Unpaid invoice - letter before action or debt collector?
Discussion
Got a £3k invoice outstanding for 3 months. They've had the kit thats not in dispute, there are some issues internally and the branch manager says its "out of her hands" 
Id like to focus their mgmt and give them a last chance, my accountant says he has a decent debt recovery guy. Google shows there are some online templetes to send a final "letter before action" that seem to look good - eg here https://www.rocketlawyer.com/gb/en/business/manage...
Whats the PH advise with these issues?
Id like to focus their mgmt and give them a last chance, my accountant says he has a decent debt recovery guy. Google shows there are some online templetes to send a final "letter before action" that seem to look good - eg here https://www.rocketlawyer.com/gb/en/business/manage...
Whats the PH advise with these issues?
I would go with a pre-claim letter personally, detailing the debt and making a formal demand for immediate payment along with a deadline, and explaining the consequences of them not doing so which may include you adding interest and either issuing a statutory demand or raising proceedings.
Shnozz said:
Question - I've heard that statutory demands an be very effective. If so, why does anyone bother with the court route?theboss said:
I would go with a pre-claim letter personally, detailing the debt and making a formal demand for immediate payment along with a deadline, and explaining the consequences of them not doing so which may include you adding interest and either issuing a statutory demand or raising proceedings.
I would concur with this approach. The OP has clearly been having dialogue with the customer and their internal issues are nothing to do with him.The LBA will hopefully focus their mind
cheeky_chops said:
... They've had the kit thats not in dispute, there are some issues internally...
Just picking this out of your OP. Could you clarify what you mean by the bit in bold?Sorry if I'm being a bit dense, but IMO it could be interpreted as -
1. You supplied some kit which isn't performing as expected/promised - understandable that they'd want to withhold payment.
2. You supplied some kit and your customers are trying the excuse that their internal procedures are preventing payment - no excuse and I'd go with LBA as a first move.
theboss said:
I would go with a pre-claim letter personally, detailing the debt and making a formal demand for immediate payment along with a deadline, and explaining the consequences of them not doing so which may include you adding interest and either issuing a statutory demand or raising proceedings.
I'd agree with this suggestion, especially regarding interest accruing (and potential legal costs). Sometimes it focusses the mind of the recipient if they realise that the debt is going to increase if they don't do something about it.sunbeam alpine said:
cheeky_chops said:
... They've had the kit thats not in dispute, there are some issues internally...
Just picking this out of your OP. Could you clarify what you mean by the bit in bold?Sorry if I'm being a bit dense, but IMO it could be interpreted as -
1. You supplied some kit which isn't performing as expected/promised - understandable that they'd want to withhold payment.
2. You supplied some kit and your customers are trying the excuse that their internal procedures are preventing payment - no excuse and I'd go with LBA as a first move.
14 days was up today so called and its still with her team member to sort
cheeky_chops said:
sunbeam alpine said:
cheeky_chops said:
... They've had the kit thats not in dispute, there are some issues internally...
Just picking this out of your OP. Could you clarify what you mean by the bit in bold?Sorry if I'm being a bit dense, but IMO it could be interpreted as -
1. You supplied some kit which isn't performing as expected/promised - understandable that they'd want to withhold payment.
2. You supplied some kit and your customers are trying the excuse that their internal procedures are preventing payment - no excuse and I'd go with LBA as a first move.
14 days was up today so called and its still with her team member to sort
Might be some useful pointers in this recent thread: https://www.pistonheads.com/gassing/topic.asp?h=0&...
Simpo Two said:
Shnozz said:
Question - I've heard that statutory demands an be very effective. If so, why does anyone bother with the court route?BlackTails said:
Stat demands work well if there is no genuine dispute over whether the debt is owed. If there is, you can find that you go down the SD path and then get told to start again with court proceedings. And have a fat bill in Legal’s costs (yours and the other party’s) to pay.
Thanks. Though I suppose in practice all debtors will say there's a dispute even if there isn't... Who actually officiates on an SD?Simpo Two said:
BlackTails said:
Stat demands work well if there is no genuine dispute over whether the debt is owed. If there is, you can find that you go down the SD path and then get told to start again with court proceedings. And have a fat bill in Legal’s costs (yours and the other party’s) to pay.
Thanks. Though I suppose in practice all debtors will say there's a dispute even if there isn't... Who actually officiates on an SD?Simpo Two said:
Thanks. Though I suppose in practice all debtors will say there's a dispute even if there isn't... Who actually officiates on an SD?
Some don’t; they just ask for time to pay. If the SD is served on an individual and the recipient applies to set it aside then either an insolvency judge or a county court district judge (depends where the debtor resides).
If one uses a SD on a company (unusual but sometimes done) then a High Court judge, who decides whether to injunct the would be creditors from presenting a winding up petition.
Basically: a proper court that knows what they are looking for and can smell bulls
t. BlackTails said:
If one uses a SD on a company (unusual but sometimes done)
A lifetime ago I worked with a local authority to move their debt collection in-house. Back then, stat demands were exclusively used against businesses (there were enough other tools for regular folk).Here's my letter before claim... very rarely do I need the next step (although we're B2C). Obviously with invoice dates, details and terms.
As the overdue invoice remains unpaid and there have been no further communications from you, my attempts to resolve this matter amicably do not appear to have been possible. It is apparent that court action may be necessary and I write in compliance with the Practice Direction on Pre-Action Conduct.
From you I am claiming the outstanding invoice, plus will seek to recover additional costs should they be incurred during required processes.
I can confirm that I would be agreeable to any system of Alternative Dispute Resolution in order to avoid the need for this matter to be resolved by the courts. I would invite you to put forward any proposals in this regard.
