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Anyone (especially in the creative industries) taken a client to the small claims court for an unpaid invoice? Is it worth the hassle/expense for £600 and the principle? And where's the best online advice? I heard a 'letter of intent' is a good place to start? Ta v much.
You can usually pass it to debt collectors in return for a %.
Send them a recorded letter giving 7 days to pay. If nothing then moneyclaim online as above. Don't use a debt collector, they will do nothing except send a letter.
And yes, definitely worth the hassle (unless they've made you aware of some sort of grievance),
Don’t use a debt collector, they will do nothing except send a letter.
They might phone first, I've taken the odd call when we've been late paying (which is quite regular as we get paid late by our customers and it all flows downhill..)
How overdue? One of my clients routinely owes several invoices at a time and up to 90 days overdue - but then I know they'll always pay up eventually so I'm not overly worried.
I think you can track companies financial records to give an indication of how financially healthy they are in general...
You can also try sending a letter explaining that after x date you will be applying interest at a rate of y%pd - keep it fairly reasonable tho. That might expedite a payment.
I've taken a few bad payers to small claims court for less than that and won, and got my money.
It seems to be problem at the moment with payers, even companies we are very close too. I'm giving some of them a lot of girth due to cash flow. If it's not a company you want to carry on working with I would give them a few gentle reminders, then a final reminder. Then a letter. Then SCC.
With clients you want to carry on working with - I've been doing the gentle reminder for much longer than I should - so I'm not best placed to give advice on that one, I find it tricky upsetting someone you have an otherwise good relationship with.
People take the piss.
Client said (after a succession of unanswered emails and calls over a period of three months) that the work doesn't justify the cost, but he's basically trying it on and ignored several requests from me for feedback so I can amend the work. Amends are quite normal in my industry and he knows it, and I clearly stated that the work I sent was a first draft and would need some tweaking here and there - he definitely understood this and accepted it, and we even agreed he would budget for amends. I have a strong feeling he just doesn't need the work he requested now, and so doesn't want to pay for it. I've kept a record of all my attempts to get him to either pay up or provide feedback so I can make any amends. He's left me powerless, basically, but I'm reasonably sure a small claims court would find in my favour, if I can be bothered to pursue it.
I definitely won't work for the client again, as I've plenty of decent regulars who make up 90% of my income. I've been freelance 12 years and this is the first time I've had to consider court/debt collector. Sign of the times, perhaps.
It seems to be problem at the moment with payers
We are having this at the moment too - clients that have historically been good at paying suddenly taking forever - and we work with lots of public sector too so it isn't just tight business owners holding on to their money. As a knock on I still haven't been able to pay my tax bill from the summer despite having a very healthy order book. 🙁
7 day letter then CCJ if its a reasonable amount. Your customer(former) will love it on their credit history, especially when they have to pay all the costs as well.
If the company is limited, make sure you send the letter to company and the company Secretary (technically they are responsible). This can be fun if its a small company and the owner has his wife down as the Secretary (quite common). It can lead to shouty phone calls but the bill paid.
You can also try sending a letter explaining that after x date you will be applying interest at a rate of y%pd – keep it fairly reasonable tho. That might expedite a payment.
There's a standard rate for this: 8% + Bank of England base rate:
https://www.gov.uk/late-commercial-payments-interest-debt-recovery/charging-interest-commercial-debt
Send a final letter making it clear that you intend to charge this if they delay further, then moneyclaim online.
Tactics that I've used in the past when not been paid for work. Some maybe slightly dubious, but I've pretty much always got paid in the end - these are last resort if no other method has worked.
1. E-mail the small claims court form across to him, already filled in, stating if you're not paid in full in 3 days, you will submit it - you've taken legal advice, have everything in writing, and court fees will increase the debt owed. This works 75% of the time. Short & Direct E-mail works best, 2/3 sentences - straight to the point, no friendliness/superfluous words.
2. If web related, take down any work you did - in the past I've replaced it with "This has been removed due to the client not paying their bills". This tends to have a rapid response, but might result in legal action - up to you.
3. If no contact, give them a call and tell him you've had no contact, so was wondering if he was still in business - you "might have to start contacting their clients/business associates to explain the situation and see if they've heard anything?".
I've only used these tactics when I've 100% delivered my side of the deal and they've ignored me for some time. In my experience you're better off going in hard, and if it doesn't work, walk away. It's easier to make the money elsewhere than the hassle of a court case.
Small claims court is pointless unless they are local and have a few assets. Bear in mind they can move the court case to nearer to them if they live miles away, or put in a massive counter claim and get it upgraded to Fast Track which you then have to fight.
Edit: If it does come down to a court case, bear in mind (without trying to sound prejudiced) it is likely that the judge will be from an older generation who may not be as familiar with technology (and my sister's experience as a solicitor, just wants to get the case over so he/she can head off to play golf). If it's web related, make analogies so he/she understands - I always used cars - the CMS/coding is the engine of the website, the design is the body work etc, you fixed up his car and now he's refusing to pay for the work he asked for, so you've kept his car until he pays etc.
client wasn't UBYK by any chance was it?
I've done this successfully a few times for personal and work matters, I normally give 14 days with letter of intent. There are templates on moneysaving expert and consumer action group (which is the place to go for help with this, full of good peeps).
I would try a normal letter first. Eg - you're a good client, we want to keep up the relationship, please draw this to a conclusion within 7 days or before I get serious. Then do 14 day letter of intent.
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First questions I would ask yourself is how solid are your payment terms and conditions and your contract agreement. you will not stand a chance at small claims court unless you can clearly demonstrate your client has not met your payment terms and conditions and your agreed contract. I learnt this the hard way many many years ago, thankfully a small amount of money. Learnt my lesson and now have solid T&C's.
Don’t use a debt collector, they will do nothing except send a letter.
Use a debt collector. A decent one will mae sure you’ve done the right bits, send a letter then take it further. On a £600 invoice the threat of the fees alone and a proper letter will make 90% of clients pay. It will cost you very little until you go to court and it’s unlikely you will get that far if you’re in the right. I’ve only ever had one get that far and sent probably 10-15. Don’t piss about with small claims if your a business - there’s better things you can be doing.
^
Debt collector by any chance?
What about when OP gets lumbered with the fees because the client gets scared and pays the original amount direct, bypassing the debt collector?
Email em telling em your gonna take em on judge Rinder. 😁
Not a debt collector, just had to use them unfortunately. Ive never had that happen, anyone stupid enough to let it go to that level and then pay without fees would still be liable, but ive just checked and a £600 debt would cost £130 with the firm i use. Personally id leave it at that and take the £470 and no hassle (less a couple of quid for the letter before action) but you could still pursue.