Debt recovery costs

David Tyler wrote:

Philip made an interesting point earlier regarding the wording of the legislation though, and it is clearly an area that needs clarification.

David

Not sure what clarification is needed. The wording of the legislation seems perfectly clear to me. For each time a debt becomes overdue claim £40/£70/£100.

Where, however, different debts become overdue on the same date (i.e. multiple invoices issued on the same date), then there is a valid argument that they became overdue at the same time, and so a 'consolidated' compensation entitlement would be payable rather than treating each invoice as different debts in calculating the amount due.


Philip

Hi there
I am currently dealing with a company that has successfully claimed per invoice and won 15 cases. There is no defence when it comes to late payment. As long as you have your bank statements and remittance advice slips to prove each invoice was late the company you are issuing against has no leg to stand on. If it is late it is late!
Use the county court small claims to issue your claim, it costs £108 though but these fees are claimed back. Keep your claims under £5,000 (inc your court fee) and issue as many as you like!
Hope this helps.

I would concur with Philip (and have successfully claimed against clients on this basis).

This point is highly relevant if your were for example seeking to claim interest and statutory charges on all late invoices issued and now paid over the past six years.

If your client has continually paid late over the period is it reasonable to claim say £40 on the last outstanding invoice or say £2,400 for say five years of monthly late paid invoices (eg. £40 x 12 months x 5 years) for which you have incurred substantial time and effort in the chasing and collection.

Ashley Smith wrote:

If your client has continually paid late over the period is it reasonable to claim say £40 on the last outstanding invoice or say £2,400 for say five years of monthly late paid invoices (eg. £40 x 12 months x 5 years) for which you have incurred substantial time and effort in the chasing and collection.

I'd go for claiming £2,400, explain the validity of the claim (always helpful to quote legislation), and then offer to reduce the claim to, say, £2,000 if paid within ten days.

Sending a copy of this document with your generous offer to write off £400 can help!


Philip

Ok folks,

1) The late payment act states it is £40 per invoice up to 999.99. £70 above this amount and £100 above £10,000

Each invoice is an individual debt.

The law is the law. My advice would be to claim for every single penny you can. But only do this if you don't intend on working for or getting any work off them again.

This is half the trouble, people do not use this law because they are afraid of the harm it could cause to future relations. The 1998 act was not enough it did not work, it was changed in 2002. Do you really think that being able to claim £40 on a debt total of 999.99 is going to be enough to make people pay on time? No its nothing and not worth the hassle of going to court for is it? £40 per invoice, that is the law.