The importance of sensitive issuance of debt recovery proceedings against your current customers

As with any business, it’s important to choose your customers carefully. However, this is easier said than done. When our clients are faced with pursuing a current customer over unpaid fees, there are a number of things we instruct them to consider, especially if they wish to continue to do business with that customer in the future. It’s difficult enough to secure new business in the first place – so it’s often worth the effort to work to retain it, where possible. If your intention is to both collect the monies owed, protect and retain the relationship, then it’s important that debt recovery proceedings are handled sensitively. At SprattEndicott we pride ourselves on our professional approach to recoveries involving parties still engaged in business.

There are, however, a number of practicalities that need to be assessed prior to the issuance of debt recovery proceedings.

Before taking legal action, it’s first necessary for you to assess whether your customer has any grounds upon which to withhold payment. Take the time to review the terms of your contract and make sure you have complied with your obligations. If you feel you have complied, try to make contact and establish upon what grounds your client is withholding payment. It may be for a number of reasons, such as: contractual disputes, disagreement over your entitlement to the funds or they simply may not have the funds to complete the payment. However, keep in mind that if you progress to legal action, any written correspondence may be requested by the court.

Another avenue worth exploring, before legal action is initiated, is alternative dispute resolution (ADR). ADR can help with the resolution of a dispute before it progresses to litigation and is intended to help parties reach a settlement. This can be an effective way to handle any conflict that arises over a debt in a current business relationship. It has become an effective tool in matters of debt recovery – enabling disputes to be resolved faster and at a fraction of the cost.  

There will, however, come a time when all other means of resolution fail and you have little choice but to take legal action and issue debt recovery proceedings. If this happens, it’s important that the firm issuing debt recovery proceedings on your behalf handles your client with care and respect. At Spratt Endicott we are mindful that often you may wish to continue to do business with the party that owes you money, or do business again in the future. We take care to outline what monies we hope to recover on your behalf and why, but we work not to escalate the dispute.

For further information on any aspect of our debt recovery services, please contact Richard Gwynne, Director, on 01295 204087 or by email.

*Disclaimer: While everything has been done to ensure the accuracy of the contents of this article, it is a general guide only. It is not comprehensive and does not constitute legal advice. Specific legal advice should be sought in relation to the particular facts of a given situation.