply after 3 months I started a small claim action in the County Court.

Starting Legal Action

This is the first time I've ever had to take legal action against a company. There have been a few times in the past when I've had to threaten it, but the companies in question always paid up at that point. From a company point of view defending a small claim is generally not worth it; you can't claim legal costs even if you win and merely hiring a solicitor is likely to cost more than the claim is worth. And of course they could see I was probably going to win.

If you have never done this before then "taking legal action" sounds like a lot of risk and hassle, but the "small claims track" (as it is known these days) is designed to be a simple, cheap and low-risk way to get money you are owed:

You don't need a solicitor, either in theory or in practice. In the unlikely event that the case actually goes to court its just you, the other party, and a very junior judge. The concern is with getting the facts straight and making the right decision, not on any fine points of law or procedure. Stick to the facts, act in good faith, and you will be fine.
If the other side decides to use a solicitor then they can't claim legal costs even if you lose. The most they can claim is personal loss of earnings and travel costs for attending the hearing.

Actually kicking off legal action is quite straightforward. You have to get an account on the UK government website and fill in an online Claim Form to say you you are, who you are suing, how much for, and why. The form gives you comparatively little space to say what the case is about, so you then have to write out a more detailed "Particulars of Claim" (basically the same thing you wrote in the original complaint letter) and serve it on the defendant. The term "serve" comes up quite a lot in this process: for small claims it means "post by recorded delivery".

Here is what I wrote on my Claim Form. If Solitaire won't pay up and you decide to take legal action then you can copy and paste this into your Claim Form.

My house is a freehold property on the Prices Lodge Estate in Fareham. A variable rentcharge covers the cost of maintaining adjoining land owned by the defendant. Part of this is a management fee paid to an agent. An agreement on fees and services was negotiated in 2012. Since then the defendant's agent has charged fees above the agreement, invented a new Account Preparation Fee and not met regularly with the Residents Association as promised. Although another agent has since been appointed the defendant has refused to return the excess fees charged since 2012. I am claiming the share of these fees paid by my household, plus interest calculated at 8% per year.

When you fill in the Claim Form you need to say how much you are claiming. If you have owned a property on the Estate since before July 2012 then you are claiming £76.20. If you moved in since then you will be claiming less. The document pack includes a spreadsheet showing the amount each year, so you can work out how much. The 8% per year interest is a statutory rate, so you are automatically entitled to it. You have to pay £25 up front to start your claim, but this gets added on to the amount you are claiming, so I was claiming a total of £101.20.

When you submit the Claim Form a copy will be sent to both you and Solitaire. When you get your copy do two things:

Make a note of the Claim Number. Make sure that everything you send anyone from now on has that number written somewhere.
Send a copy of the Particulars of Claim (see the document pack) to Solitaire by recorded delivery

Once Solitaire get your Particulars of Claim they have two weeks to respond. They can do one of three things:

Agree to pay you the money you are claiming.
Write a defence, which is an explanation of why they don't think they owe you anything.
A combination of the two: agree they owe some money, but write a defence explaining why they don't owe the rest.

Although Solitaire was the defending party they are just a holding company that exists only to own bits of land. They have directors but no employees, so when they want anything done they appoint agents to do it for them. Accordingly they handed off the defence of my claim to FirstPort, who in turn hired solicitors to represent them.

The Claim is Defended

At this point FirstPort did something which looks to me like a dirty trick; they hired solicitors up in Liverpool. These solicitors then sent me a written defence and the court sent me the Directions Questionnaire. This Questionnaire takes a bit of explaining.

When a Claim Form is submitted over the Internet it gets assigned to the "Northampton County Court Business Center". This isn't a court itself; it just handles the administration. Part of the administration is assigning the case to an actual court, which is what the Directions Questionnaire is about. I asked that it be assigned to the Portsmouth Court (number 302). I wrote:

Portsmouth 302. Closest to Fareham. Defendant visits the estate regularly, so attendance not a burden to them.

Meanwhile on their form the solicitors wrote that they wanted the case assigned to their local court up in Liverpool. This is why I believe that FirstPort were playing a dirty trick: whichever court was chosen one party or the other would have to make a 500 mile round trip, at a cost much higher than the amount in dispute, and then the losing side would have to pay for it. As FirstPort are based in Luton I can see no reason to choose a solicitor in Liverpool other than to up the ante. Surely there must be solicitors who can handle a claim like this south of the Mersey.

(Side note: if this had gone to court and I had lost then I would have argued that Solitaire and FirstPort behaved unreasonably in appointing these solicitors, and hence I should not have to pay the resulting costs. I don't know if that would have worked, but I believe that judges take a dim view of people who play silly games).

