Author Archives: Diane Bantten

Our £75 Instruction Fee

If the credit control approach has proved unsuccessful in obtaining payment, £75 plus vat secures our service at pre action stage and avails the client of 25 years legal experience. The fee covers “due diligence”, credit rating information (corporate bodies), pre action warning letter and follow up call. We aim to recover all fees, late payment compensation and interest.

Debt Recovery Services – with Acquit

For more information – please call Diane Bantten on 01202 432022

Oursourced Credit Control - With Acquit Debt Recovery

Outsource your credit control!

We offer this credit control service to our clients as we firmly believe that prevention is better than cure!  We act as part of your Accounts Team so that we can establish a good relationship with your clients and encourage them to deal with payment of your invoices in a timely manner.

If the friendly approach doesn’t do the trick we will alert you to a potential “non payment” situation and advise you on the best way forward; for a monthly retainer we ensure that your cash flow is in tip top condition.

Outsourced Credit Control – with Acquit

For more information – please call Diane Bantten on 01202 432022

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.

Why you should claim Late Payment Interest and Compensation

According to research conducted by BACS in 2015, “over three quarters of UK businesses suffer from late and non-payment of invoices. The payment giant, which processes millions of electronic business payments every day, found that an astonishing 76% of businesses are being affected by late payments of up to 6 months beyond agreed contract terms.

BACS also revealed that in companies that are suffering from late and non-payment:

  • 20% of directors have been forced in to taking a pay cut
  • 26% have had to increase bank overdraft use
  • 23% have no choice but to pay their own suppliers late”

* Source

The effects of late payment can be extremely detrimental to the  economic health of a business and its owners.

The Late Payment of Commercial Debts (Interest) Act 1998 was introduced to compensate creditors for the late payment of debt and to deter late payment. It only applies to the commercial supply of goods and services where you don’t have a provision for interest in your Terms of Business.

In brief, it enables you to claim interest and compensation for invoices that are not paid on time.

You can claim Late Payment Interest and Compensation if:

  • You have supplied goods and services
  • Your buyer bought for business purposes
  • The contract is not governed by a consumer credit agreement

You don’t have to tell your customers that you will claim Late Payment interest or compensation if they fail to pay on time before they have actually breached your payment terms. However, it may be beneficial for your cash flow to tell them in advance of your intentions, should payment be made late. You could put warnings to this effect on your invoices; your statements and in your terms of business.

Full details of how much you can claim can be found on our website:



Insolvency in the Construction Industry

Here’s some concerning information about insolvency in the construction industry from the team at Burton Sweet Corporate Recovery.

Interestingly, this industry has always contributed a disproportionate number of business failures. Graham Down, Director at Burton Sweet, says that according to the most recent figures produced by the Office of National Statistics, construction output has fallen for each of the last two quarters, meaning that it is technically in recession.  They offer a free initial consultation to any business in the construction industry who is facing difficulty.

So, what are the most common causes of the high failure rate? According to Burton Sweet, they are:

  • Retention

Companies are failing to keep track of, or even chase, retentions. A Retention is a sum (commonly 5%) held back from by a client from the contractor (or the contractor from sub-contractors) so as to ensure that the contractor completes all its contractual obligations.  Half of the retention is normally released on “practical completion” of the contract with the remainder paid over at the end of a “defects liability period”.

  • Housing Grants, Construction & Regeneration Act 1996 (HGCRA)

Companies are failing to apply their statutory rights when a client or main contractor pays less than it should. The HGCRA was set up to identify poor payment practices and extensive, expensive and time-consuming disputes as amongst the key problems besetting the construction industry

  • Record keeping

Not all contracts need to be in writing, believe it or not; an oral contract is usually just as binding on all parties.  In the past, they needed to be in writing to be protected by HGCRA (see above) but that has now changed.  Consequently, disputes over contracts are difficult to resolve if there is no paper trail.

  • Over-stretching

Over-stretching has been the downfall of many well-established construction businesses due to companies taking on work outside of their usual remit when times are hard, resulting in costly mistakes, delays and having to re-do work.

  • Supervision

Even the most experienced and well-qualified employees can get it wrong sometimes.  Tendering, estimates and contract documentation need to be checked rigorously; the buck always stops at the top.  Many companies in the industry have been brought to their knees because of administrative failures before a job started.

  • Over-exposure

The construction industry is disproportionately susceptible to insolvency.  When one company fails it can bring down suppliers and sub-contractors who are owed money – the so-called “domino effect”.  Because construction businesses are often involved in just a relatively small number of contracts at any one time, they are more vulnerable because they often have all their eggs in one basket.

  • HMRC

Due to the pressures of cash flow, money set aside to pay taxes as a lump sum, (PAYE/NIC, VAT and corporation tax (or schedule D for unincorporated businesses) & the Construction Industry Scheme (CIS)), it can be tempting to use it to ease the immediate situation, making it extraordinarily difficult to recoup and catch up.

Although these are examples from the construction industry, heeding issues such as record keeping, supervision and HMRC is good practice for any business.

Extracts courtesy of Burton Sweet Corporate Recovery, E-brief August 2016

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.