A Cornwall based sole trader operating a glazing business was supplied with materials by our client, a Cornwall based builders and timber merchant. The debtor then ignored all of our client’s attempts to recover payment of invoices totalling £760.62. Although this was a small debt, it was in excess of our debt recovery minimum instruction value of £750.00, and we were happy to act on the instruction.
We commenced our action, and the debtor received Notice of our instruction by post and email. As we were about to initiate telephone contact with the debtor on the 3rd day of action, our client advised us by email that they had received full payment of the principal invoice sums. While relieved to have finally received payment, our client was unsure if anything else from them or any fee to us was required.
We thanked our client for the update and assured them that no payment was required. As per the agreement entered in with our client when they instructed us, our client is entitled to receive 100% of the invoice sums they are owed with no commission or fee to be paid. Therefore, it’s down to us to collect the invoice sums and the late payment charges that make up our fee.
Recovery of Debt Collection Fees
We continued in our action advising the debtor that payment of the principal debt did not cease the legal liability to settle the statutory late payment charges that the debtor had incurred up to the date that the debtor had finally settled the invoices. And that these charges remained enforceable in Court. The debtor paid the charges two days later, and our file in the matter was closed.
It is not uncommon for a debtor to pay the principal debt directly to our client as soon as they receive our correspondence in an attempt to evade the additional late payment charges that make up our fee. Once we advise the debtor that the charges have been applied in accordance with The Late Payment of Commercial Debts Act and that they remain legally enforceable, they are usually paid fairly quickly and no further action is required. However, some people will simply not accept that late payment legislation applies to their business, even though the statutory legislation applies to every single business in the UK.
Unfortunately there have been many instances where we have been forced to issue Court proceeding to recover payment of late payment charges. Ultimately this action simply increases the total amount the debtor is forced to pay when the Court issue fee and Solicitors issue fee are added. On a few occasions debtor have even ignored a Court Judgment registered against them, which results in Bailiffs be instructed to enforce the Judgment and further additional charges.
If you decide to instruct us, don’t be surprised if you receive immediate payment from the debtor that does not include our charges. All we require is that you notify us as soon as you receive payment, and we will then continue to pursue the debtor until the charges are paid.