A familiar pattern: a consumer pays for a product or service, the supplier fails to deliver, a demand letter is ignored, and suit is filed. Only then does the supplier offer a refund, but it refuses to pay the costs the customer incurred to get there.
The general rule. Section 27 of the Civil Procedure Act gives courts discretion over costs. The settled principle is that costs follow the event: the successful party is ordinarily entitled to them unless there is good reason to order otherwise. A defendant who pays only after being sued has, in substance, conceded the claim.
Why costs matter. Without costs, a wronged customer ends up out of pocket for legal fees, filing fees and the time spent chasing a refund that was owed from the start. Courts recognise that a party should not be penalised for enforcing a right the other side ignored. Where a valid demand was ignored and suit became necessary, a later refund does not by itself justify denying costs.
How we handle a late refund.
- Accept the principal refund without prejudice to the claim for costs and interest.
- Show the timeline: the payment, the failed delivery, the demand letter, the silence, the suit, and only then the refund.
- Ask the court to enter judgment for costs, and interest where appropriate, or to record a settlement that includes them.
- Resist attempts to treat the refund as full and final settlement unless costs are agreed.
Lessons for consumers. Keep receipts, contracts and every message with the supplier. Send a clear written demand before suing, since it is strong evidence when costs are argued. Do not sign a "full and final settlement" note that is silent on costs.
Lessons for businesses. If a refund is owed, pay it when the demand letter arrives. Waiting for a lawsuit nearly always costs more than the refund itself.
No comments:
Post a Comment