Late Payment of Commercial Debts

Andrews & Arnold Ltd vs G-Nostic Ltd 23rd Nov 2007

Background

Customer took internet service, regularly paid late but not immediately invoiced for all charges. Eventually left and failed to pay final invoices. Took over a year of chasing to get final invoices paid. In our opinion customer very stroppy. We issued all unissued late payment charges. Eventually took action for one vary marginal case of an invoice paid late by cheque.

Claim

We say cheque was late. Due end of March, paid 7th April. We had logs showing how we process cheques. We had details of regular late payments. We had no proof.

Defence

They say cheque sent the week before. Statements confused, claimed left bank on a bank holiday for example. No proof.

In addition to defence on matter of fact (claim sent on time), defence on wasting courts time and on fact late payment charge not pursued until over a year after original late payment.

Proceedings

Defendant engaged solicitors to represent rather than themselves, at some cost! They were only instructed two days before. They got the defence statement to us by fax at 17:06 the day before a 10:00 hearing and did not get the statement to the court until 10:18 on the day, and it was unsigned. They had no signed copy even!

We took turns at presenting arguments. It came down to the fact the neither of us actually had any proof.

Ruling

Dismissed, we were not surprised

Lessons

The court is clearly very tolerant of procedural errors. All statements should have been there 14 days before, not 18 minutes after the hearing was due to start!
The defence on being a waste of the courts time being only £40 was discarded, the court deal with such small claims and it is appropriate.
The defence of delay in raising the charge was a concern, but accepted that we have 6 years. This was clearly a very negative point for us and may be what tipped the balance.
The defence of fact, sending cheque on time, was accepted as we had no proof to the contrary. If we had a RECEIVED stamp on the cover letter then that would apparently have been accepted, but an electronic log was not convincing.
One key point raised at the start was that if we were accusing each other of lying the judge would allocate to the fast track and award costs. We both agreed that was not a good idea.

Actions

Ensure late payment invoices raised promptly to avoid concerns over delay.
Have a system for logging when cheques arrive. A received stamp would be a good start. A scan of a postmark perhaps.

Followup

Having understood the exact reason we lost, we pointed out to the customer that there were two further late payment charges where we have clear evidence that the payment was in fact late, and so he had to pay £80 or we would take him to court for that. This was paid, and the account closed. This nicely covered the costs of the court case for us, so in the end we won.

We now stamp all cheques with a received stamp, and scan them so we have details of dates on cheques, etc.

Late Payment of Commercial Debts

Home Tips Excuses Stories Disclaimer	Andrews & Arnold Ltd vs G-Nostic Ltd 23rd Nov 2007 Background Customer took internet service, regularly paid late but not immediately invoiced for all charges. Eventually left and failed to pay final invoices. Took over a year of chasing to get final invoices paid. In our opinion customer very stroppy. We issued all unissued late payment charges. Eventually took action for one vary marginal case of an invoice paid late by cheque. Claim We say cheque was late. Due end of March, paid 7th April. We had logs showing how we process cheques. We had details of regular late payments. We had no proof. Defence They say cheque sent the week before. Statements confused, claimed left bank on a bank holiday for example. No proof. In addition to defence on matter of fact (claim sent on time), defence on wasting courts time and on fact late payment charge not pursued until over a year after original late payment. Proceedings Defendant engaged solicitors to represent rather than themselves, at some cost! They were only instructed two days before. They got the defence statement to us by fax at 17:06 the day before a 10:00 hearing and did not get the statement to the court until 10:18 on the day, and it was unsigned. They had no signed copy even! We took turns at presenting arguments. It came down to the fact the neither of us actually had any proof. Ruling Dismissed, we were not surprised Lessons The court is clearly very tolerant of procedural errors. All statements should have been there 14 days before, not 18 minutes after the hearing was due to start! The defence on being a waste of the courts time being only £40 was discarded, the court deal with such small claims and it is appropriate. The defence of delay in raising the charge was a concern, but accepted that we have 6 years. This was clearly a very negative point for us and may be what tipped the balance. The defence of fact, sending cheque on time, was accepted as we had no proof to the contrary. If we had a RECEIVED stamp on the cover letter then that would apparently have been accepted, but an electronic log was not convincing. One key point raised at the start was that if we were accusing each other of lying the judge would allocate to the fast track and award costs. We both agreed that was not a good idea. Actions Ensure late payment invoices raised promptly to avoid concerns over delay. Have a system for logging when cheques arrive. A received stamp would be a good start. A scan of a postmark perhaps. Followup Having understood the exact reason we lost, we pointed out to the customer that there were two further late payment charges where we have clear evidence that the payment was in fact late, and so he had to pay £80 or we would take him to court for that. This was paid, and the account closed. This nicely covered the costs of the court case for us, so in the end we won. We now stamp all cheques with a received stamp, and scan them so we have details of dates on cheques, etc.