Lovetts Newsletter

Our aim at Lovetts is to help our clients recover the maximum amount they can on overdue debts. The ‘dream’ is that our clients achieve free, or low cost debt recovery and also have control over their cases. Some of our clients are achieving this. How?

It is a combination of using all the tools available in the toolbox. Not just one or two - all of them. This newsletter describes ‘Six of the Best’. So what are they?

Improving your commercial recoveries through your trading terms

1) Do you have a clause in your Terms of Business that includes the following wording, or similar, to enable you to recover compensation?

If payment is not made on or before this date, we shall exercise our statutory right to claim interest and compensation under the Late Payment of Commercial Debts (Interest) Act 1998 and the Late Payment of Commercial Debts Regulations 2002.

It is only valid if your terms do not include any other substantial remedy for interest or compensation. Please take legal advice therefore before making any changes to your terms.

2) Do your terms enable you to include invoices not yet due when a claim is made for overdue invoices?

3) If you do not wish to use the Late Payment legislation, do your terms enable recovery of an administration charge to cover your internal costs when payment is late?

If you would like help to improve your trading terms, please contact Jonathan Liggins in our Commercial Litigation Department on 01483 457501 to discuss your requirements.

Claim compensation (and interest) on each trade invoice!

During the past 12 months the average case compensation fees claimed by Lovetts' clients – quite apart from interest and costs which are additional - was £189! Some think that you can only claim compensation once for any Claim issued. Not so – you can claim for each and every invoice.

Why shouldn’t your debtors pay for their default?

A reminder of the sums available per invoice overdue:

The compensation entitlement varies in accordance with the of size each invoice:

Each invoice paid late	Sum to the creditor
Up to £999.00	£40.00
£1,000.00 to £9,999.99	£70.00
£10,000.00 or more	£100.00

Claim compensation and interest before issuing a claim

At what stage can you impose your statutory right to compensation and interest on your debtors? We suggest you do so as soon as you use Lovetts in the collections cycle.

You don’t have to issue a claim to get these benefits! They can be ‘demanded’ in a Late Payment Demand (LPD). This is like a letter before action, but sets out, as a Claim does, the interest and compensation due for each invoice. If all these sums are not paid in response to the LPD, you can issue proceedings for recovery.

To encourage you to use this product (available from Lovetts CaseManager homepage) we are reducing the LPD price on 1st August 2007 from £4.50 to the same price as a CaseManager Letter Before Action (LBA) of £2.00. Why not try it out, and maximise your recoveries? You have a minimum of £40 to gain, and possibly much more!

Make your 'demand' as soon as possible

The sooner you claim compensation and interest, using a Late Payment demand, the more you demonstrate to your customer base the consequences of payment delay and your own intention to recover costs. You must follow up the demand with a claim if you want to be taken seriously next time.

Ensure you claim the correct interest rate under Late Payment legislation

On 30th June 2007, a new reference rate was set under statutory rules of 5.5%. Add to this the 8% interest surcharge on base rate, and you can claim a very respectable 13.5%pa from the moment any monies become overdue after that date.

Period       Reference Rate Interest Rate

1st July - 31st December 2007       5.5% 13.5%

1st January – 30th June 2007       5% 13%

Know your customer!

How long ago was it that you took out a credit report on your delinquent accounts? Are other people being paid at your expense? Or, does the public record indicate that your customer is being sued by other suppliers who have taken legal action whilst you have continued to chase internally?

Part of our service is to offer you online access to ICC credit reports at preferential rates. It is often very cost-effective to check a defaulter's standing before they become seriously overdue.