Legal issues
Core issues include contractual liability, identity of the contracting parties, payment terms, performance, set-off or counterclaim, limitation, interest and costs.
For qualifying business-to-business debts, the Late Payment of Commercial Debts (Interest) Act 1998 can provide statutory interest at 8% above the applicable Bank of England reference rate, plus fixed compensation of £40, £70 or £100 depending on debt size and, in some cases, additional reasonable recovery costs.
Evidence that matters
Useful evidence includes contracts, terms, purchase orders, quotations, invoices, statements, delivery notes, timesheets, completion records, emails, messages and admissions or promises to pay.
Reasonable lines of enquiry
Before escalation, identify whether the debt is genuinely undisputed, whether the debtor has raised defects, delay, set-off or counterclaim, whether the contract contains a dispute-resolution clause and whether there are assets or cash-flow indicators that make enforcement realistic.
Where records are incomplete, obtain the missing purchase order, delivery evidence, acceptance record, correspondence or ledger before issuing. A strong recovery file explains both why the sum is due and how it will realistically be recovered if judgment becomes necessary.
What happens next
A typical sequence is evidence review, letter before action, response or settlement, issue of a County Court money claim if necessary, judgment and then enforcement if payment is still not made.
Insolvency procedures such as statutory demands may be relevant to clear and undisputed debts, but they are not a substitute for ordinary civil proceedings where liability is genuinely disputed.
Immediate steps
Assemble the contract, invoices and proof of performance; confirm the debtor's exact legal identity and address; calculate the principal sum and any contractual or statutory interest; and preserve all admissions, complaints and settlement proposals.
What should you send us?
Send the contract or terms, purchase order, invoices, statement of account, proof of supply or completion, correspondence about payment or complaints, debtor details and a schedule showing the amount claimed.