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Excessive delays in the County Court,  How to Avoid having to take Court Action to get paid

Techniques to avoid legal action

If you have used the County Courts to get a debt paid over the last 12 months, you will be aware the Courts have centralised a lot of the local courts functions resulting in an extensive backlog which,  in our experience has resulted in our Client’s debtors becoming insolvent and unable to pay their debts when a claim gets anywhere near a hearing when they may well have had the ability to pay before these changes took place.

Not only is there an allowance of up to 20 weeks for a court to respond to a request/update/application but also you are no longer able to speak to the individual court directly and have to email any request in.

On the converse side, when a judgment is obtained in default, (the debtor didn’t respond to the claim so the Claimant is able to enter Judgment) which in our experience has sometime been due to a court error due to their backlog, a debtor is having to wait up to 6 months with a CCJ against them which may be incorrect. Defore centralisation

Even before the current backlogs, CMG UK always recommended trying all avenues when negotiating payment from customers, and this tactic is all the more necessary now that taking legal action may be hindered by delays. The key to successful negotiating relies on a number of pre-determined factors that your business should consider:

Terms and Conditions

Your business must have terms and conditions that are adequate for the business; we have come across many SMEs that have had no T&Cs to protect themselves from things such as:

  • Penalties for late delivery of goods or services
  • Consequential loss
  • Retention of title

Fully adequate terms can protect a business from these aspects, but there are also conditions you can place into your T&Cs to encourage payment:

Payment Terms

Often 30 days is a reasonable time span to receive payment from your customers. You may feel that 14 days is more suitable for your business or be willing to give longer than 30 days, but we do warn you that you should ensure that your payment terms do not put your company’s cash flow at risk. It is UK custom and practice to pay end of month following the month of invoice. If you would like payment on shorter terms, make sure your customer is fully aware at the outset of contract discussions.

Interest on Late Payment

Although you may have set payment terms in your contract, you may find that customers don’t stick to them and you are left with a growing pile of unpaid invoices which in turn will affect your cash flow. To counteract this it is always a good idea to state within your terms and conditions that you will add interest to any late payments. Late Payment Legislation allows you to charge interest at 8% above the Bank of England base rate for invoices that have exceeded 30 days and compensation and additional collection costs.


If you intend to rely on your terms & conditions for negotiation or when going to court, if necessary, you will need to be able to adequately demonstrate acceptance.  There are a number of ways acceptance can happen:

Written Acceptance

This is the most effective form of acceptance you can receive; in large part due to the fact that you can clearly evidence that your T&Cs have been read and have been agreed.

Verbal Acceptance

This is much harder to prove, we would recommend if any contract has been verbally accepted to write up the conversation in an email to your customer.

Acceptance by Conduct

The most common form of acceptance, you don’t necessarily need to have a signature.

However acceptance by conduct can work both ways, make sure you don’t inadvertently accept customers’ terms and conditions by conduct.

CMG UK’s Managing Director Jenny Esau states ‘companies should always have a process to ensure proof of acceptance is received and a process for dealing with customers’ T&Cs when they are received. ‘

When a dispute arises with a customer you can show how professional you are by producing this evidence along with a well-reasoned statement as to why payment is due.  This will also ensure you have complied with pre action protocols, should your negotiations be unsuccessful. I would also add, be aware that the burden of proof is on the claimant (you) to prove a claim.

Start with the possible end in mind

I often tell our Clients that everything they do from first contact with a potential customer will affect their ability to get paid. With all discussions,  negotiations,  resolution of disputes and credit control  actions, always think “if I have to go to court, will I be able to successfully prove my claim’

Letter Before Action

Rather than send a basic, template letter requesting payment tailor each letter to the circumstances of that particular debt & customer.  If you ensure such a letter not just shows the outstanding debt but also informs the debtor of the contract terms you intend to rely on and any other evidence to support your claim such as discussion where you have resolved a dispute but the debtor still hasn’t paid, you are more likely to pen negotiations for settlement.

The most common delaying tactic is “I haven’t got your invoices, send me a copies”  even if you have sent many copies previously, include them again in the LBA to reduce further delays.

How we can help

Our aim is to provide services that enhance a business’ credit management function so that it works effectively for them, our services include:

Outsourcing – We have a considerable amount of experience in carrying out our outsourced collections for recruitment companies, dealing in both temporary and permanent placements. We become the virtual credit control department for a company; chasing for payment in our client’s name, improving collection performance and reducing their debtor days significantly.

Support – Our low cost support service provides telephone and email advice, credit risk reporting and monitoring, as well as access to our online toolkit.