Author Archives: Diane Bantten

effective credit control

Effective Credit Control

I have read some quite shocking reports recently regarding just how much debt is written off by businesses. It does beg the question as to whether (OR NOT) businesses have an effective Credit Control procedure in place.

Credit Control is the life blood of any business

Credit Control isn’t considered by many to be important.  Most business will focus on producing the product or providing the service, which is important, of course.  That said,  Credit Control is the life-blood of any business and must be treated as paramount. If you give your customers/clients terms then you must have controls in place to ensure that monies owed to you are being paid in a timely fashion.

Too many businesses are reactive rather than proactive. Our top tip is to be ahead of the game – sending out a statement once a month as a reminder is simply not good enough. Get your credit controller making those calls and establish a rapport with your clients. They won’t mind getting a follow-up call regarding payment and when it might be received. You should not be embarrassed about asking for monies owed to you – you have earned it and your client will admire you for your Accounts Department’s efficiency.

Debt Recovery Protocol

Government Guidelines:-

1 INTRODUCTION 1.1 This Protocol applies to any business (including sole traders and public bodies) claiming payment of a debt from an individual (including a sole trader). The business will be referred to as the “creditor” and the individual will be referred to as the “debtor”. This Protocol does not apply to business-tobusiness debts unless the debtor is a sole trader. 1.2 The Protocol describes the conduct the court will normally expect of those parties prior to the start of proceedings. It includes a template Information Sheet and Reply Form to be provided to debtors in all cases. 1.3 The Protocol is intended to complement any regulatory regime to which the creditor is subject. To the extent that compliance with this Protocol is inconsistent with a specific regulatory obligation (such as a principle, rule or Civil Procedure Rule Committee Pre-Action Protocol for Debt Claims Consultation 2 November 2015 – 11 January 2016 – 2 – guidance contained in the Financial Conduct Authority’s Handbook) that regulatory obligation will take precedence. The Protocol should also be read in conjunction with industry and government guidance relating to good practice in the recovery of debt. 1.4 The Protocol does not apply where the debt is covered by another Pre-Action Protocol such as Construction and Engineering or Mortgage Arrears. 2 AIMS OF THE PROTOCOL 2.1 This Protocol’s aims are to – (a) enable the parties to resolve the matter without the need to start court proceedings, including considering using an Alternative Dispute Resolution (ADR) procedure or agreeing a reasonable repayment plan; (b) encourage early exchange of sufficient information about the matter to help clarify the issues in dispute; (c) encourage the parties to act in a reasonable and proportionate manner in all dealings with one another (which includes only incurring costs which bear a reasonable relationship to the sums in issue); (d) support the efficient management of proceedings that cannot be avoided. 3 INITIAL INFORMATION TO BE PROVIDED BY THE CREDITOR 3.1 The creditor should send a Letter of Claim to the debtor before proceedings are started. The Letter of Claim should – (a) contain the following information – (i) the amount of the debt; (ii) whether interest is continuing; (iii) where the debt arises from an oral agreement, who made the agreement, what was agreed (including, as far as possible, what words were used) and when and where it was agreed; Civil Procedure Rule Committee Pre-Action Protocol for Debt Claims Consultation 2 November 2015 – 11 January 2016 – 3 – (iv) where the debt has been assigned, the details of the original debt and creditor, when it was assigned and to whom; (v) if regular instalments are currently being offered by or on behalf of the debtor, or are being paid, an explanation of why a court claim is being considered; (vi) details of how the debt can be paid (for example, the method of and address for payment) and details of how to proceed if the debtor wishes to