Recover Money Owed to Your Business
If money is owed to a TETLI Member, the Institute expects that (as a minimum) this reasonable procedure is followed.
The first measure is to correspond with the client and send a reminder after 7 days, a further reminder at 14 days, followed by a final reminder after 21 days. Follow the final reminder up by a phone call to establish the reason why the debt remains due and owing.
Once the above process has been completed, the debt recovery phase commences.
Litigating in person should be considered and should the matter be take to the Small Claims Court it will be cost effective. In all matters the Institute expects a letter to be written to the other party entitled “a letter before action”. The letter should set out the reasons why the money is owed and the consequences the client will face if the account is not settled amicably.
If the owed money owed is less than £10,000, the Small Claims Court can be used to recover what is owed. Should the matter exceed £10,000 then the case would be delivered in either 'fast track' or 'multi track' and ought to consider advice and from a qualified TETLI Member or other (qualified) solicitor.
Note: part of the County Court, the Small Claims Court was originally created to enable a layperson (i.e. someone who is not legally qualified) to take another individual to court. The process is relatively simple, and you can do it yourself; you don’t need to engage a solicitor to help you. There are fees involved, so do consider this before you take action, it might will be wise to try again to settle the matter.
If there is beilef that TETLI can offer assistance, please make contact and other options may be explored.
At this early part in the proceedinsg it’s also wise to deliver a Part 36 Offer to ensure that you protect your costs which will also show to the court that you were being reasonable and from the outset. In most cases these fees can be added to the claim, however experience shows they are seldom fully recovered, even if the initial debt is paid.
The Mediation Process
Instead of going to court mediation should be considered with which TETLI can often assist. The process can be completed over the phone which may save time, significant costs and curtail the disruption should the matter be litigated.
A charge of 10% (subject to a minimum of £500 plus vat) is payable to TETLI for this service.
Mediations usually take place over the phone and TETLI will not take up a position as the judge. The job is to help negotiate a resolution between the TETLI Member and the client. If an agreement cannot be reached, then either participant can take the matter to court. Mediation can be useful as both parties are communicating, just not agreeing.
If mediation fails, or the time limit for the payment (as stated in the ‘protocol’ letter) has passed, the next step will be to complete a Claim Form N1. This can be done online, or downloaded, printed, completed and then posted.
Enforcing a Judgment with a TETLI Member
Once the judgment is received it is important that the opponent is contacted and it should be explained to them what will happen should they fail to pay. If the opponent still does not pay, it is time to consider enforcing the judgement.
This will incur another fee and it’s worth considering whether the defendant is likely to have any assets worth seizing. When enforcing a judgement and any contentious action a TETLI Member should act reasonably at all times to preserve reputation and the reputation of the Institute.