The other thing the Directions Questionnaire asked is whether I would like the claim to go to mediation. I ticked the box for Yes on this because you should always try to settle out of court if possible, and I wanted to suggest offering a reduced sum to the entire estate without forcing all the residents to make a claim first, thereby making life simpler for everyone. I wasn't optimistic about the latter, but you never know.

The defence sent by FirstPort's solicitors denied that there was any agreement between FirstPort and the Residents Association because the Residents Association had never accepted the proposal back in 2012. I have to admit this came as a surprise to me, but when I checked my old emails I discovered that they were correct. I am embarrassed about this; its a simple thing that just got forgotten. However I could still argue that both sides had indicated acceptance by their conduct since 2012 (you can find the details of this argument in the document pack). So while this was not good, it didn't destroy my case. They also claimed that their fee increases were reasonable and that the Accounts Preparation Fee was something they were always entitled to charge.

The First Offer to Settle

Shortly after getting the defence I got a separate letter from Adam Fotiou of FirstPort offering to settle the case for £65 (i.e. £40 plus the £25 court fee), but saying that if any other residents made the same claim then they would be defended at trial. My reply made the following points:

I rejected their claim that there was no agreement, arguing that both sides had indicated acceptance by conduct.
I quoted an email from Jessica Wang of Firstport (see the document pack) as evidence that the Accounts Preparation Fee was merely a disguised increase in the management fee.
I pointed out that a fee increase is not reasonable merely because it is small; there has to be a reason for it.
I argued that the increases had to be considered against the £4,800 they actually charged in 2012. This helped make the status of the agreement moot; whether it existed or not, the fee increases over 2012 were the same.
I said that this was a test case for the rest of the estate and they could expect more claims, so if they were determined to defend these claims in court then they might as well start with me. Hence I was rejecting their offer.

The Second Offer to Settle

After I rejected their first offer FirstPort's solicitors sent me a an offer to settle in full, but without admitting that I was in the right. They said that claims from other residents will be dealt with on a case-by-case basis.

In theory I could have rejected this offer too, and forced it to court. However the court could only award me the money I had already been offered, and judges take a very dim view of people wasting their time. It is quite possible that I would have won the case but then had to pay the other side's train fare from Liverpool and maybe an overnight hotel and something for their time. So I agreed to settle the case and have now banked the cheque.

While FirstPort have not admitted anything they have shown by their actions that they are not prepared to defend their position in court.

The Document Pack

Here are links to the documents you can use to claim your share of the excess payments back from FirstPort. They are not the documents I originally sent; I have updated them with responses to the claims made in FirstPort's defence document.

Solitaire's address is: Holding & Management (Solitaire) Limited, The Asticus Building, 21 Palmer Street, London, England, SW1H 0AD.

The government website for starting a small claim is here. You can also print out the form and fill it in by hand if you prefer.

When you write to them, keep copies of everything and send everything by recorded delivery. If they inform you that they have appointed solicitors then write to those solicitors from then on. (Actually I believe that the recorded delivery is not strictly necessary; when they served documents on me it was by ordinary first class post. But I think its a good idea to make sure nothing goes astray and you can prove they got it).

Complaint letter. This is a Word document so you can edit it. Add your name and address and the date where shown. Read it carefully and change anything that does not apply to you. Send it by recorded delivery to Solitaire with the rest of the pack.
Particulars of claim. This is also a Word document. Read it carefully and change anything that does not apply to you. Send with the complaint letter, and if you have to start a legal case then put your Claim Number on it and send it again once you get your copy of the Claim Form.
Email from Paul Atkinson. This is a PDF document so it can't be edited. Send it with the Complaint letter and Particulars of Claim. It is evidence of the terms of the 2012 agreement.
Email from Jessica Wang. This is also a PDF document. Send it with the Complaint letter and Particulars of Claim. It is evidence that the Account Preparation Fee was actually a disguised increase in the management fee.
Management charges since 2012. This is also a PDF. Send it with the Complaint letter and Particulars of Claim. It lays out the calculation that arrives at the £76.20 you are claiming. If you bought your house since June 2012 then you will need to use this to figure out which years you are claiming for and hence how much your total claim is.

You can add your email address to the complaint letter if you like; it saves on postage and can speed things up if the two sides can discuss a possible settlement by email. However when you need to "serve" a document you have to post it, even if you have already emailed it.

If you decide you want to claim this money then start by sending the complaint letter with everything else. I don't know exactly what will happen next; if Solitaire have any sense they will offer to pay in full without further argument. However they may decide to stall and see if you make good on the threat of court action, or offer you a smaller amount. I can't tell you what to do next; I can only tell you what worked for me. In this kind of situation companies often bluff, even when they know they have an empty hand, because they know that many people are afraid of going to law. I have always found that calling their bluff is the best policy.