discuss payment options; (vii) the address to which the completed Reply Form should be sent; (b) do one of the following – (i) enclose an up-to-date statement of account for the debt; (ii) enclose the most recent statement of account for the debt and state in the Letter of Claim the amount of interest incurred and any administrative or other charges imposed since that statement of account was issued, sufficient to bring it up to date; or (iii) where no statements have been provided for the debt, state in the Letter of Claim the amount of interest incurred and any administrative or other charges imposed since the debt was incurred; (c) where the debt arises out of a written agreement, enclose a copy of that agreement, unless providing the agreement is disproportionately burdensome to the creditor; (d) enclose a copy of the Information Sheet and the Reply Form at Annex 1 to this Protocol; and (e) enclose a Statement of Means form (an example Statement of Means is provided in Annex 2 to this protocol). 3.2 The Letter of Claim should be clearly dated toward the top of the first page. It should be posted either on the day it is dated or, if that is not reasonably possible, the following day. Civil Procedure Rule Committee Pre-Action Protocol for Debt Claims Consultation 2 November 2015 – 11 January 2016 – 4 – 3.3 The Letter of Claim should be sent by post. If the creditor has additional contact details for the debtor, such as an email address, the creditor may also send the Letter of Claim using those details. If the debtor has made an explicit request that correspondence should not be sent by post, and has provided alternative contact details, the creditor should use those details when sending the Letter of Claim. (Note that a condition in a creditor’s standard terms does not constitute an explicit request.) 3.4 If the debtor does not reply to the Letter of Claim within 30 days the creditor may start court proceedings, subject to any remaining obligations the creditor may have to the debtor (for example, under the Financial Conduct Authority’s Handbook). Account should be taken of the possibility that a reply was posted towards the end of the 30-day period. 4 RESPONSE BY THE DEBTOR 4.1 The debtor should use the Reply Form in Annex 1 for their response. The debtor should request copies of any documents they wish to see and enclose copies of any documents they consider relevant, such as details of payments made but not taken into account in the creditor’s Letter of Claim. 4.2 If the debtor indicates that they are seeking debt advice, the creditor must allow the debtor a reasonable period for the advice to be obtained. In any event, the creditor should not start court proceedings less than 30 days from receipt of the completed Reply Form or 30 days from the creditor providing any documents requested by the debtor, whichever is the later. 4.3 If the debtor indicates in the Reply Form that they are seeking debt advice that cannot be obtained within 30 days of their reply, the debtor must provide details to the creditor as specified in the Reply Form, and the creditor must allow reasonable extra time for the debtor to obtain that advice. 4.4 Where a debtor indicates in the Reply Form that they require time to pay, the creditor and debtor should try to reach agreement for the debt to be paid by instalments, based on the debtor’s income and expenditure. In trying to agree affordable sums for repayment, the creditor should have regard where appropriate to the provisions of the [Common] / [Standard] Financial Statement or equivalent guidance. If the creditor does not agree to a debtor’s Civil Procedure Rule Committee Pre-Action Protocol for Debt Claims Consultation 2 November 2015 – 11 January 2016 – 5 – proposal for repayment of the debt, they should give the debtor reasons in writing. 5 DISCLOSURE OF DOCUMENTS 5.1 Early disclosure of documents and relevant information can help to clarify or resolve the issues in dispute. On that basis, where any aspect of the debt is disputed (including the amount, interest, charges, time for payment, or the creditor’s compliance with relevant statutes and regulations), the parties should exchange information and disclose documents sufficient to enable them to understand each other’s position. 