Debt Collection in England and Wales: Starting the debt collection process

In our introductory article we mentioned Rosetta’s standard payment terms, cash flow and the measures taken to check credit records before extending credit to new clients. Here we will discuss our debt collection process.

Thankfully, England has a very streamlined official debt collection process. As there is so much to say on this, we have created a separate post dedicated to the formal collection process (see part 3).

In this context, it is worth remembering that, even though a customer may be a late payer, they may well still remain a lucrative long-term client… if you do it right. To that effect, we always precede the official registered letter writing process with a friendly one-to-one interaction between our project managers and their actual client contact. In practice this sorts out 80% or so of all late payments. It also strengthens our relationship with our client contacts, getting them on our side against some ‘Accounts’ or ‘Finance department’.

We have also learned over time that there is no point in worrying too much about engaging in the ‘official’ debt collection process. In fact, sometimes client’s accounts departments actively encourage us to do so, because it helps them internally to get the necessary sign-offs to be able to pay us. For some law firms in particular, it seems that having a legal claim against them is pretty much part of doing business. We have, in fact, had a few situations where a law firm client has just been issued with a claim from us, and at the same time, the same firm is asking for quotes for new translations.

Become creative

In some cases, particularly with companies based abroad, the official process is a lot less successful. We can for example still get a county court judgement, but enforcement may not be possible abroad (or will be wildly expensive, exceeding the actual arrears). Here it literally pays to be a little imaginative. A couple of my favourite examples are:

• A Cayman Islands based luxury global real estate broker had commissioned a translation of their website into a number of predictable languages (Russian, Chinese, Arabic…), but tried to weasel out of paying with a pseudo-apologetic letter claiming cashflow issues.

I replied to them with a full explanation of what we were going to do: push for a UK county court judgement asap, send that judgement along with the partner’s letter to us explain that they were nearly bankrupt … to all the listed ‘affiliates’ and ‘partners’ on their website, with regular updates along the way.

The money was sent to us that very day.

• We had translated a few contracts and a large amount of technical material from Russian to English for a Russian engineering firm. When they went completely silent, I sent another email, explaining that according to English IP laws, the rights to the translations reverted to us after they had defaulted on their payment, and that my next email would go to the legal departments of the two well-known English customer companies mentioned in the contracts ordering them to stop using the translated technical document.

The Russians replied immediately, and even followed up to make sure we had received the payment a couple of days later.

Thinking outside the box, and personalising your approach to debt collection depending on the type of client you are chasing clearly does reap rewards.

In the next part of this series of posts we will look at how the process works when you’re initial approaches, and personal contacts with delinquent debtors do not result in payment.