As lawyers ourselves, we understand that it is now more important than ever to get debts paid promptly, but chasing clients for payment can be time consuming and delicate.
Shona is the ideal choice for helping family law firms recover debts: she’s an expert in debt recovery, well-versed in the nature of family law practices and a pleasure to work with.
Kerry Mordey, Director at Hopkins Law
Whether you’ve found yourself grappling with a single tricky debtor or you’ve lost control of your debt recovery, here are some of the pitfalls you should try to avoid:
Make sure you’re confident about the sum owed
The client care letter (retainer) / terms of business / funding agreement such as a Conditional Fee Agreement and a Deferred Fee Agreement should be scrutinised to ensure for the avoidance of doubt that the debt alleged to be owed by the debtor/client is actually owed. These documents should also be reviewed, along with any other relevant correspondence, to ensure that the precise value of the debt is known. Creditors/you should also check and keep in mind current legislation to make sure that there are no legally binding provisions absolving the debtor/client from having to pay the debt either in full or in part.
Keep things professional
Animosity between parties only increases the likelihood of debts not being paid. It is always important to stay professional and polite when corresponding and communicating with debtors/clients and to avoid any behaviour that could be deemed confrontational.
Don’t wait and hope
In our experience, prompt action increases the likelihood of an early recovery and so you should not delay in seeking to recover a debt and instead make sure you contact debtors/clients as soon as a debt/invoice becomes due. Failure to act quickly could result in debts/invoices becoming forgotten and money that was set aside for debts/invoices being spent elsewhere.
- a starting point is to prepare and send a ‘letter before action’ setting out the what the debt is believed to be and why it is considered that the debt is now owed – if possible you should send documentary evidence in support. Such as a copy of your client care letter, terms of business, any funding agreement you may have in place, copy invoices and a statement of account.
- we can draft and send this letter on your behalf.
Accept you may have to compromise to make progress
You should keep an open mind and be prepared to negotiate when it is reasonable and cost-effective to do so. For example, if a debtor/client proposes new payment terms as a way of paying the debt/invoice, you should give those terms due consideration if they are not wholly unreasonable and will ultimately result in the debt/invoice being paid.
Keep your client data up to date
It is important for you to ensure you an up to date address for the debtor/client. Problems can occur further down the line with service of court papers or general communication if you have a mistaken belief as to the correct address of the debtor/client. If needed, tracing agents can be instructed to assist with this step.
Knowledge is power
If a tracing agent is instructed, it is important that those agents are given as much information as possible about the debtor/client to give the tracing process the greatest chance of success.
Issuing court proceedings isn’t to be avoided
You should not be afraid or perturbed by the prospect of having to issue court proceedings in order to recover a debt/invoice. Starting court proceedings is a strong indication that you are serious and fully committed about recovering a debt, Furthermore, if successful in recovering the debt following the commencement of court proceedings, you are usually entitled to claim all incurred court fees back from the debtor/client.
There are many ways to get the debt paid
As an alternative to court proceedings, you may wish to consider insolvency proceedings as a means to recover a debt. This can include
- service of a statutory demand
- service of a winding up petition
- presentation of a bankruptcy petition.
We can advise on the pros and cons of all methods of recovery and advise on how best to proceed under the individual circumstances of a particular claim.
Getting lawyers involved saves money and time – and enables you to get on with business
Legal representation should be given careful consideration. Whilst legal representation will inevitably result in fees being incurred, those fees can sometimes be recovered as part of the debt claim. Our experience shows us that serious mistakes can frequently be made by unrepresented creditors (known as ‘litigants in person’) even if creditors do not intend to stay unrepresented for the totality of the claim. Such mistakes can be costly and time consuming to resolve.
If you’d like our help, we can assist with everything from chasing a problematic single debt to acting as your outsourced credit control team – from pre-action to enforcement, we successfully help firms like yours to get their bills paid.
By using our experienced team and our bespoke systems, we can help you to recover your money as quickly and cost effectively as possible whilst ensuring we protect your existing relationships.
Our team of debt recovery solicitors at Francis Wilks & Jones is one of the best in the country. We regularly assist law firms nationwide to recover their debts. Whatever the debt, we can help you to get it paid quickly and cost effectively. Please contact us to discuss how we can help you.
FWJ is a very efficient and experienced firm of litigators. Always a pleasure to deal with.
Frank Ryan, Director – Head of Litigation at Vardags
