MONEY SHOP
Footwear Today’s financial plumber, footwear retailer David Gummers, talks about good record keeping.
T
his month I would like to bring to your attention the importance of keeping good records to protect the financial health of your
business. All will become apparent, as I explain what happened next. In August we received a letter from a solicitor (name withheld for legal
reasons) suggesting that our company may have caused an illness to their client, while he was employed by us. Apparently the gentleman’s illness was caused by vibrating equipment (in a respectable shoe shop, whatever next! Ed.). Before I informed our insurer, I went through all our employment records, as I had no recollection of this person ever having worked for us. Obviously, I wanted to be very careful before launching a defence based on the fact that we never employed someone, if it subsequently turned out we had. I have a record every employees notice letter of resignation /or our letter terminating their employment, going back more than 30 years, which, in this case turned out to be really useful. I informed the insurer accordingly, thinking, naively, it would be an end to
the matter. At the end of October a second letter arrived, more menacing in tone - saying if we did not provide the requested information the solicitor would take us to Court. I then sent them an email and also picked up the phone, explaining it is very difficult to provide information for an employee who has not worked for us. I also said that I believed that as a law firm it would be a good idea to get some evidence either in the form of a pay slip or a contract before sending out accusatory letters, which have no basis in fact. It would have also saved them time and their client some expense if they
had researched the business to see that we have no vibrating equipment (we don’t even play music). All businesses make mistakes but for a legal organisation not to check whether there was a realistic chance of winning is not very professional. As an aside I said “When we get your letter of apology (which we and our
insurers now have) we will be seeking compensation for our time the inconvenience and aggravation in defending this non-case. Of course as you will see below, they have made a charity donation. I am mildly aggrieved that our company was not given anything for the time and unnecessary stress particularly to my mum, caused by this matter! I have since spoken to the law firm’s senior partner and explained my
complaint to her I await her response to my compensation claim. We have now had a full apology and £100 has been paid to the Cumbria Foundation for the floods. I feel strongly that it is very important that I try to prevent this happening
to anyone else, so I have sent a report to the Solicitors Regulatory Authority. I have also sent a report to the National Fraud Agency, and have a reference number and a password if I need to update it. I have asked the law firm probably the most important question of all -
How many letters have they sent out on behalf of this client? I have not had a response to this yet. I suspect that this is a fishing exercise to see if any insurer will pay out. I have sympathy with anyone who is ill, and of course they should be compensated if a business is at fault. From a financial point of view there are several things that come out of
this, and the advice I would offer is always keep employee records, and if you cannot store them ask your accountant to store them on microfiche for you.
The executive who wrote the letter told me “We would have pursued you if it had not been for the fact you had perfect employee records.” The other thing worth bearing in mind if there is a successful claim
against your business your insurance premium will go up. While, it is of course prudent to inform your insurer do not let them agree to pay out unless you think it is 100% justified. Obviously, a business has got to weigh up whether it is worth going to court to defend an action, but it is in nobody’s interest to pay out money unnecessarily. Liaising with your insurer and discussing with your team is worthwhile. There is no doubt in my mind that it is vital both financially and to protect the good name of your business to ensure you do not allow yourself to be cowed when a solicitor writes you a letter. You will instinctively know if you have a case to answer. Whilst I accept the apology from the firm - I ask the question was this an
“innocent mistake” as the firm claimed in their final letter - I will leave you to be the judge of that as I could not possibly comment!! The question left hanging though is the 2 apology letters were different. The first said that it was an E Dickinson -there is no Ltd Company currently trading with the E! The second said it was a different F Dickinson. The only other F Dickinson is a roofer from Berkshire, bearing in mind the client comes from the north east – I will let you draw your own conclusions. One final thought, I do wish the gentleman a speedy recovery and that he gets whatever treatment he needs.
If you would like David to look at your business costs, he promises that if he cannot save you any money you pay him nothing. But for every pound he saves you pay him, 15 pence. If you want to learn more email David on david@fdickinsonfootwear 01229 580654 Website: http://www
.fdickinsonfootwear
.co.uk or call
.co.uk/
26 • FOOTWEAR TODAY
• FEBRUARY 2016
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