Foot and mouth: FPB warns firms are still waiting payment from 2001 crisis

14 August 2007

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The FPB is warning smaller businesses to be wary of their dealings with the Department for Environment, Food and Rural Affairs (Defra) in relation to the current outbreak of Foot and Mouth Disease in Surrey.

Paul Gregory, the FPB's adviser on late payments, said: "Some of our members are still having to take legal action against Defra to recover monies invoiced against contract terms agreed six years ago."

The outbreak of Foot and Mouth Disease that affected large parts of the countryside in 2001 resulted in a number of court cases in which contractors sued for money not paid. In some cases, Defra had to pay millions of pounds to contractors, including heavy costs for interest and legal fees.

Peter McLoughlin, of solicitors McLoughlin and Company LLP, a member of the FPB, said that: "Years after the 2001 crisis, some contractors have had to fight to recover sums properly due to them from Defra."

Mr McLoughlin, who won a high profile case against Defra, added: "Any contractor or farmer undertaking work in relation to the present outbreak should exercise care in ensuring clarity in their dealings with Defra. Unless they do so and obtain clear agreement and certainty on what they are being asked to do, they may run a similar risk in being involved in protracted disputes many years down the line."

It is known the some smaller firms were forced to settle with Defra at figures below their claims, because they could not meet the costs of taking legal action. The FPB believes that some aspects of the current outbreak have been handled well, including the speed of implementing the ban on the transportation of animals. However it is calling on Defra to resolve ongoing issues from the last outbreak and bring the current situation to a speedy resolution. Mr Gregory said there was a lot of uncertainty in the industries affected.

"There are those still waiting for payment of sums relating to the last outbreak. There are farmers, contractors and shops waiting to know if they will receive compensation from the latest outbreak and when normality will be resumed. Defra must act decisively to ease all their worries."

Farmers were warned yesterday they will have to wait until the end of the week before the all clear can be sounded on the recent outbreak of Foot and Mouth disease.

Foot and mouth: FPB warns firms are still waiting payment from 2001 crisis

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