Handling a disputed invoice: verbal quotation

Question

If a professional services firm gives a verbal quote (in line with market rates) but then bills for services that, by an order of magnitude, exceed the original quote (and market rates) – what recourse does the recipient of the invoice have to rectify the issue?

Assuming the recipient of the invoice formally notifies the issuer within 21 days or receipt of the invoice that they dispute the amount – and then fail to hear back from the issuer of the invoice, how can the recipient move forward to a satisfactory resolution from a legal standpoint?

Should the recipient pay the undisputed amount in the mean time? Or does payment of the undisputed amount imply acceptance of the wider charges of the disputed invoice?

More generally, is it legal for a professional services firm to stack up additional charges and services beyond the initial quote without informing the client of their intention either verbally or in writing?

Finally, if the issuer responds and refuses to enter into a satisfactory dialogue with the client to re-issue an invoice in line with the initial quote, how will a mediator look at the body of evidence to determine a final charge?

Answer 1

what recourse does the recipient of the invoice have to rectify the issue?

Why does the recipient need “recourse”? They have not at this point suffered loss needing recourse.

how can the recipient move forward to a satisfactory resolution from a legal standpoint?

Assuming the recipient in happy with the status quo, why would they do anything?

Should the recipient pay the undisputed amount in the mean time? Or does payment of the undisputed amount imply acceptance of the wider charges of the disputed invoice?

Yes. No.

More generally, is it legal for a professional services firm to stack up additional charges and services beyond the initial quote without informing the client of their intention either verbally or in writing?

It’s legal to charge what you like. That doesn’t mean you are entitled to payment for it.

how will a mediator look at the body of evidence to determine a final charge?

They won’t. Mediators don’t make decisions, they facilitate dispute settlements.

Onus of proof

Just because someone says you owe them money it doesn’t mean you do.

The person claiming the debt needs to prove the debt. You owe what the contract says you owe, which is not necessarily what you were invoiced. If the contract is not specific then you owe a reasonable amount for the work you authorised which may include reasonable additional work within the general scope. Obviously, any quote you received will factor into what’s reasonable.

Be clear with what you dispute and pay what you don’t - the ball is in their court now.

Answer 2

Should the recipient pay the undisputed amount in the mean time? Or does payment of the undisputed amount imply acceptance of the wider charges of the disputed invoice?

Timely payment of the undisputed amount prevents the service provider from rightfully alleging breach of contract. Customer's payment under the terms he agreed upon does not indicate his acceptance of conditions that the counterparty changed belatedly and unilaterally.

is it legal for a professional services firm to stack up additional charges and services beyond the initial quote without informing the client of their intention either verbally or in writing?

No. That departs from the conditions of the contract or agreement between the parties.

Furthermore, merely informing the customer is not enough. For the additional charges to be cognizable, the customer needs to have agreed to them.

That being said, acceptance could be inferred from customer's lack of response if the notice indicates so and gives the customer a reasonable deadline for objections.

how will a mediator look at the body of evidence to determine a final charge?

The mediator makes no decisions. His function is only to facilitate dialogue between the parties.

A fact-finder's job (such as a judge, jury, or arbitrator, depending on what methods of dispute resolution are available to the parties in the contract) will consist of ascertaining the conditions that both parties agreed upon.

If the contract is implicit or its terms cannot be proved (example: from a written contract or recordings), the fact-finder would assess the parties' subsequent conduct to ascertain each party's legitimate intent in the formation of that contract.