Sector: Healthcare
Debt type Commercial
Debt amount: £3,500.00
Amount Recovered: £4,637.91.00
Costs to Client: £557.02
Brief
An NHS Trust instructed us to collect £3,500 from a commercial debtor who had failed to pay for a silver conference sponsorship package. At the point of our instruction by the Trust, no money had been repaid and we were supplied with a copy of the invoice sent by our client to the debtor.
We advised that we could add interest to the amount owed at a rate of 8%, plus the Bank of England base rate, otherwise known as ‘Late Payment Act’ together with the allowed Late Payment debt recovery fees. The interest on the debt at the time of instruction was calculated to be £593.68.
Solution
We discussed a wide range of recovery strategies with our client and we were subsequently instructed to commence a 30 day pre-legal collection strategy. It was agreed that we would send three letters to the debtor, accompanied by emails and telephone calls, however all forms of communication were ignored by the debtor.
For commercial debts, our standard practice is to obtain a company credit report to check the financial status of the debtor. This is vital in order to fully understand the financial health of the business. This process assesses whether or not the company is in administration, while also checking for other signs of poor financial health such as its credit score or County Court Judgments (CCJs) registered. The report highlighted that the business had four CCJs, but that it also had a contract limit of over £500,000 and was in good financial health. We uploaded the company credit report to our online Debt Manager so that our client could review the findings for themselves.
It was clear from the report that our clients should consider Court action to recover their money. We discussed the matter with our client and sought their instruction using our online Debt Manager system. Our client was keen to pursue the debt and instructed us to commence legal proceedings. We discussed the implications of legal action, how to enforce the Judgment once granted and cost implications – including recalculating the interest to be added to the value of the debt.
Compliance is crucial to us at every stage of debt recovery and we are regulated by the Solicitors Regulation Authority (SRA), which allows us to operate as a legal practice. As a result, we deal with all matters – pre-legal collections and litigation – in-house, saving clients valuable time and money.
Under the authority of our client, we obtained a company registered office report to ensure that the service of the Claim Form would be sent to the correct registered office address. We then issued the Claim Form and as soon as it was received and processed by the Court, the Claim Form was served. The debtor was given 14 days to respond to the Claim Form and at the same time, we advised the client that if no Acknowledgement of Service or Defence was received then they should apply for judgment by default – commonly known as a ‘CCJ’.
The debtor did not respond to the claim and we therefore applied for Judgment – which was granted. We discussed with our client the different enforcement processes which could be used to recover the debt. We advised them to use High Court Enforcement Agents (HCEA) to enforce the debt which in our experience, is a quick and efficient process in this situation. HCEAs provide detailed reports at each stage of their instruction and attendance and will carry out additional checks such as HP checks on vehicles. HCEAs also have the power to uplift and sell goods to the value of the debt. In addition to the Judgment amount, they are also able to recover additional interest and costs which ultimately are payable by the customer.
Our client authorised us to instruct the High Court Enforcement Agent – who visited the offices of the debtor company and successfully recovered all the debt as set out in the judgment.
We were delighted to see that our client managed to recover all the money owed as well as the accumulated interest, Court fees and fixed solicitors costs allowed by the Court.