5.2 If the debtor requests a document or information, the creditor must – (a) provide the document or information; or (b) explain why the document or information is unavailable, within 30 days. 6 TAKING STEPS TO SETTLE THE DISPUTE AND ALTERNATIVE DISPUTE RESOLUTION 6.1 If the parties still cannot agree about the existence, enforceability, amount or any other aspect of the debt, they should both take appropriate steps to resolve the dispute without starting court proceedings and, in particular, should consider the use of an appropriate form of Alternative Dispute Resolution (ADR). 6.2 ADR may simply take the form of discussion and negotiation, or it may involve some more formal process such as a complaint to the Financial Ombudsman Service where the dispute concerns a debt regulated under the Consumer Credit Act 1974. 6.3 In some cases, especially where the debt is large, mediation (a third party facilitating a resolution) might be appropriate. Details of registered mediation providers can be obtained from the Civil Mediation Provider Directory at The potential costs of mediation should be considered in relation to the amount of the debt. Civil Procedure Rule Committee Pre-Action Protocol for Debt Claims Consultation 2 November 2015 – 11 January 2016 – 6 – 6.5 Where the parties reach agreement concerning the repayment of the debt, the creditor should not start court proceedings while the debtor complies with the agreement. 7 COMPLIANCE WITH THIS PROTOCOL 7.1 If a dispute proceeds to litigation, the court will expect the parties to have complied with this Protocol. The court will take into account non-compliance when giving directions for the management of proceedings. The court will consider whether all parties have complied in substance with the terms of the Protocol and is not likely to be concerned with minor or technical infringements, especially when the matter is urgent (for example an application for an injunction). 7.2 For further information about the court’s approach to compliance, see Practice Direction – Pre-Action Conduct and Protocols (paragraphs 13 to 16). 8 TAKING STOCK 8.1 Where the procedure set out in this Protocol has not resolved the dispute between the debtor and creditor, they should undertake a review of their respective positions to see if proceedings can be avoided and, at the least, to narrow the issues between them. 8.2 Where the debtor has responded to the Letter of Claim but agreement has not been reached, the creditor should give the debtor at least 14 days’ notice of their intention to start court proceedings, unless there are exceptional circumstances in which urgent action is required. Civil Procedure Rule Committee Pre-Action Protocol for Debt Claims Consultation 2 November 2015 – 11 January 2016 – 7 – ANNEX 1 INFORMATION SHEET You have received this notice because a business intends to take you to court in relation to a debt. This notice tells you about your rights and what to do next. Please read it carefully. Why have I received this notice? You have received this notice because a business believes you owe it money. The business intends to take you to court to make sure the money is paid. Before the business can take you to court, it must send you a letter along with this notice. What should the letter from the business say? The letter from the business should give you the following information:  The amount of money the business thinks you owe.  Information about interest and fees added to the debt. This might be shown in an updated account statement.  Details of how to pay the debt and how to discuss payment options. The letter from the business might give you the following extra information, depending on whether it is relevant to you:  If you have offered to make payments, an explanation of why the business still wants to take you to court.  If the debt has been passed from one business to another, details of your original debt and details of the debt’s transfer to the new business.  If your agreement to pay the debt was not written down, information about your spoken or “oral” agreement. The letter should also enclose a copy of a Reply Form for you to fill out. Finally, the business might have sent you a copy of your written contract that sets out your agreement to pay the debt. You should check that the letter from the business contains all the relevant information.


