Debt Recovery Q&A

Your legal questions

answered...

Q. One of our clients has failed to pay a debt for some time; we need the money but don’t want to ruin the relationship. Can you help?

Attempting to maintain civil relations while endeavouring to recover money owed is a fine balancing act. We will work with you to recover the monies without the need for formal legal action, and certainly only seek recovery in the County Court when completely necessary. We Often find that if after following a set procedure you do not receive a positive response, a polite but firm letter from your legal advisers can often do the trick. Then any annoyance can be attributed to your debt recovery procedures and your overzealous solicitors.

Q. I've done work and supplied materials, and still waiting to be paid. The work was in April 2013, but I always give 30 days so it was due near the end of May 2013. As I have done work for them before, I knew they were late payers (usually 10 weeks over the due date), but this time I'm not getting anywhere with them. I have email invoice after invoice and the reply I get is - I will forward them to accounts, which happens to be in Belfast! I am a small business and they are international company - WHAT CAN I DO?

Sadly, many large companies take advantage of smaller suppliers - simply because they can. You have to think about if you want to keep their business - if you're spending loads of time recovering money from them on every occasion, wouldn't you be better concentrating on other, less stressful, work?

If you want to retain the relationship with them, I suggest making a phone call - e-mail is good, because it creates a "paper trail", but it can easily be forwarded or deleted without anyone actually dealing with it. It is much more difficult to avoid a creditor on the phone!

If this is the approach you wish to take, I suggest being open with them - remaining polite and professional at all times.

Something like, "I've e-mailed on a number of occasions now, without any success, so I thought I'd try the direct approach! I'm sure you understand that, as a small business, I simply can't afford to wait so long for payment of my invoices. Is there a better, more efficient way to deal with this in the future? Can I e-mail you my invoices direct? Then, if they're not paid say a week or so later, would you mind if I called you for an update?"

This may actually give you the advantage of creating a personal relationship with someone in their accounts department - and if they know you're going to keep calling them regularly, they'll hopefully want to get you out of the way!

If you don't want to keep their business, then still try this approach anyway - but be prepared for the fact that you may have to issue proceedings in the County Court to recover your money. Depending on the value of the claim, you may wish to do this yourself (for example, if it is under £5,000) - alternatively, my firm offers "menu pricing" services for litigation cases, where you pay us for advice for a specific aspect of the case - e.g. drafting the claim form - without giving us a "blank cheque" for legal fees!