M3 Insurance have supplied commercial insurance products to businesses in the UK since 1978.
6 months overdue
M3 had provided several insurance products for their client, a storage company, for the last 5 years. Despite usually having to wait for up to 3 months, invoices were always eventually paid. Suspicions were aroused when a credit check was carried indicating the company had cash flow issues, these suspicions were confirmed as the account remained unpaid after 6 months.
The debt recovery procedure
M3 Insurance supplied us with a copy invoices and background information enabling us to issue an initial demand. The demand letter requested payment within 7 days and informed the debtor that legal action would follow if payment was not made.
We received a telephone call from the managing director of the storage company 7 days after issuing the initial demand, he assured us that full payment would follow within 7 days. After speaking with our client it was decided that we should complete pre-legal protocol procedures and issue a final demand.
As expected the final demand expired and no payment had been received. We recommended immediate legal action and issued a County Court claim on behalf of M3 through our specialists money claims solicitor Simon Burn.
This case is a good example of the additional costs a debtor faces when failing to pay a commercial invoice on time. The original amount outstanding was £3,600 including VAT, the amount claimed in Court rose to £4,106.74 after adding the following charges:
- Late payment compensation £70.00
- Late payment interest £151.74
- Court fee £205.00
- Solicitor’s issue fee £80.00
The Court’s verdict
The defendant failed to enter a defence or acknowledge service of the claim. The Court entered Judgment and issued a CCJ to the value of £4,106.74. The defendant has been ordered by the Court to settle the Judgment immediately.
