Difficulties with debt recovery?
A client guide on commercial debt recovery
Cashflow problems?
Another client has failed to pay a bill. Your firm is profitable, but your cash flow is suffering. You want to spend your time earning, not chasing money due to you. You want to enforce your rights but are not sure how. A letter from a solicitor may have the desired impact but you don’t want to spend vast sums of money recovering what is owed.
A new Pre-Action Protocol has been introduced for all civil disputes. If it is not followed, then the court could make an order for costs against the party not complying.
If you wish to bring a claim you should:
- Write giving full details of the claim
- Enclose copies of the documents you wish to rely on (such as an unpaid invoice)
- Ask for a prompt response, say in one month
- State that court proceedings will be issued if the response is not received within that time
- Ask for copies of any relevant documents which the opponent has
- State whether you wish to mediate, and explain that the court may impose sanctions for failure to comply with the Protocol.
If you are defending a claim and receive a letter like this you should:
- Acknowledge receipt within 21 days of receipt.
- You should say when you will give a full response. If this will be longer than the time allowed by the Claimant you should explain why.
- When you make a full response you should say whether the claim is accepted as a whole, in part, or not at all and make proposals for settlement if appropriate.
If you are denying a claim:
- Give detailed reasons why the claim is not accepted, what is agreed and what is in dispute. Enclose copies of the documents you rely upon.
- Ask for any documents the Claimant has that are relevant and have not been provided to you, and state whether you would be prepared to consider mediation.
- Where documents are disclosed they should normally only be used to resolve the dispute, not for any other purpose unless the other party agrees.
It is now vital to take the right action at the start of chasing a debt. Thomas Dunton’s commercial debt recovery team are here to ensure you do.
Interest
The Late Payment of Commercial Debts (Interest) Act 1998 is now fully in force and allows for all businesses to claim interest from each other on debts due. Any attempt to contract out of this statutory right to interest must provide a substantial alternative and will be subject to the court’s view as to whether it is reasonable or not.
If there is no contractual rate of interest, you may be entitled to the statutory interest rate of 8% above base. This is applicable from any agreed date, or 30 days after either you did what you contracted to do or the purchaser received notice of the sum due. There are also other penalties which may be claimed.
Terms and Conditions
To avoid future difficulties enforcing payments due, we can assist by ensuring your terms and conditions of trading are appropriate.
Mediation
If you are involved in a dispute have you considered mediation?
It can often reduce costs, bring about a faster settlement that is acceptable to both parties, and may even allow a commercial relationship to continue. Contact:
Vernon Hadida
CEDR Accredited Civil Mediator
mediation@thomasdunton.co.uk
What Thomas Dunton can do for you
Part of the service we provide is dedicated commercial debt recovery to meet all your needs. It is a quick, efficient and, most importantly, cost-effective answer to all your debt recovery problems. We do all the chasing on your behalf to enable you to concentrate on more important matters. You can rest assured, knowing that you have a legal team on side willing to give you clear advice on all your debt problems.