The bankruptcy threshold will increase to £5,000 for creditors’ bankruptcy petitions presented after 1 October 2015 as set out in the Insolvency Act 1986 (Amendment) Order 2015. Should a bankruptcy petition be presented prior to this date, the current minimum bankruptcy level of £750 will apply. Whilst debtors will welcome the move, creditors wishing to enforce a debt which is less than £5,000 should act now in order to benefit from the current bankruptcy threshold.

Without Prejudice or not????

“Without prejudice” letter admissible if no dispute when written.  I attribute this information to McIntosh – Law Blogs posted originally 27.10.2014

The High Court has reconfirmed that letters and emails can be relied upon at trial regardless of their containing the heading “without prejudice” if at the time they were written there was no dispute between the parties. Avonwick Holdings v Webinvest (2014) concerned a loan agreement. Two years after it took the initial loan, the borrower sought to renegotiate the loan agreement. Those discussions proceeded slowly. In early 2014, the lender served on the borrower demands under the loan agreement and Statutory Demands. The borrower did not dispute the validity of the
demands or its liability to repay the loan. At about the same time, the lender’s accountants and solicitors sent to the borrower “without prejudice” communications which set out the terms on which the lender was prepared to restructure the loan, and the borrower responded in communications that were similarly headed. On no agreement being reached on restructuring, the borrower sought to restrain the insolvency proceedings threatened by the lender. It was only at that point that the borrower alleged that its obligation to repay the loan was subject to an oral condition that had not been satisfied. The lender denied that the alleged condition had even be agreed or discussed. It
sought to put forward the early‐2014 “without prejudice” communications in support of its denial. The borrower objected to those communications being put before the Court on the basis that they were privileged due to their heading. The Court said that, for a document to be inadmissible on the ground that it was “without prejudice”, it had to form part of a genuine attempt to resolve a dispute. There needed to be both a genuine dispute to be resolved and a genuine attempt to resolve it. If there was no dispute about a liability, but only a negotiation as to how and when it should be discharged,
the negotiations and documents produced in the course of them were not covered by the “without prejudice” exception to the admissibility of relevant evidence. The express marking of documents as “without prejudice” was a highly material factor in determining their status and was a strong indicator that there was a genuine dispute and a genuine attempt to settle, but it was not conclusive. This was so even if experienced litigators were involved as, on the evidence, it might be seen that they made a mistake. The Court found that, at the time of the early-2014 communications, there was no dispute about the liability of the borrower which dispute had only arisen later. It said that communications made at a time when there was no dispute could not, with retrospective effect, be made subject to the without prejudice privileg.

Love is Pooling Resources – Article by Graham Down – Burton Sweet and worth a read!

Love is …. pooling finances?
A recent case has raised issues which may have far-reaching and important consequences on the finances of one spouse in the event of the bankruptcy of the other.
The question which arose in the recent case of Lemon & Wood v Chawda concerned a residential investment property jointly owned by Mr and Mrs Chawda since it was purchased in 1995. Both before and after Mr Chawda’s bankruptcy in November 2011, the rental income had been shared equally between them. In 1999 the property had been remortgaged in 1999 to raise £80,000 to enable Mr Chawda to buy a business premises jointly with his brother. Mrs Chawda claimed that she had no interest in either the business premises or the business (a mobile phone business) itself. Consequently she claimed that, under the principle of equity of exoneration, the £80,000 should have been repaid out of the husband’s share, leaving her with a greater share of the equity.
The leading case on exoneration was Re Pittortou, a 1995 case in which the judge said that exoneration depended on the intention of the parties. In essence, it applied in cases where a spouse joined in a charge over jointly-owned property for the purposes of the bankrupt, and the money was borrowed and used for the bankrupt’s sole benefit.
In the Chawda case, the Court found that, where a husband and wife had pooled their resources and enjoyed a prosperous lifestyle as a result of the bankrupt’s business, then it would be artificial for one spouse to take the benefits of that business whilst trying to enforce the individual right of exoneration. Mr and Mrs Chawda had administered their affairs jointly, which made it impossible to establish who had financed what. It followed that exoneration did not apply, and Mrs Chawda was not entitled to any more than a 50% interest.
This decision means that, in a modern society where husbands and wives tend to pool their resources and enjoy a lifestyle on the back of the other’s income, there are few circumstances where exoneration will apply.
At Burton Sweet Corporate Recovery we have experience of both sides. Earlier this year we successfully argued that exoneration applied, in a case where the husband and wife had kept their financial arrangements separate. Clearly this is a complex area, and advice should be taken on a case by case basis.
This publication is for general information only. It is not suitable for specific advice which should be sought for specific cases. Although we endeavour to provide accurate information, there is no guarantee that such information is accurate at the date it is provided, nor that it will continue to be accurate in the future. We cannot accept

Excuses Excuses Excuses!

10 Late Payment Excuses…

 “I can’t afford to pay you until my customer has paid me – This is a tad tricky; can your customer make an acceptable immediate part payment? You need to pin your client down; insist on an immediate part payment and then suggest a review in 2 weeks’ time.

