CPA Bulletin

Legal NEWS LEGAL: 1 In 2009, the process began to review all the CPA’s terms and conditions - 2001Model Conditions, Supplementary Conditions, Consumer Conditions and Contract Lift Conditions, so the updated versions would be launched on the 10th anniversary - 1st July 2011. It is felt that a two-year process will be needed to allow ample opportunity for comments to be received from Members. These can be discussed, then actioned or rejected accordingly. Kevin Minton, as part of our annual membership letter, informed members that we will commence this process again in July 2019, with the updated terms to be officially launched on 1st July 2021. If Members wish to forward any comments or suggestions to the CPA, then please forward them to david.smith@cpa.uk.net CPA Hire Conditions - 10 Year Review In an industry which relies heavily on the supply chain and excellent customer relations, having to deal with overdue invoices, repeated late and non-payments can not only affect immediate cash flow, but also the opportunity for repeat business and client referral. In the event that an account moves into dispute, having the time and right approach to work towards a resolution without damaging customer relationships or causing negative impact to your projects can be a never-ending cycle. We asked Emma Miller, Company Director of Top Service to give her top tips for achieving successful collections and what you should consider. Howcanwe improve the success rateofourdebtcollectionprocess? Ideally for the best chance of collection a debt should be no longer than four weeks overdue before passing to a third party. At Top Service we would suggest no more than three letters are sent in-house. If they haven’t responded, then they are most likely ignoring you and it would be prudent to refer swiftly into the next stage of your collection process. Know your rights when it comes to claiming interest. Whether it is contractual interest or statutory interest, you are entitled to it. If you are unsure about what interest and other charges you are entitled to, CPA Members have access to Top Service for free advice on this subject and any other credit control advice. Can we pass the debt collection cost onto our customer? Yes, for commercial debts you can claim interest, compensation and costs of using third party collectors when applying the statutory legislation for late payment. Under the Late Payment of Commercial Debts (Interest) Act 1998 you can claim interest at a rate of 8% above base rate and a compensation figure, depending on the value of the debt you are collecting: AMOUNT OF DEBT WHAT YOU CAN CHARGE Up to £999.99 £40 £1,000 to £9,999.99 £70 £10,000 or more £100 If your collection costs are more than the compensation figure you are claiming, you can claim the surplus under the late Payment of Commercial Debts Regulations 2013. Winning a legal battle in court - Does this mean the opposing side pays our costs? Judges in the County Court have discretion in relation to costs and can make a costs order if they feel it is appropriate whilst taking into account the value of the claim, the successful party and the conduct of the parties during the litigation process. However, generally the recovery of legal costs depends on the track your case has been allocated to. If your claim is allocated to the small claims track then usually costs are not awarded and each party pays their own. However, a Judge in the small claims court may decide to award costs and Part 27 of the Civil Procedure Rules outlines the maximum costs which a judge can order a party to pay. Where cases have been allocated to the fast track, normally the successful party is able to recover their costs on a fixed scale from the losing party. The amount awarded and whether an award is made at all is decided by the Judge. The costs limits that apply to small claims and fast track cases do not usually apply to cases in the multi-track. The losing party will generally be ordered to pay the costs of the winning party where the costs are reasonable and proportionate. If we have credit insurance do we still need credit information and recovery services? Yes, with your policy you will have discretionary limits with a limit you can trade up to without the formal approval of the insurer. If you need to make a successful claim you will need to demonstrate you have carried out credit checks and other due diligence to mitigate any risk of trading. When an account becomes overdue you will also need to demonstrate you have taken relevant collection steps and effective litigation to collect your money. This process needs to meet the requirements of your credit insurance policy. Top Tips to Successful Debt Collection 48 CPA Bulletin > August 2019 www.cpa.uk.net