BUSINESS DEVELOPMENT 26 images FEBRUARY 2022 How can my business collect a debt? C ollecting debts is one of the less appealing jobs that inevitably has to be taken on at various points in the life of any business. The courts are there as an option, but it is preferable to regard that as a last resort. A better route to embark on in the first instance is to approach the other party by making a ‘lighter’ contact to say that this invoice/debt is outstanding, and while you understand that times are hard, would there be a possibility of paying it off by instalments? If they are amenable and accept that the money is outstanding, you can then negotiate a regular payment that would be acceptable to both parties. Remember, ultimately, a court would ask the debtor that very same question: “How much can you afford to pay monthly?” Pre-action protocol For the ‘light’ touch to be effective, negotiation is the key, but if this doesn’t work, then you have the option to institute court proceedings. The first step is to give the other party as much notice as possible that you are owed this money and to ask for payment. There is a ‘pre-action protocol’ that you must do before any court proceedings are commenced, which is otherwise referred to as a ‘letter before action’, which must state who you are and why you are asking for the debt to be paid. It could be money owed for services rendered and an unpaid invoice or it could be for not fulfilling a contract. Whatever the reason is, you must put all the relevant details in a letter and include with it any evidence such as a fee invoice that you submitted, or a copy of a contract signed by both parties, etc. The letter should also give the other party a timeframe in which to respond, whether that is making the payment in full or making contact to negotiate how to pay it off. The letter should make it clear that you are open to discussion, but that if you have not had a response by the chosen date then you may decide to commence legal proceedings without further notice. You should always ensure you have sufficient evidence and reason for taking court action before you commence a claim. Court fees Starting court proceedings can be done online if it is a fairly straightforward small claim without complications. And online fees to do so are slightly less than sending in paper versions. The fees go on a sliding scale dependent on how much is owed. For example, for claim amounts from below £300 up to £1,500, the court fee is between £35-£70 if you issue online – a little more if not. Claims worth over £1,500 up to and beyond £10,000 cannot be issued online and the fees range from £110 to 5% of the claim for any that are over £10,000. The claim form should be completed and usually once stamped by the court, a copy gets sent to the other party, a copy is kept by the court, and you get the third copy. The court usually sends the issued claim form to the other party (the defendant) with a response pack containing a number of documents and information on the options that the defendant can choose: to pay the debt in full, to acknowledge service of the claim form and indicate that they want to defend, and various other options. However, whatever the defendant decides to do, they must contact the court within 14 days. If they fail to do this, you may have the right to get a default judgment against them. Further details on how to make a claim and the fees can be found at claim-for-money/court-fees. Although the small claims system is relatively straightforward, if you feel you need assistance you can always call upon the services of a paralegal who will be able to help you at a reasonable cost. You can locate one on the National Paralegal Register: www. paralegal-register. It’s worth noting that even if a court agrees that someone owes you money and that they must pay it, that doesn’t automatically mean you will receive the money. You may need to enforce the judgment and this can require additional time, money and court paperwork. Expert advice on the business of running a garment decoration company Q&A Amanda Hamilton is the chief executive of the National Association of Licensed Paralegals (NALP), a non-profit membership body and the only paralegal body that is recognised as an awarding organisation by Ofqual, the regulator of qualifications in England. Through its centres, accredited recognised professional paralegal qualifications are offered for a career as a paralegal professional.