Client paid

Now threatening legal action

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I posted a couple of weeks ago where the client was not paying but astonishingly paid some of the amount after putting them under pressure and now 1K is outstanding

Now received an email saying they are considering legal action due to the "errors".  

I am trying to understand on what basis as we had acted reasonably in the extremely difficult circumstances and the client didn't incur any losses.  The only losses perhaps was the client had pay little extra to her accountants for additional work but that was due to her being so disorganised to the highest degree.

Its more of a vendetta now as she just seems so upset and intent trying to get revenge somehow and perhaps trying not to pay the 1K.   Actually I am not that bothered by 1K as just want her off my case.  Though I am expecting her to complain to my accountancy body too.

If she took it further she would need to claim breach of contract and prove losses.  I don't see the validity of the claim as I have suffucient evidence but would the insurers be bothered over a small amount and just pay out ?  I have contacted my insurers but just waiting for them to come back.

Replies (50)

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By ireallyshouldknowthisbut
02nd Nov 2021 14:20

Let them consider away

I would assume it was a negotiation tactic. No-one goes to court for £1k.

Either (1) you push for payment and refer any claim to your insurers (mind your premium, you might want to just settle yourself)

or (2) your accept the negotiation and offer to settle all claims for a credit note and move on.

I'd be tempted to do the latter, perhaps offering £500 initially.

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Replying to ireallyshouldknowthisbut:
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By taxwizard
02nd Nov 2021 14:27

She won't even negotiate which is the problem

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By ireallyshouldknowthisbut
02nd Nov 2021 14:50

Well clearly they are negotiating by emailing you with this threat. The only real outcome of legal action is financial.

Do you not have any legal clients you can speak to? A "without prejudice" offer to settle is normally very sensible and if you do end up in court shows you are being reasonable.

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Replying to ireallyshouldknowthisbut:
By Moonbeam
03rd Nov 2021 14:00

But he hasn't apparently done anything wrong!

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Replying to ireallyshouldknowthisbut:
By Moonbeam
03rd Nov 2021 14:00

But he hasn't apparently done anything wrong!

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Replying to taxwizard:
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By SXGuy
03rd Nov 2021 06:23

It doesn't matter if she won't negotiate. The fact that you tried to and she wouldn't acknowledge it would be enough to get the back up of any judge.

They all like to see people try to mediate before court being the last resort.

She could quite easily be in breach of pre action protocol by not entertaining the idea of mediation.

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Replying to taxwizard:
John Hextall
By John Hextall
05th Nov 2021 11:03

She is negotiating by threatening legal action. But if that is the limit of her negotiations, you are left with option 1, to pursue the debt in the normal way.

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Replying to ireallyshouldknowthisbut:
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By CMPACDGDB
05th Nov 2021 18:18

Actually people go to court for much less than £1k: it's called the Small Claims Court for that reason!

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By Truthsayer
02nd Nov 2021 14:09

'would the insurers be bothered over a small amount and just pay out ?'

Is that your question? Why ask us? Just wait and see what the insurer does.

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By taxwizard
02nd Nov 2021 14:20

I have no experience dealing with insurers and perhaps some fellow members have been through this before hence wanted to know the likelihood this happening. I wouldn't want the insurers pay out to this leech.

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Replying to Truthsayer:
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By Leywood
02nd Nov 2021 14:45

Be patient, wait for the insurers.

They might help put forward a counter claim type holding email that might see her off. I had one of those, went silent when I laid down the facts in more legal-ese.

Once you have their response, depending on what it is then consider, if she will not negotiate, then go after the £1k.

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Replying to Leywood:
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By taxwizard
03rd Nov 2021 11:34

Its a difficult one to know what direction to take in respect of legal action as the amount in question is small. Part of me wants to negotiate something even if I lose out but then another part doesn't want this extremely narrow minded person gleefully thinking she has been proved right say if the insurers pay out or forego the £1K. She is adamant that I have committed a terrible sin and needs to pay for it.

