Frequently Asked Questions
Q. Am I required to pay your fees in advance?
Q. What evidence is necessary to prove my claim?
Q. Will the letter before action result in payment?
Q. What if I am paid before a Claim Form is issued?
Q. When does the County Court Claim Form actually get issued by the Court?
Q. If Judgment is entered does this mean I automatically get my money?
Q. What happens if the action is defended?
Q. What are my liabilities to pay the other side's legal costs?
Q. Enforcement Proceedings - What are my options?
Q. Am I required to pay your fees in advance?
A. No, but please beware of debt recovery agencies that require you to buy books of vouchers or pay large sums in advance. Over the years there have been a number of agencies who recover monies on behalf of their clients only to then put their companies into liquidation before the recovered sums can be paid to you. The Commercial Recoveries Team invoice monthly and this invoice includes all the charges and disbursements incurred. Our payment terms are 14 days and we reserve the right to offset any recovered monies against any invoices which exceed our terms of payment.
Q. What evidence is necessary to prove my claim?
A. It depends on the nature of your business. Ideally, you will have a credit application form confirming that the debtor agreed to abide by your terms and conditions. (We can help you prepare a credit application form and review your terms and conditions). You may have proof of delivery forms showing the goods were delivered. You may have kept telephone attendance notes and/or received correspondence from the debtor saying that they will "pay next week". All of this documentation is extremely relevant and will be used to prove your claim together with copy invoices, statements of accounts, emails etc.
If you do not ordinarily use terms and conditions of trading or have credit account application forms, then you are running an unnecessary risk as you are effectively granting the Judge a wide discretion to decide "what is reasonable". What one Judge thinks is reasonable will invariably differ from another Judge.
Q. Will the letter before action result in payment?
A. It depends. Some industries are better than others but we do get approximately 85% response to our letter before action. Responses include either raising a query, offering instalments or just enclosing payment! In the late 1980's building companies who were in the grips of the recession frequently failed to respond to anything at all as so many of them were in financial difficulties. Having said that, a Solicitor's letter does indicate to your debtor that you are serious about pursuing them. Quite often credit control departments send three or four chasing letters and say they are going to instruct Solicitors and don't and even worse in our view, say they are going to issue a Claim Form and then do not issue. If you get a reputation as being a "soft touch", it is not surprising that some debtors take advantage.
Q. What if I am paid before a Claim Form is issued?
A. You must tell us. Whilst we will never issue proceedings until we obtain your instructions, we do require to be notified that you have been paid as this will stop us sending further correspondence or incurring costs unnecessarily.
Q. When does the County Court Claim Form actually get issued by the Court?
A. We issue all of our proceedings from our local Court in Banbury They are hand delivered to the Court each day. On average, the Court issue all of our proceedings within 48 hours.
Once the Claim Form has been issued, the Defendant has 14 days to serve an Acknowledgement of service indicating that a Defence will be filed, failing which judgment can be entered. If an Acknowledgement is filed then the Defendant is automatically granted a further 14 days to respond.
Q. If Judgment is entered does this mean I automatically get my money?
A. No, not at all. Usually obtaining Judgment is the easy part. Some Defendants will pay, however others will wait until enforcement proceedings are commenced. Some Defendants never pay at all and may declare themselves bankrupt (if they are an individual) or go into liquidation (if they are a company).
We do not guarantee that we will recover every debt that you instruct us on. Any debt collection agency that does should be treated with extreme caution.
Q. What happens if the action is defended?
A. If a Defence is filed then the matter is dealt with and charged on a time-spent basis at an appropriate hourly rate. We will take your instructions and if in our view there is no legitimate defence we make an application for summary judgment on your behalf. Such an application effectively "short circuits" the Trial procedure with the result that you may obtain Judgment without the matter proceeding to a trial at Court.
If the Defendant does have a legitimate defence, then you will be advised on the merits of the case and decide whether you wish to pursue this matter at all.
Q. What are my liabilities to pay the other side's legal costs?
A. If the debt is under £5,000 the case is likely to be allocated to and be dealt with as a small claim. In such cases it is extremely rare for a Judge to order that the losing party pay the winning party's legal costs. A Judge may make an Order if he considers that the proceedings were brought unreasonably. If however you lose a small claim case, you will still be liable for the other side's witness expenses which will usually include travel, loss of earnings and the cost of calling any expert witness.
