question-marks

Has this ever happened to you?

You have a customer who is refusing to pay an invoice which has been overdue for several months. You have tried to contact them but your calls have gone unanswered. You are getting the distinct impression that you are being ignored! Your patience has worn thin and you decide to issue a claim. Considering the claim can be completed online it seems like the most sensible thing to do. After a couple of weeks and having thought no more of the claim, you hear from solicitors. It turns out the customer is disputing the invoice and will be putting in a defence. That’s not the response you were expecting!

Where do you go from here?

As businesses and individuals struggle with cash flow, unpaid invoices and scenarios like the one set out above have become all too common. Issuing the claim may have seemed like a sensible idea at the time but in reality you are no closer toward getting your invoice paid.

Thinking ahead

If you find yourself in a similar situation, try following these steps before issuing any claim:

  1. Find out why the customer is not paying; speak or write to them. Try and find out what the problem is.
  2. If there is a genuine dispute then get some advice. You will need to know where you stand if the customer is making allegations against you.
  3. Even if there is a genuine dispute and/or you do not have a strong claim, don’t give up. You can send the customer a Letter Before Action. This is essentially a formal letter which sets out what your potential claim is. If you later decide to bring a claim, the Court Rules say that a Letter Before Action must have been sent. There are specific Pre-Action Protocols which must be followed when drafting the letter. These Protocols are very important and failure to comply with them can lead to serious penalties for the offending party.
  4. If there is not a genuine dispute then you could serve a Statutory Demand on the customer. This can be a low-cost method of getting payment. We talk more about Statutory Demands elsewhere in our blog.
  5. Often, the Letter Before Action and/or Statutory Demand forces the other side to sit up and take the dispute seriously because of the threat of legal action. The door is now open for dialogue.

It is entirely possible that you will settle the dispute without ever having to issue proceedings, or at the very least narrow the issues in dispute.

So if you ever find yourself with a dispute over a contract or an unpaid invoice, try following the above steps before you press send on the claim form.

For more information, email blogs@gateleyuk.com.


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This blog is intended only as a synopsis of certain recent developments. If any matter referred to in this blog is sought to be relied upon, further advice should be obtained.