Virtual Assistant Business Support

UK Small Business vs Non-Payers: The Verdict

Scales - Small Claims CourtAs promised in our post titled ‘Small Claims Saga: Payment Gratefully Received’ (September 14) here is our answer to the question initially posed: ‘So, how easy is it for a small business in England to recover debts from non-paying customers?’

The invoice for £150 has now been paid. The costs incurred while compelling payment (£25 court order; £40 to cover recovery costs, such as phone calls and postage, etc; £55 for the bailiffs) were all included in the final amount paid by the defendant.

In this case, it was worthwhile pursuing our claim for payment through the court system. The online nature of the process was straightforward enough to begin with, but once bailiffs were required it was necessary to complete the process offline (via telephone, letter, and fax).

Had the defendant been without money it would not have been possible to compel payment. This point means that it is very important to decide who is to be sued for payment — the business or an individual. Had we cited Mr Sunburn as the defendant, I understand that the bailiffs could have visited his home address. As we sued the business, they could not visit private addresses.

Although we chose to keep the defendant informed of our actions at each stage, in the hope that he would realise we were not bluffing, this was a waste of time in that it did not produce the money owed. It was only upon a final phone call from us — after the court bailiffs had notified us that they had visited the defendant’s business premises only to be told that he had paid in full — to point out that he had lied to a representative of the court and that we would persist in our endeavours to recover the monies owed to us

If the the non-paying client had not sent the cheque after our final phone call, I’m not exactly sure whether the baliffs would have been able to recover the money as they had already said that the business did not have any assets they were entitled to take away. As I understand it, the only solution available was for someone to order the freezing of his bank account — for this you need the defendant’s bank account details.

I was surprised by one aspect of the process. When we first applied for a court order the defendant was, unknown to us, moving address. What would have happened if we had not discovered this? The court seemed to make little effort to ensure that the defendant received the order they sent, relying solely on the fact that it had been posted to him. When the defendant did not respond to the order, and once judgement had been made, it did not seem possible for the defendant to then question the validity of the claim. I can see potential abuses of the system occurring here. What is to prevent someone from intentionally supplying an incorrect address in the initial stages (in an ‘excusable’ way, such as reversing house numbers or spelling a street/road name incorrectly) then changing this address to the correct one when it is time for the bailiffs?

I’m glad this is now resolved. It’s not a pleasant experience having to hassle someone to pay you money you’re entitled to, but it’s important for freelancers. virtual assistants, sole traders, and small businesses everywhere to send out the message that we are a valid economic force and, like any other worker, are protected by the law.

More information on this subject can be found in the Small Claims Resource Centre of the Smallbusiness.co.uk website.