If your case is over £5,000, then it will be allocated to the "fast track" or "multi track". Legal costs are then in issue and you could find yourself paying thousand of pounds either to pursue an action or to pay out to the other side if you lose. We will discuss the question of costs when a matter is defended. We do not believe it is appropriate for our clients to "throw good money after bad". However, if you chose to pursue a matter on a "point of principle" regardless of the costs (and believe it or not such clients do exist), then we will pursue the matter accordingly!
Enforcement Proceedings
Q. What are my options?
Once a judgment has been obtained, it does not automatically follow that the Judgment Debtor (i.e. the defaulting Defendant) will pay (see above).
It may well be necessary to enforce the judgment in order to recover payment. Steps which may be taken to achieve this include:-
Order to Obtain Information from a Judgment Debtor
The Judgment Debtor is required to attend Court in order to give evidence on oath as to exactly what assets he or his business has. It is possible for company directors to be compelled to attend Court to be examined to give evidence about company assets.
To apply for Order to Obtain Information, you complete a "Request for Oral Examination" form which can be obtained from the Court. It is necessary to pay a Court fee.
The Court will serve an Order telling the Defendant when and where he has to attend Court. If you are a company or legally represented then the Order must be served by process servers at your own cost.
A word of caution - not all debtors turn-up when they are required to do so. Thus, if your Order to Obtain Information hearing is going to be in a remote Court, think twice about attending in person. The Court will run the hearing in your absence.
Third Party Debt Orders
It is possible to obtain an order that a debtor's bankers (or someone else holding security) pay over any money which is in the debtor's account as at the date of the "Freezing Order".
It is, therefore, important to know where customers' bank accounts are located and, as mentioned earlier, photocopies of previous incoming cheques may be of great assistance. The Third Party Order has to be fairly specific i.e. it must state the bank and the name and number of the account and the bank has to search for other related accounts. For its part, the bank is only required to pay over any money in the account at the date of the Order. Accordingly, if you freeze a bank account when there is nothing in it, you get nothing!
To apply for a Third Party Debt Order, you must send to the Court a statement of truth to say that the money owed has not been repaid. You need to pay a Court fee. The Court will grant an Order which must be served on the third party. A further hearing date will then be fixed at which the Third Party can attend and make objections about the Order, i.e. if for example you serve a Third Party Debt Order on a Bank and there is no money in the Defendant's account, the Bank will oppose any Freezing Order.
Charging Orders
If the Defendant owns property either land or shares, it is possible to "register a charge" against the property to show that you have an interest in the sale proceeds.
Any charge obtained will not take priority over existing charges, such as Building Society mortgages.
The Court will initially grant a charging order known as an "Interim Charging Order". They will then allocate a hearing date where the Defendant and any other owners of the property can attend. If the Court considers that a Charging Order should be made they will make a "Final Charging Order".
Attachment of Earnings
If the judgment debtor is in employment and the debt is for in excess of £50.00, an "Attachment of Earnings Order" may be sought.
It is necessary to complete a "Request for Attachment of Earnings Order form" and pay a Court fee.
The Court will fix a hearing date and serve you and the Defendant with details of the hearing date. If the Judge is satisfied that the Defendant is not employed or self employed an Attachment of Earnings Order will not be made.
If the Attachment of Earnings Order is made then this requires the debtors’ employer to deduct a sum of money each week or month from the employee's salary and pay it into the Court.
Sending in the Bailiff/Sheriff(High Court Enforcement Officer)
A Bailiff will take "walking possession" of a debtor's assets and indicate that if the judgment debt is not paid within, say, a fourteen day period, he will return and take the debtor's assets, sell them at auction and then forward the net proceeds of sale to the judgment creditor. Bailiffs cannot seize living items such as bedding, clothing, pots and pans, furniture, household equipment or tools of trade. They cannot seize any goods on hire purchase or belonging to someone else.
In order to instruct the Bailiff, it is necessary to complete "A Request for Warrant of Execution" form and to pay a fee.
A Court Bailiff cannot force his way into the Defendant's home or business to seize goods. The HCEO, formerly Sheriff has much the same rights and restrictions however as he is paid on commission he has a vested interest in the recovery of the judgment debt. The HCEO can be instructed in respect of judgments over £600.00.
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