At Philip Elliott Associates we work closely with a company called Andrew Wilson & Co, High Court Enforcement, who are part of our debt recovery team.

For the agents of Andrew Wilson & Co, the debt recovery business is all about staying calm, being professional and focusing on the job at hand, says Sarah Roscoe, the company’s managing director.

Protection from risk

“We understand the pressures that firms like Philip Elliott Associates are under to recover debts on behalf of their clients quickly, while ensuring this is done in a manner that upholds the integrity of both parties and protects them from risk,” she says.

“It’s really about building up a relationship with the person who owes the money and gaining their confidence so you can talk to them calmly. We find that debtors are much more likely to cooperate as a result.”

Andrew Wilson & Co has two licensed High Court enforcement officers – there are only around 50 in the country – who are authorised by the Lord Chancellor to enforce High Court writs and recover money. They include the company’s co-founder and Chairman, Andrew Wilson, who is also the Chairman of the High Court Enforcement Officers Association (HCEOA).

County Court Judgments

High Court enforcement officers can delegate their powers to enforcement agents – bailiffs – of whom the company has 22 working in England and Wales. All of them are employed, rather than subcontracted and having their own fully employed team means they are in complete control of the enforcement process, says Sarah.

A key part of the agents’ work is helping to enforce County Court Judgments (CCJs) – a CCJ is an option for a creditor or their representative when a debt of more than £600 remains unpaid.

“Rather than waiting weeks, or sometimes months, for a county court bailiff to recover the debt, the CCJ can be transferred up to the High Court and passed to a High Court Enforcement Office like ours,” Sarah explains. “We have the power to attend the debtor’s property to recover the money or, in legal speak, ‘take control of their goods’ – that is, seize or remove goods and sell them in settlement of the debt.”

Enforcement agents in action

Robyn Baxter, our paralegal, has spent a day with one of Andrew Wilson & Co’s enforcement agents to see what the job is like in real life. Sarah recommends this as a way for her clients to gain a real insight into the enforcement role.

“They get to see at first-hand what an agent has to do, what their powers are and how difficult it can be to recover the money in some instances. They also learn the extent and limits of agents’ powers. For example, if we go to a business and the office is closed we have the power to force entry, which means arranging for a locksmith to come. We can’t do this at someone’s house, we have to be invited in.”

Helping businesses to recover money they are owed, whether you are dealing with the paperwork or actually knocking on doors, is difficult but important, says Sarah, so it’s vital that the people doing it are skilled at the work.

“We have invested considerable effort in ensuring that we employ people with the necessary technical expertise complemented by the appropriate temperament. We also provide regular training on conflict management so that our team are best placed to act with the utmost care and attention.

Investigative work pays off

“And similarly, people in other parts of the process need to be effective at what they do, as Philip and Robyn are. They have always done the due diligence necessary and put a lot of investigative work into a case before it comes to us, which means that the debt is more recoverable.

“This makes our agents’ job easier and means the client who is owed the money is much more likely to get a result.”

Robyn and I pride ourselves on being knowledgeable about our field and our clients.

But we work with a diverse range of businesses from building to baking and each has its own legal and financial issues where it sometimes pays to have specific expert insight.

In the last year, we’ve been working with Richard Brackenbury of Fraser Brown Solicitors in Nottingham.

Richard is a construction law specialist and bringing him in to work on a case is the equivalent of bringing in the wrecking ball when your efforts to knock down a wall with the sledgehammer have come to naught.

Sub-contractor to building trade

Take the case we had recently where a client of ours was owed around £150,000. The client is a sub-contractor to the building trade and ‘subbies’, as they are known, all too often find themselves chasing late payments from the main contractor.

In this case, the money had been outstanding for some months with the contractor refusing to budge until Richard entered the picture.

“What you often find is that the people who owe the money will hold out longer if they see the other side has no specific expertise in that industry,” Richard says.

“They hope it will take someone without knowledge of the particular rules and laws of their sector so long to identify a course of action that their creditor will either give up or accept a lower payment – much lower in some cases. But once the debtor knows there’s an expert on board, who can cut to the chase, things move much quicker.”

Adjudication process

In this case, Richard proposed the case should go to adjudication, a process whereby the case is reviewed by an adjudicator – not a judge but who has with similar powers to compel payment and is often a specifically qualified surveyor.

Once an adjudication award is made, the debtor has to pay up within a specified period.

In fact, just wielding the word ‘adjudication’ was enough to unblock the negotiations.

“It was the threat of adjudication that made the contractor pay up so we didn’t even have to embark on the process,” Richard adds. “Happily, we didn’t have to accept a deal and take a lower amount either and they paid the sub-contractor the entire amount he was owed.”

