advice please re contra charges
 

I'll try and keep this brief but it might turn out to be a long post!
Basically up until May last year I was set up as a sole trader, trading as 'ABC'.
Come May 2012 I set up a Ltd company with someone else and ceased trading as a sole trader. As I'd previously worked hard to build a reputation as 'ABC' we decided to call the company 'ABC Ltd' which gave us a bit of continuity with past clients without having to explain the change. This seemed to work and we continued to get work from the same old clients without too much trouble.
Work seemed to dry up with a particular client who had previously been pretty good. A new director had come in and decided he had his own favourite consultants.
Sorry rambling a bit!
Back in Jan 2012 I did some work for this developer under my sole trader hat. May 2012 I ceased all work as the sole trader and switched to being a director of the Ltd company.
2 weeks ago I get a letter from the developer detailing a contra charge for the work done in Jan 2012. Basically I'd done a planning layout and they'd used this planning layout to take coordinates off for piling. However the layout wasn't exactly on the right grid so the coordinates were wrong. They're trying to charge me for the cost of paying some other company to 'correct the plan' and the cost of having the piling rig sat idle on site whilst the coordinates are redone.
They gave me 7 days to respond (letter arrived Easter Saturday!) Saying if they didn't hear from me within 7 days they'd take it as me accepting the charges. I hand delivered my response on the Tuesday stating the reasons I refute all charges and I gave them 7 days to respond whereby if I hadn't received a respond I'd consider the charges dropped.
Yesterday I sent an email saying that as I hadn't had a response in 10 days I now consider the matter dropped.
Got an email back from the director at 10:30 last night saying he's sorry but the charges haven't been dropped and I will get a letter next week with a full explanation of their claim.
Where do I stand? I'm adamant they should have checked the drawing was on a grid before taking off the coordinates. I know they've edited the drawing in house since I last did anything on it.
I don't think they realise that they are making the claim against me and not the limited company as he's deliberately held back payment of two invoices for the limited company because of this claim.
Can they still pursue me as an individual as I ceased trading as ABC?
Where do I stand in terms of them not responding within the 7 days etc?
I never expected to win the fight in round one but they are a massive company and I'm just little old me, stressed enough with getting work done with the Ltd company to have much in reserve to take on such a big company.
I did have professional indemnity insurance as a sole trader at the time but obviously not now as its on the Ltd company.
Help/advice/support greatly appreciated!
Matt

Any setting out engineer worth his salt would/should check drawings against other layouts, ideally on Cad. Did you give them a physical copy or digital? I would be exploring the alteration avenue. I don't know much about responsibility to yourself or your new company but would imagine it would be difficult to stop payment to the new one.

Aaron:thumb:

I said in my letter to them that it was their responsibility to ensure the person/company doing the coordinates is competent and qualified to do so and that it should have been checked prior to taking any coordinates off it. I have subsequently found out from a friend that works there that it was one of their technical coordinators did the coordinates.

Check your insurance policy for the coverage terms at the time of the work. If it was a 'losses occuring during' basis the the PI insurance should still cover the loss if you're liable. If however the insurance was on a 'claims made' basis then chances are it won't cover the claim I believe.

I suspect he's hoping for the outstanding invoices to be waived in lieu of the contra charges but they're different 'companies' essentially with me being the common element. My business partner obviously doesn't see why thebltd company should be affected.

Sounds like you are being charged for someone else's incompetance.

When you issued your original drawing did you mark it as "Planning layout " if so then I would first argue that the drawing was for planning only and not for construction purposes.

I'm assuming that your drawing was acceptable to your client for the purpose that it was produced (planning) so why should you now be expected to pay for costs and associated delays, in correcting the layout for construction purposes (piling).

As others have said, your client should not be witholding money from the new Ltd company but unfortunately as they hold the cheque book this kind of practice is not uncommon.

on the PI front, best check your policy, but if your policy was inforce when you did the work then you should be covered.

HTH