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Keeping A Paper Trail – The Importance of Evidence

Michael Gossage

Recently I have been instructed on a number of cases where clients have encountered one fundamental issue – a lack of documentary evidence. Evidence is crucial in civil disputes and is something everybody should think about when entering into any form of agreement or understanding with another party.

The onus is typically on a party bringing a claim to prove their case on the balance of probabilities.

However, there are some instances where defendants must evidence their position too, for example if they wish to counterclaim or where they state money was paid as a gift. Therefore it is crucial for all parties to consider documenting what has been agreed.

So how can you help protect yourself?

The most obvious way is to do proper due diligence on the person you are dealing with and to draw up a formal agreement to be signed by the parties. A dispute may still arise but a clear document that is signed and dated by those concerned will help prevent ambiguity as to the terms agreed later down the line.

However, I do appreciate it is not always perhaps suitable to enter into a formal contract. Often there is an element of trust in the relationship between parties and of course you do not typically enter into any agreement with a view to a dispute arising. Other arrangements are more informal and it may not be cost effective to have a formal agreement drawn up.

A familiar scenario with clients is where significant sums of money have been loaned to an ex-partner or a family member. Clients have explained to me that such loans were never documented and were agreed orally. They simply trusted the other party to stand by what had been agreed in person. Unfortunately when relationships break down, attitudes change and other issues (typically surrounding money) are often brought to light in an attempt to offset any agreed repayment.

So what can you do in these scenarios?

Keeping a paper trail is of paramount importance. It will help provide certainty and prevents parties trying to recollect the terms agreed some months or years later.

If money is changing hands, avoid cash payments where possible. Try to pay by way of bank transfer and keep copies of your bank statements. At the very least this will evidence a transaction has taken place and will prevent any argument that money was not received.

In any type of oral agreement, at the time you should send an email to the other party setting out what was agreed. This should include the date of any agreement, any monetary amounts and the terms of repayment. This may not be as clinical as a formal contract but contemporaneous documentary evidence can go a long way to reinforcing your position; particularly if legal proceedings do become necessary.

You should also try to use email as much as possible as matters develop; either as the main method of communication or in order to relay the contents of further meetings or telephone calls. In recent weeks I encountered a scenario in my personal life where email correspondence prevented a potential disagreement.

I have been in the process of organising a family social event next summer. I met with the caterer early last year to put initial plans in place. We met up again recently and the caterer told me I had changed my menu choice some months back at an increased cost. In my mind I was completely adamant I hadn’t. I went home and checked email correspondence from last year and could see I had and also the reasons why. It is easy to see how a dispute may have arisen without the benefit of a paper trail.

With a lack of a paper trail you may be left in a position whereby your only evidence is explaining your version of events to the court. Whilst witness evidence is important in any case, relying solely on your recollection of what was agreed can be troublesome. You will essentially be asking a judge to decide whose story they prefer.

The consequences of your case failing could be grave in that you may not only lose the case but you may expose yourself to a counterclaim and be ordered to pay the other side’s legal costs. I would urge everybody to think about this should you be seeking to enter into an informal arrangement. Litigation is never certain but if you keep a paper trail you will only increase your prospects of success.

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