From: Ronald Raygun 
Subject: Re: Ex-employer wants extra payment back
Newsgroups: uk.finance uk.legal
Date: Wed, 22 Feb 2006 16:54:46 GMT

Cynic wrote:

> On Wed, 22 Feb 2006 15:13:20 GMT, Ronald Raygun
>  wrote:
>> [attribution lost] wrote:
>>> Even if you cannot pay it all back immediately due to having spent it,
>>> your position is similar to getting a legitimate bill that you cannot
>>> afford to pay.  If you do not reach an agreement (and it is *you* who
>>> are defaulting), your ex-employer could still sue you and you could
>>> end up paying the money back together with legal fees and interest.
>>
>>Not quite.  Yes, the employer could sue and would win, but there is no
>>basis for charging interest.  There is no loan agreement, they gave/lent
>>you the money without your permission, so they can't expect interest.
> 
> You are incorrect IIUC.  The courts have for some time been awarding
> interest on late payments.

A "late payment" might arise if you had ordered some goods or
services and are dragging your heels over paying the bill.  There will
be terms and conditions in the purchase contract which may include
the provision to charge interest on monies overdue.  *That* is what
courts would enforce.  But here, I humbly sumbit, we have a completely
different situation.

> Note
> that a court will not regard *any* offer as being reasonable if they
> find that the person had the means to pay it all at the time but
> *chose* not to do so.  I suggest that as soon as the judge asks to
> look at the OP's bank statements for the time he was first asked to
> pay the money back, the judge will be able to form an opinion as to
> whether that was or was not the case.

I don't think merely *having* the money (not the original money, of
course, which will be alleged to have been spent, but other funds in
similar quantity) should necessarily be a good enough reason to require
it to be paid out immediately and in one go.  It may be tied up in
accounts with early withdrawal penalties, or the money may be genuinely
required to meet anticipated expenditure, or just to sit there in case
an emergency arises (and I don't think an employer asking for their
golden handshake back counts as an "emergency").  If a person has
genuinely spent the money believing to have been entitled to it, and
spent it on something he could not really have afforded otherwise,
then it shouldn't (within reason) matter how much he's got stashed
in savings.  The repayment schedule should depend more on expected
future cash flows.

>>I would suggest to offer to repay over 5 years.  If they think that
>>unreasonable, they will say so.  You can then offer to pay it back over,
>>say, one year.  It's unlikely a court would deem that unreasonable, so
>>they would risk losing any suit which sought to force you to pay it
>>back quicker.
> 
> If you start out by making a totally unreasonable offer, they may
> decide to go straight to legal action - at which point your
> unreasonable offer will stand against you.

They can't "go straight to legal action".  If they want to take you
to court they have to warn you first, giving you a chance to crumble
humbly into submission and say you were only joking and could you
please pay it back over three months.  :-)