Calling on specialist expertise like Richard’s is one of the range of benefits we can offer our clients to help them get the money they are entitled to.

It definitely pays off to have someone on board who sends the signal to the other side that you really mean business.

In October, new rules come into force governing what businesses need to do in the lead up to legal action against clients who have failed to pay.
The Pre-Action Protocol (PAP) sets out the steps to be taken before court action and it affects every type of business.

Money owed

So, from October, on behalf of our clients, we will have to send a letter to the person who owes our client money which specifies the amount and to what the debt pertains – unpaid school feels, hire equipment unreturned or other unmet bills.
We have to send a statement of account from the client plus a reply form for the person to respond and a financial statement for them to complete (all formatted to an official template).
Finally, we have to spell out how the debt can be paid off. And we have to do this no matter how many emails and phone calls we have already expended time and energy on.
But the letter part isn’t the most annoying and time-wasting part from the point of view of us and our clients.
Once the letter has been received, the debtor has 30 days to respond. He/she can request more documents – which we must provide or explain why they aren’t available within 30 days.
The debtor then has another 30 days to look through the documents and get back to us. But he/she can also decide to get financial advice . . . and we have to give them at least another 30 days to do so.

Mediation explored

And only after mediation has been explored thoroughly can we/our client even begin to think about court action.
The – admittedly, laudable – aim of the PAP is to reduce the number of cases going to court and encourage more amicable resolutions. But its outcome will be more bureaucracy and more frustration for clients who are owed money – money that they themselves may depend on to keep their own businesses afloat.
We have no choice but to comply but sometimes you wonder whether the people who draw up these rules genuinely grasp what it’s like to run a small business in practice.
The danger with the PAP is that it could end up creating even more debtors by forcing viable businesses who are owed money by others into liquidation themselves.

We pride ourselves on negotiating well to recover debts on behalf of our clients with even the trickiest of customers.

We are firm but sympathetic as that’s usually the best tactic to get results.

Yet with the best will in the world, there are some who delay, prevaricate, procrastinate or just stubbornly refuse to cooperate. And in such cases, it takes drastic action.

This can mean going to court, though court action can take up to six weeks to play out. But there is another measure which we can invoke which can have speedier results: a statutory demand.

Winding up petition

A statutory demand means that the company has to pay its outstanding debt in 21 days – if not, we petition to wind them up, so the individual responsible is declared bankrupt.

It can be especially useful in a situation where we know that there are other creditors: issuing a statutory demand means we would be at the top of the list, should the company cease to trade.

We used a statutory demand recently in a case where the we knew the company concerned had cash flow problems but, with contracts in the pipeline, was probably still viable. They owed our client around £15,000 and they owed money elsewhere.

Interest and costs

Issuing a statutory demand was a way of ‘shouting loudest’ – drawing attention to our claim and focusing the company’s mind on paying our client first.

It worked and we recovered the £15,000 plus interest and costs.

A statutory demand is not appropriate in every case but it can sometimes, as they say, unblock the parts of the payment pipeline that other measures don’t reach.

It always amazes me how outlandish people can be when they are trying to put off paying an outstanding bill.

From promising to pay tomorrow – tomorrow never comes – to relatives’ repeated funerals to the adult equivalent of the dog ate my homework (as in ‘I saw the letter but the dog chewed them; all seven of them’), there is a surprising consistency to the range of excuses some businesses think will satisfy the companies to whom they owe money.

They also seem to think I was born yesterday – definitely not the case.

We once had a case where the director of a company denied all knowledge of his co-director, even though, as it turned out, they were living together. Both had signed a personal guarantee for the goods they had taken – meaning both were personally liable for the outstanding payments – but she was oblivious to the debt, which he’d managed to keep hidden from her. When we finally managed to make contact, she was surprised to hear there was a County Court Judgement against her but said that it did explain why she couldn’t get a credit card!

Other delaying tactics we’ve ‘enjoyed’ include the continuous offers of payment which never materialise and the email suggesting remittance advice is attached when it’s not (yes, that old one).

Then there was the man who was prevented from paying immediately because his mum died, twice, and the chap who claimed a broken toe, of all things, though it wasn’t entirely clear why the fractured digit would prevent him from meeting his financial responsibilities.

The danger in all of these is that costs can quickly mount up, through court and other fees, making the situation worse. In one case recently, our client was owed £6,500 but the debtor eventually had to pay around £10,000, once costs and interest had been added. And they are likely to be stuck with a poorer credit rating for a while.

Delaying tactics don’t look quite so clever then. More like tactical blunders.