The problem is her accountants are adding fuel to the fire and think they had recommended to her that she takes legal action without knowing all the facts and circumstances. Though I am surprised they did not recommend email to my accountancy body.

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Replying to taxwizard:
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By bernard michael
03rd Nov 2021 11:43

taxwizard wrote:

Its a difficult one to know what direction to take in respect of legal action as the amount in question is small. Part of me wants to negotiate something even if I lose out but then another part doesn't want this extremely narrow minded person gleefully thinking she has been proved right say if the insurers pay out or forego the £1K. She is adamant that I have committed a terrible sin and needs to pay for it.

The problem is her accountants are adding fuel to the fire and think they had recommended to her that she takes legal action without knowing all the facts and circumstances. Though I am surprised they did not recommend email to my accountancy body.


Will the insurers actually pay the £1k ?? Don't you have an excess in the policy ??
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Replying to taxwizard:
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By Arcadia
05th Nov 2021 14:55

If you have evidence the new accountants have criticised you, or recommended legal action, then file a complaint against them. They are unlikely to be competent to provide legal advice.

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By Paul Crowley
02nd Nov 2021 14:35

Wait out for the formal claim
It may never happen

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By Winnie Wiggleroom
03rd Nov 2021 08:48

Its worth waiting to speak to the insurers, we had a case a number of years ago where the idiot ex client counter sued for exactly the same amount they owed us after we sued them, the insurer told us to agree to drop our claim if they would do the same and they (the insurers) would pay the debt owed to us, which was approx £1500, so in the end we were not out of pocket apart from technically having a claim against us

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Replying to Winnie Wiggleroom:
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By taxwizard
03rd Nov 2021 10:13

I would hate to think the insurers would pay out to someone who simply is set up on revenge and one that is becoming more of a ego battle. If the insurers pay out then premiums will go up.

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By bernard michael
03rd Nov 2021 08:49

I've generally found that if they say the are considering legal action they seldom carry out the threat. It's trying to provoke a reaction from you and perhaps a dialogue that will gain her some benefit.

Just ignore her

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By I'msorryIhaven'taclue
03rd Nov 2021 08:51

You mention breach of contract in your OP, and the client proving losses. I'd say any action would be more likely to arrive in the form of a negligence claim (not so awful as it sounds; more or less an alleged failure on your part to perform your contractual obligations to a reasonably expected standard). Such a negligence claim would still require your ex-client to demonstrate resultant loss(es); but would potentially kill two birds as it might also get you into hot water with your professional body.

Sounds as if you have a vindictive Karen on your hands. IMHO you've shot yourself in the foot by involving your insurers, given that any claim will be capped at the amount of losses suffered by the client (which, from what you say, is likely to be minimal and might well be covered by the £1k of retention money she is holding). On top of which, you should be able to mitigate any claim by arguing your client was disorganised, and that that was a contributory factor (so that any eventual court is able to apportion liability between the parties).

In your shoes I'd inform your insurers the matter was a storm in a teacup and has blown over; then deal with it yourself. Deal with it by putting your foot on the ball and doing nothing, other than perhaps respond to her next move (whenever it comes and whatever it's about) by asking your ex-client to quantify and present you with a list of her alleged losses.

As others have indicated, for all the huff and puff she's unlikely to take the matter to court. Not while she has your £1k, as she's likely to emerge with less than £1k if her resultant loss is minimal (and end up having to pay you the difference). Just let it blow over, then put a no collect / no fee debt collector on her case when the dust has settled in a year or two's time (for payback!)

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Replying to I'msorryIhaven'taclue:
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By taxwizard
03rd Nov 2021 10:29

I have always been told by my accountancy body to inform insurers at the first instance of any potential claim. Though for such a small claim no point engaging solicitors so they may just pay out which just be wrong

Yes its going to be minimal claim. Client was making losses so any so called errors would still cause the client a loss

It is inevitable they would complain to my accountancy body but I have the evidence to back up what I did was reasonable in the worst set of circumstances imaginable.