“The cheque is in the post” Oh that old chestnut it keeps cropping up doesn’t it! Explain it has not been received and should it ever arrive you will destroy, then provide your bank account details and ask for an electronic bank transfer.

“I’m not paying I have a dispute” If there is a genuine dispute then its imperative you establish what the dispute is and whether its genuine or bogus.

“I haven’t received your invoice” Scan it in to your computer and e mail it to your customer whilst asking for an electronic payment.

“I sent the invoice back to you it didn’t bear the right purchase order number” Ensure that you get your documentation right first time so as to remove this as an excuse. If you receive purchase orders PLEASE PLEASE PLEASE read the small print. Make sure your invoice bears the correct info and is addressed to the right person/company – if in doubt telephone the customer upon receipt of their order to double check.

No one here to sign a cheque” ask for a BACS payment

The Director/Owner has died” Ok very very occasionally this may have tragically happened and although sad you still need your money! If the firm was a sole owner then the business has ceased, however, it may continue to be run by a relative in effect taking over the reigns. In law you may have a claim against the Estate however, you may wish to consider your position and take legal advice depending upon the size of the debt.

Late Payment Legislation changes

Posted by diane.bantten


Listen up …. some good news for businesses.  Late Payment legislation has at last been updated as from 16th March 2013.

The Late Payment of Commercial Debts (Interest) Act 1998 has been updated with effect from 16 March.

What has changed?

The Act continues to apply to contracts for the supply of goods or services where the customer is either a business or public authority and still imposes a statutory rate of interest of 8% over Bank of England Base on late payments unless the parties have agreed a ‘substantial remedy’.  However the Act has been amended so as to:

  • impose maximum payment periods;
  • limit the amount of time a purchaser has to verify goods or services; and
  • increase the amount of payment enforcement costs a supplier can recover.

These changes only apply to contracts under which statutory interest is accruing (ie if there is not a ‘substantial remedy’ under the relevant contract).

The maximum payment period

In a contract where the customer is a public authority the parties can agree a date for payment of up to 30 days from the latest of the customer:

  • receiving the goods or services;
  • receiving the supplier’s invoice; or
  • verifying that goods or services conform to the contract.

If the customer is a business, the payment period can be up to 60 days after the latest of the events listed above. The period can also exceed 60 days but only if expressly agreed by the parties and if it is not ‘grossly unfair’ to the supplier.

The maximum verification period

The Act limits the amount of time purchasers have to verify the conformity of goods or services to 30 days, unless the parties expressly agree a longer period and that period is not ‘grossly unfair’ to the supplier.  Longer periods may be appropriate in particularly complex contracts.

Recovery of costs

Suppliers were already able to claim a fixed sum of between £40-£100 (dependent on the size of the debt) under the existing legislation to compensate them for the costs of recovering late payments.  The changes introduce the additional right for a supplier to claim the difference between the reasonable costs it incurs in debt recovery for example when you instruct Acquit Debt Recovery! Any unreasonable attempt to exclude either the fixed sum or top-up costs will fail.


Posted by diane.bantten

For as long as I can remember the Small Claims limit or ceiling has been £5,000.00 – it is about to change.

From the 1st April 2013 the upper limit for claims in the small claims track will increase to £10,000.00.     The general rule for small claims is that even if you are successful if your claim it is not possible to get an order for the other party to pay your legal costs when you’ve gone to the expense of instructing a firm of Solicitors.

You should make sure that you have a clause in your terms and conditions of business that covers costs incurred in pursuing payment i.e. in the event that it is necessary to incur an agents fee in pursuance of payment then you will be entitled to add that amount to the claim.

For more information don’t hesitate to contact someone at Acquit who will be happy to go into more detail.

Enforcement in Scotland………

Posted by diane.bantten

Enforcing a Judgment in Scotland

If you are contracting with a business in Scotland you may not recognise that as far as
the law is concerned you are dealing with a company in a different country!