In closing, I would draw your attention to paragraphs 15 & 16 of the Practice Direction which gives the courts the power to impose sanctions on parties if they fail to comply with the direction including failing to respond to this letter before claim.
Should I not receive payment of the overdue invoice or a response to this communication I anticipate that court action will be commenced with no further reference to you.
Yours sincerely.
Simpo Two said:
BlackTails said:
Stat demands work well if there is no genuine dispute over whether the debt is owed. If there is, you can find that you go down the SD path and then get told to start again with court proceedings. And have a fat bill in Legal’s costs (yours and the other party’s) to pay.
Thanks. Though I suppose in practice all debtors will say there's a dispute even if there isn't... Who actually officiates on an SD?On many occasions invoices aren’t paid due to lethargy or to preserve cash flow rather than any genuine dispute.
On most occasions when I serve a stat demand they go as unanswered as the original invoice. Upon threat of a winding up petitition payment usually follows thereafter.
In a professional capacity I wouldn’t tend to use them on an individual. But B2B on behalf of a client I’d always suggest this as an easy and quick avenue rather than the glacial money claim equivalent.
Stat demands really only work for tardy payers of straight forward invoices and little else, but that’s what this situation appears to be.
I’d certainly prefer it if my clients instructed me to pursue full on court proceedings every time over unpaid little debts - I’d earn far more from them for doing so. However, I like repeat clients!
Shnozz said:
I’d certainly prefer it if my clients instructed me to pursue full on court proceedings every time over unpaid little debts - I’d earn far more from them for doing so. However, I like repeat clients!
I'm guessing that 'Lifestyle Brand Ambassador is just a cover for 'lawyer' then 
My most serious non-payer involved a dispute over photography, so there was an element of subjectivity even though it was clear they were simply trying to get my work for free by making up nonsense. Small Claims > High Court worked very well, but as you say. not fast.
Edited by Simpo Two on Wednesday 9th October 10:20
22 said:
A lifetime ago I worked with a local authority to move their debt collection in-house. Back then, stat demands were exclusively used against businesses (there were enough other tools for regular folk).
Here's my letter before claim... very rarely do I need the next step (although we're B2C). Obviously with invoice dates, details and terms.
As the overdue invoice remains unpaid and there have been no further communications from you, my attempts to resolve this matter amicably do not appear to have been possible. It is apparent that court action may be necessary and I write in compliance with the Practice Direction on Pre-Action Conduct.
From you I am claiming the outstanding invoice, plus will seek to recover additional costs should they be incurred during required processes.
I can confirm that I would be agreeable to any system of Alternative Dispute Resolution in order to avoid the need for this matter to be resolved by the courts. I would invite you to put forward any proposals in this regard.
In closing, I would draw your attention to paragraphs 15 & 16 of the Practice Direction which gives the courts the power to impose sanctions on parties if they fail to comply with the direction including failing to respond to this letter before claim.
Should I not receive payment of the overdue invoice or a response to this communication I anticipate that court action will be commenced with no further reference to you.
Yours sincerely.
I would also bring their attention to the statutory late payment legislation, and remind them that the invoice is now subject to the fixed fee + interest accruing to date.Here's my letter before claim... very rarely do I need the next step (although we're B2C). Obviously with invoice dates, details and terms.
As the overdue invoice remains unpaid and there have been no further communications from you, my attempts to resolve this matter amicably do not appear to have been possible. It is apparent that court action may be necessary and I write in compliance with the Practice Direction on Pre-Action Conduct.
From you I am claiming the outstanding invoice, plus will seek to recover additional costs should they be incurred during required processes.
I can confirm that I would be agreeable to any system of Alternative Dispute Resolution in order to avoid the need for this matter to be resolved by the courts. I would invite you to put forward any proposals in this regard.
In closing, I would draw your attention to paragraphs 15 & 16 of the Practice Direction which gives the courts the power to impose sanctions on parties if they fail to comply with the direction including failing to respond to this letter before claim.
Should I not receive payment of the overdue invoice or a response to this communication I anticipate that court action will be commenced with no further reference to you.
Yours sincerely.
For a 3k undisputed debt I would suggest the 'Stat Demand' route. Its free to issue, and the company will have 21 days from date of its issue to apply to the court to have it set aside, ie to stop you issuing a winding up petition. It will involve a visit to the court, in front of a judge, for both parties and the judge will decide whether there is an argument to it being set aside or not. They won't consider affordability or such, its simply a legal decision on whether they deem the debt due or not. It is therefore extremely effective.
The other option as others have mentioned is small claims court. I wouldn't suggest this route for an undisputed debt as you would basically be giving the other party months and months to pay. First they get to tick a box saying they want 28 to reply. You then have to try and resolve through mediation, which is useless, and then finally you will be given a date for a hearing. Honestly, its painfully slow these days, and you have to pay for the pleasure up front.
If they have the money to pay, and the debt isn't disputed, its a no brainer to me.... (and has been recently as have issued two to a company I undertook work for recently who decided they didn't want to pay around 10k in total. Needless to say, they lost, and it was quite entertaining to see).
The other option as others have mentioned is small claims court. I wouldn't suggest this route for an undisputed debt as you would basically be giving the other party months and months to pay. First they get to tick a box saying they want 28 to reply. You then have to try and resolve through mediation, which is useless, and then finally you will be given a date for a hearing. Honestly, its painfully slow these days, and you have to pay for the pleasure up front.
If they have the money to pay, and the debt isn't disputed, its a no brainer to me.... (and has been recently as have issued two to a company I undertook work for recently who decided they didn't want to pay around 10k in total. Needless to say, they lost, and it was quite entertaining to see).
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