It also seems she is arguing that the fees were too high in the first place and trying to claw some of this money back. What happens if she sends a legal notice do I find my own solicitor or inform the insurers.

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By Paul Crowley
03rd Nov 2021 12:14

Deal with things as they happen
Always take a week to respond as it gives you time to burn the anger out
As you have informed the PII people you need to pass the email received and proposed reply past them first
Forget thinking about what ifs
You have already wasted probably 2K of time thinking about this

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Replying to taxwizard:
AS
By AS
03rd Nov 2021 12:32

A complaint to your accountancy body will be very painful as you will have to spend many hours defending yourself. I have had this happen once by a vindictive client and the ICAEW's initial stance was that I was guilty. I had to produce a massive amount of evidence. It took them months to go through everything and in the end decided that I was in the clear.

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By taxwizard
03rd Nov 2021 16:18

Yes that is one concern as she is intent on doing damage one way or the other. If she feels she cannot succeed legally then she will look at other means.

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By I'msorryIhaven'taclue
03rd Nov 2021 18:08

What AS is saying is spot on. This is a client intent on inflicting maximum damage.

I still say it's not too late to withdraw the matter from your insurers, and take the minimal risk that she will follow through onto your own shoulders. The quantum of fees is too nebulous a matter for any plaintiff to have any realistic hope of succeeding with in court. So long as you let the matter of the unpaid £1k of fees lie, then your opponent is all the less likely to pursue a monetary claim. At the end of the day, the first £1k of awards / costs would be set against that contractual £1k balance.

Go for the stand-off. Your entitled ex-client will eventually move on to hassling somebody else - their carpet fitter, mechanic, or dentist perhaps - and work out for herself that she's better off pocketing the £1k and leaving the matter as it is. Risk versus reward will enter into the equatioin, for her.

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Replying to I'msorryIhaven'taclue:
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By taxwizard
03rd Nov 2021 18:37

Yes what you say makes sense.

I have received an email where she has copied her solicitors wanting to claim for her accountants costs for identifying errors and trying to correct the accounts. I am expecting the solicitor letter so will have to respond in due course and therefore will have to engage a solicitor.

I am waiting for the insurers to come back for over a week now.

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Replying to taxwizard:
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By bernard michael
04th Nov 2021 08:58

taxwizard wrote:

Yes what you say makes sense.

I have received an email where she has copied her solicitors wanting to claim for her accountants costs for identifying errors and trying to correct the accounts. I am expecting the solicitor letter so will have to respond in due course and therefore will have to engage a solicitor.

I am waiting for the insurers to come back for over a week now.


It sounds like she's attention seeking. By paying most of your fee she has seriously weakened her case if she goes to court claiming "your errors"
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By Paul Crowley
04th Nov 2021 13:26

The insurers will always take their time

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By Moonbeam
03rd Nov 2021 13:52

I get legal advice from Vantage when I need to. I find insurers worse than useless when being asked for advice etc.
But let's get commercial here. You've done your utmost with a difficult client, and presumably could write reams about why it was so difficult if you ever receive a summons. And she won't be bothered to present a convincing case to the judge, so you'll win, if it gets to a hearing.
Don't allow her to bother you. I've been to around 5 small claims hearings, and I know the drill (I was suing the client, not the other way around.) Judges see a high proportion of accountants suing ex clients for fees and if you present your case well, as you surely will just compared to your ex client, he/she will have a soft spot for you even before you finish your counter argument.
Don't let this person rattle you in any way. As long as you keep answering summonses, and turn up in court if necessary she won't have a leg to stand on and you can counter sue while you're at it.
But I suspect she's all smoke and mirrors anyway.

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Replying to Moonbeam:
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By taxwizard
03rd Nov 2021 16:16

Wow you seem an expert - this is my first one.. God these are so stressful dealing with a volatile and unpredictable clients. She seems to be obsessed by me and blaming me for everything.

