Accurate record-keeping can help businesses get paid
There is little point in pursuing a debt and getting a judgment if you are ultimately unable to enforce that judgment. However much that sounds like stating the obvious, it happens.
A solicitor, working in our litigation team and handling contentious debts for commercial clients, has commented: “It’s not uncommon for a company to run up significant costs chasing a debt, only to find that incomplete or inaccurate information makes enforcement impossible.”
One explanation is that, when taking on new business, companies do not always think further down the line to a time they might need to take legal action to get paid.
A solution may be to get accurate information from the customer at the outset. Obtaining essential intelligence at that stage can save untold time, money and hassle later on if they fail to pay up.
First, it is crucial to establish exactly who you are contracting with – is it a private individual, a partnership, a limited company or a sole trader? This is fundamental because, if you later issue a claim in the wrong name, you will run into problems. If you are contracting with a partnership, you also need to know the names of the partners so that a claim can be issued and enforced against them as individuals as well as the partnership itself. All relevant addresses and contact details should also be obtained.
Should it ever be necessary to enforce a judgment, other information about a debtor could be helpful. It will depend on the circumstances of the case but, for example, his employment details and whether he owns his own property could make an attachment of earnings order or charging order possible. Details of his bank account may make a third party debt order a possibility or details of any other assets that could be seized by the courts.
If you need clear and pragmatic legal advice, we’re here to help so please get in touch.