Hello
Would appreciated your thoughts.
After seven years of running my local garden business we've got to a point where we need to make a claim for lack of payment by a customer.
The person in question is a care home manager (small property as it's a converted detached residential house).
They originally contacted me directly just like a residential customer, but as they have used their care home email I'm a little unsure if the letter before action needs to be directed to the person or the care home company. I understand the process of small claims may be different if between a small business and a individual person, as opposed to a business to business claim.
Has anyone had this type of experience before?
Thanks
Pete
Views: 770
Replies
Yes, who did you invoice? You need to ascertain what is the legal entity of the business, is it a sole trader, a partnership or Ltd company? Before you start any recovery action. Have you got a written contract, makes it easier if you have. In our experience the small claims court is a waste of time, lengthy delays in the case being heard, you can waste your time by attending court at the allotted day/time only to sit there for hours only to find out the case is cancelled through lack of time. Even if you get judgement in your favour this will not make the debtor pay up. Forget it.
We have firstly used a solicitors letter to try and get settlement, after we've sent a letter before action by recorded delivery. Have you tried a friendly visit, phone call or letter? Unfortunately the debtor is in control and if they are determined not to pay or by arguing your work is not upto standard you'll have a battle.
All depressing stuff I know but some people know how hard it is for a small business to recover debts and make a habit of using this to their advantage.
You don't say the value of the debt but our 100% successfully method is a Statutory Demand, from memory I think it has to be over £750 . This you can do yourself think the forms are on gov.uk or a solicitor can do it for you, they have I think 21 days to pay up or challenge. If they don't you can issue winding up proceedings, the threat is usually enough for them to pay. Another option is to use a reputable firm of bailiffs which also has cost implications so you need to way up the cost/benefit implications.
It could be the case that they have no funds, in which case whatever you do is a waste of time. Worth putting your customers name into the companies House website this will show their legal entity and it's surprising what info it throws up, like CCJ,S accounts overdue etc.
Sometimes it's just not cost effective to pursue these debts and you have to put it down to experience with the positive that it's tax deductible!
As mentioned I would try to get a conversation started and see where it goes.
Anything else, please post and I'll do my best to help. Good luck!
For what its worth I agree with Peter, others will be along later to completely contradict us :)
Ony once in my 6 years of trading was I taken for a sum in the hundreds (£765 to be precise).. I seriously considered small claims et al. The hassle, process and general grind of it meant I just swallowed hard and moved on... making absolutely sure that any fellow trades people in the area knew the situation, so they didnt suffer the same. It turned out that the local locksmith and a decorator locally had both suffered the same fate with the same (ex) client.
Had a similar experience where I received a call to go and carry out maintainance to a property but no one was in , did the work anyway but couldn't put a name to the invoice .
Never got paid but it's easily done we can be too trusting .
Did you have face to face contact with the customer ? At least it's a starting point and a reason to contact them to ask who you make the invoice out to for clarification ,surely they cannot evade your enquiry it's a reasonable request and keep a record of your correspondence .
I found it was easy to make a claim when I was a self-employed but not-so-easy (or more expensive) when I became a limited company. It didn't so much matter who or what the defender was. That was a few years ago though and the Scottish Small Claims process is different.
Thanks for your replies everyone and particularly the detail.
I'm going to look at the small claims court, it's a very small amount but I have quite a lot of evidence of invoices, previous payments from them. Emails/texts etc. And also a signed quote so think it would be very easy for a magistrate to see how poorly organised they are at this local care home.
I think as the care home is part of a bigger organisation I will send a second copy of the letter before claim to their head office also.
I think it might generate a bit of unwanted attention on this local manager which might just be all that's needed.
Thanks for your replies
Pete
I have often found that a final letter saying something like; 'unfortunately we have not received payment for the outstanding amound due. Unless we receive payment within 7 days I shall have no other option but to proceed with court action without further reference to you', gets results.
Thanks Duncan, hopefully the next letter might achieve that result.
I would send a letter to both if you are not sure and require that in each case they both respond to advise if they or the other party is the responsible party and in the absence of any response you will name both in any court action.
For the individual you will need to follow the Preaction protocol for debt
https://www.justice.gov.uk/courts/procedure-rules/civil/pdf/protoco...
For the company then you can just use the general protocol (but following the debt protocol would not be a disaster).
Thanks I'll take a look at that.
It's painful to do but I'd just move on unless your thousands owed. Lost time and faf could cost you far more than you are owed
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