Nailed by Social Media

I recently helped a client (the Client) successfully challenge an application to set default judgment aside with the help of LinkedIn.
The Client supplies sales and marketing data to businesses through an annual subscription. Although the debtor agreed to the Client’s annual subscription at a price of £3,360 and downloaded 275 data items within the first 7 days, he claimed that he gave notice of cancelation consistent with his rights under the Consumer Protection (Distance Selling) Regulations 2000 and therefore was not liable to pay the subscription. I advised the Client despite the debtor giving notice of cancellation the merits of a legal claim were good and on my advice the Client issued a county court claim for £3,360 together with late payment interest and compensation. As a result of the debtor failing to file their defence on time, the court at the Client’s request awarded judgment in default for £3,638. However soon after the debtor applied to set aside judgment on grounds that he had exercised his consumer right to cancel the agreement by giving notice of cancellation within the statutory cooling off period.
With my help the Client successfully challenged the debtor’s application by exhibiting the debtor’s LinkedIn profile demonstrating that he in fact was a marketing professional with his own business.
Judge’s Comments
The judge commented that the debtor did not demonstrate a defence with a real prospect of successfully defending the claim and the Client was entitled to claim costs for unreasonable conduct. Furthermore the judge agreed with the Client that there was no way of mitigating their loss because the debtor had taken advantage of the service and therefore the Client was entitled to be paid in full. The Judge also considered whether or not the particulars of claim in a short form was sufficient to which he decided it was because the defendant was aware at all times what the claim was about.
There are five lessons from this case: –
(i)                 A businessman cannot rely on consumer cancellation rights.
(ii)               If a judgment is awarded as the result of the Defendant failing to acknowledge service or file a defence on time, the Defendant is at liberty to apply to set judgment aside. However in order to set aside judgment the Defendant must demonstrate that they have a defence with a real prospect of success.
(iii)             Although costs for small claims are irrecoverable, if a Judge feels that a defendant is making a nuisance of themselves by amongst other things raising a weak defence they will be ordered to pay costs for unreasonable behaviour.
(iv)              If the defendant has taken advantage of the service to which the claim pertains the Claimant is entitled to be paid in full.
(v)                A contract claim can be pleaded as if it is a debt providing the defendant was aware at all times what the claim is about.
The moral to the story is that depending on the circumstances Social Media can help businesses challenge spurious claims.  Furthermore Social Media has made the world a smaller place making it easier for investigators to track down debtors. Only the other day thanks to Twitter I was able to locate a debtor that owes my client £9,000. The debtor boasted on twitter about his new job at a prestigious hotel in Scotland and where he was staying…, Gotcha !!

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