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By Moonbeam
03rd Nov 2021 17:32

I'm becoming an expert in avoiding difficult clients like this, rather than in legal matters. It took me far too long to understand that if client gets difficult and won't play ball, it's much better to part on reasonably friendly terms early on rather than continue with someone I won't want to work with.
Unfortunately that means that at present my stable is rather empty, and there is another client on the precipice of being given the order of the boot. But once he's gone, I will have a good quality lot of people and if I can control myself enough I will just take on good clients rather than the difficult ones from now on.
I have wasted so much time with the no hope cases!

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Replying to Moonbeam:
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By taxwizard
03rd Nov 2021 18:41

I agree that comes from experience identifying clients that may cause trouble, I have got better but this demon client came from a good source hence took this on . One bad client can cause so much trouble and take you away from further income earning opportunities so there is a double loss let alone the stress.

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By Moonbeam
03rd Nov 2021 18:47

You are not to blame. However I'd be interested to know if you ever get a letter from her solicitor, as it will cost her money, which she doesn't like being parted with. And don't forget that if she doesn't list out clearly what you apparently did wrong, she's wasting her time.
And you shouldn't need a solicitor for £1k. You are perfectly capable of defending yourself without paying someone else to do it for you.
We are all rooting for you anyway, as we've all had clients like this.
One day you will look back and laugh - hopefully sooner rather than later.

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Replying to Moonbeam:
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By taxwizard
04th Nov 2021 10:32

Many Thanks for the encouragement. Much appreciated this is is why accounting web is so fantastic. Actually she may countersue for more.

She may engage a Solicitor in the hope if she wins I will be liable for the fees. She is so bitter and wouldn't put anything past her

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By bernard michael
04th Nov 2021 08:55

taxwizard wrote:

Wow you seem an expert - this is my first one.. God these are so stressful dealing with a volatile and unpredictable clients. She seems to be obsessed by me and blaming me for everything.


Are you sure you're not married to her??
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Replying to bernard michael:
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By taxwizard
04th Nov 2021 11:34

Very funny - She is anyone worst nightmare. Hell have no fury than a women scorned !

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By Dib
04th Nov 2021 13:26

Tut, tut Taxwizard. "Heav'n has no rage, like love to hatred turn'd, nor Hell a fury like a woman scorn'd" is how the quote should go. :o)

And it is about love!

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By Tax Dragon
04th Nov 2021 09:40

I'm missing something here.

She owes you £1,000-odd. It's you that should be taking her to court if you want payment. The idea that she can take you to court to avoid paying is... is nonsensical, isn't it? If she doesn't want to pay, all she has to to is say "look at me, not paying" and see what you do about it. (If instead she is making a claim, it's not for money she hasn't paid you.)

Or have I completely missed the point?

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By taxwizard
04th Nov 2021 11:35

If I take her to court then she would easily try to countersue. Then we are in murky waters and just be more time consuming.

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By Tax Dragon
04th Nov 2021 11:46

I was lost in who was claiming what. They way I read the thread (well, the bits I read), there seemed to be some conflation between/confusion over the small amount at stake (the £1,000?) and her legal action. If she's suing, it can't be over the amount she hasn't paid. If you're not suing, she can't countersue.

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By taxwizard
04th Nov 2021 13:14

I don't know how much she is suing for. Depends on the losses she feels she has incurred. I am reluctant to sue even though I have a good case against her in case she countersues.

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By Tax Dragon
04th Nov 2021 14:41

OK, maybe it wasn't you conflating her threatened action, the £1,000 unpaid fee and the question of whether the insurers would pay (the?) £1,000. But those things did become muddled somewhere along the way. At least, it seemed so to me. (Though could that be the result of reading a thread cold? This format does not assist the cold thread reader. It might never have been in the hot writers' minds.)

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By ireallyshouldknowthisbut
04th Nov 2021 10:09

In all of this is sounds like a mountain/molehill scenario.