When there’s a problem and the clients need action raised, they can be surprised to be told.
Even sophisticated clients who have been through the courts in England many
times over may never have seen the inside of a Sheriff Court or consulted an Advocate at Parliament Hall or litigated in the Court of Session.

Acquit can help you prepare the legal documentation to issue a claim against a company in
Scotland but it is important to be aware that once Judgment has been obtained
there will be some hoops through which you/we will have to jump!

Ok, so for the technical part …..

The basis for the procedure is section 18 of, and paragraph 2 of Schedule 6 to, the Civil Jurisdiction and
Judgments Act 1982 and CPR 74.17. You need to apply under CPR
74.17 for a certificate of money provision by filing, at the court where the
judgment was given or has been entered:

1. An application, which should be by Form N244, in appropriate terms, stating
that the judgment remains unsatisfied and applying for the issue (by virtue of
the relevant provisions of the 1982 Act and CPR 74.17) of a certificate of
judgment to register for enforcement in Scotland.

2. Written evidence (complying
with Practice Direction 32) stating:

(a) the name and address of
the judgment creditor and, if known, of the judgment debtor;

(b) the sums payable and
unsatisfied under the money provisions of the judgment;

(c) where interest is
recoverable on the judgment, either –

(i) the amount of interest
which has accrued up to the date of the application, or

(ii) the rate of interest, the
date from which it is recoverable, and the date on which it ceases to accrue;

(d) that the judgment is not

(e) the date on which the time
for appealing expired or will expire;

(f) whether an appeal notice
has been filed;

(g) the status of any
application for permission to appeal; and

(h) whether an appeal is

3. A draft certificate in Form 111 .

4. Once you have the
certificate, we would instruct a Scottish Agent to deal with enforcement.

So, is your mind blown, shall we take the strain for you …. visit  or just call us for an informal chat.

County Court Judgment some statistics!

Posted by diane.bantten

The number and value of county court judgments (CCJs) against businesses in England and Wales dropped in the first half of 2012, according to the Registry Trust.

The latest figures showed that the total value of debt judgments continued to decline, down 5.4%, or £15.8m lower than the total for the first half of 2011.

In the first six months of this year, businesses were ordered to repay debts worth £276.1m, compared with £291.9m in the same period the previous year.

The non-profit Registry Trust, which operates the register of judgments, orders and fines for England and Wales, revealed that a total of 65,022 judgments were issued against businesses in the first half of this year.Businesses faced 7,074, or 9.8% fewer CCJs in 2012, compared to the first six months of 2011, when there was a total of 72,096 judgments.

According to the organisation, the figures depict a longer term trend, with the number and value of CCJs against companies having been decreasing since 2009, when 116,633 CCJs worth £510.1m were recorded.

Statistics from Northern Ireland showed that the total value of default and small claims judgments issued against businesses and consumers in the first half of the year was 4.7% lower than the same period in 2011, down from £11.5m to just under £11m.

Despite a three-year decline in the value of judgments for debt in Northern Ireland, the number of judgments increased by 5.6% to 4,975, from 4,713.

There were 387 high court judgments to the value of £29.1m issued in the first six months of 2012, slightly below the annual average value of £31.7m between 2008 and 2011.

Hurlston said that it was too early to draw conclusions about Northern Ireland’s “debt picture”.

Brian Havercroft, chairman of the Civil Court Users Association and high court services director at Marston Group, said that the reduction in judgments was a result of the “economic situation”.

“In addition, creditors are less inclined to use the courts due to the cost and delays which, coupled with the government’s policy of reducing the effectiveness of enforcement, will mean a reduction in the use of the courts.”

He added: “Creditors need to know that if they issue proceedings there is a reasonable chance of making recovery but sadly the government is doing little to reverse the trend that has occurred in protecting debtors to the detriment of the creditor.”