Let the client run up costs if they like with a solicitor. Its up to them, but I would make a "without prejudice" type offer to settle along the lines of "We believe all errors identified are a result of your poor record keeping, not our poor workman ship, and we pointed out to you in our letter of the XYZ, our emails of the XXX and your phone call to you on the XXX all the XXXing holes anyhow. Per our T&C's this is your flipping problem, and costs to put right fall on you, not us. Therefore the full sum is due/you offer a small discount. Should you not settle up and continue to muck us about then we will be charging YOU time and costs for our time + solicitors time ongoing, again per our T&C's etc etc etc.

What you really really don't want to do is end up paying your solicitor to debate with their solicitor. You will have spend £1k before you have blinked.

Certainly don't get involved in a "blow by blow" account. Moreover they need to give you the chance to correct anything if it is your error. You are not obliged to pay a 3rd party.

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Replying to ireallyshouldknowthisbut:
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By taxwizard
04th Nov 2021 10:34

Great advice thank you and will take your advice and write to the client

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By bernard michael
04th Nov 2021 10:47

One thing intrigues me. What have you done that makes her so bitter and twisted ??

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By Leywood
04th Nov 2021 11:16

Because (s)he chased her for a bigger bill, if I recall correctly.

That or she is just a narcissit. Or just likes to screw people out of part of a final bill whenever she moves suppliers/advisors and the like.

If she thought she had a good case then why did she pay anything at all. Hence, in part, why I said go after her for the full balance.

Include with the letter suggested above a statement of account in big bold typed letters, surrounded by double lines of thick bold lines round body of statement wording, all in black. Psychologically showing you arent messing about.

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By Hugo Fair
04th Nov 2021 13:33

Haven't seen the 'Victorian mourning letter' technique used in quite a while ... but the envelope will probably scare the bejaysus out of the recipient!

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By mkowl
05th Nov 2021 10:19

Always interesting to read these type of questions. I had a vindictive client - well he was the CEO of the client, a trade body. He was dismissed for gross mis-conduct by his employer, part of which related to irregularities over pension contributions. So said person tried to pin the blame on our firm for that. So, never about fees, more a scattergun approach about his loss of earnings.. So had to involve insurers though it was never really determined if he was a "client". Ironically the actual client is still a client. He then threw a curveball to the ICAEW. To be fair I wasn't treated as guilty, not that I was treated as innocent either. The 2nd irony is he then threatened to sue the ICAEW for its complaint handling when I was found to have acted reasonably.

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simson jones
By simsonj
06th Nov 2021 05:30

Fight fire with fire; issue a statutory demand. Alternatively move on.

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By bernard michael
06th Nov 2021 09:37

simsonj wrote:

Fight fire with fire; issue a statutory demand. Alternatively move on.


If she's an individual the lower debt limit for Stat Demand is £5000+
I've forgotten if the client is a limited company in which case I agree with you as the limit is £750. However you really will p*** off the judge if it got to a formal
hearing over £1000
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By I'msorryIhaven'taclue
06th Nov 2021 17:44

I'd most certainly reply myself to the other side's solicitors. Head your letter "Without Prejudice". State you have no wish to escalate the matter any further by appointing a solicitor to represent your side.

Ask two questions:

What precisely is the beef? ie what work, specifically, does your ex-client claim was not carried out to a reasonably acceptable standard? (The word "reasonable" comes up all the time in the latter and court stages; you only need to have performed to a reasonably competent standard; You are not required to have performed exceptionally well. And. for that matter, your ex-client is behaving unreasonably by attempting to escalate the matter to solicitors at ten paces);

What, pertaining to your alleged act or omission (do include the word "alleged") is the estimated quantum of the resultant financial damage? (Bet you it's around £1k plus legal expenses!)

It never hurts to ask what the other party actually wants. (What would your ex-client have you do in order to remedy matters?).

All of which will get the other side to declare their hand early doors. That will either put a ceiling on their claim; or otherwise expose their unreasonable expectation of punitive damages.

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