Commercial debt recovery - no recovery no fee Emmetts Solicitors' innovative No Recovery No Fee debt service has proved incredibly popular and we act for many businesses, from large national concerns to small sole traders. Many businesses have tried the service with one debt or a handful of debts, and following successful recovery now send all of their debt recovery work to Emmetts Solicitors. Whatever the nature of your business, whether your business is large or small, our debt recovery service can assist you. We do not charge an upfront fee for you to retain our services. What is more, if we accept your instructions and we do not either recover your debt from the debtor or obtain judgement against them, we will not charge you anything. In fact, while your case is proceeding, you will only be required to pay disbursements that are charged by third parties such as court fees as they arise. If we win your case by recovering money from you opponent before proceedings or obtaining a court judgement against your opponent, we only charge you 15% (plus VAT) of the amount recovered. The rest of our fees are recovered directly from the opponent. If we do not recover any more fees from the opponent, we do not pass any additional charges on to you. Our procedures: initial information Our debt recovery procedures are active and where necessary agressive through use of all the legal tools available. When you first instruct Emmetts Solicitors, a partner and fee earner will be appointed to deal with your debt recovery issues. We will ask you questions to gain an understanding of your business, the products or services that you provide, how debt arises in your business, the nature of your debtors and any objections you have faced in the past or that you currently face from your debtors. This helps us to build a profile, and devise the overview of a unique debt recovery plan for your business. Information is then requested from you regarding individual debts and debtors. Typically this will include: written agreements you have entered into with the debtor purchase orders delivery notes invoices details of any previous dealings that you have had with the debtors correspondence that you have had with the debtor Typically we aim to be "fully armed" and ready to go with the information we need within 24 hours of you instructing us. Our procedures: background checks on the debtor When details have been obtained of your debtors, we will carry out initial background checks on the debtor. Where the debtor is a company, the checks will help to ascertain whether the company is still trading and whether the company is the subject of insolvency proceedings. In some cases, trading accounts may be obtained. Where the debtor is an individual, the checks will help to ascertain whether the debtor is a homeowner and whether they have other substantial assets which may be charged or seized to satisfy a debt. There may be a small disbursement charge from third party information providers such as credit reference agencies, the land registry and companies house for obtaining the background check information. We will make sure that you are aware of the charges before they are incurred and obtain your payment for the disbursements. We will never incur charges for you that you are not aware of and have not agreed to. The results to the searches are normally returned instantly and always by the next working day at the latest, so the background checks will not delay taking action to recover the debt. Our procedures: contacting the debtor The importance of the initial letter to the debtor cannot be overstated. Debtors are typically used to seeing standard letters printed off in volume by debt collection agencies. A debtor will also be aware that upon receiving a standard letter they can safely ignore it in the knowledge that no further action will be taken for weeks, months or ever. By obtaining detailed information at the outset of a case Emmetts Solcitors are able to send a carefully drafted, tailored letter detailing the background and, where it strengthens the case, attaching documents in evidence to prove the debt. The preparation of a detailed letter of claim as opposed to a standard "print off" letter is: the letter is much less likely to be "filed in the bin"; and the letter pre-empts and avoids the debtors usual "first line of delay", namely requesting the information that has been sent with the letter The letter will provide a time limit, typically 14 days for the debtor to pay up. It will also state the consequences of failure to reply: issue of proceedings or service of a statutory demand, both of which will add significant cost for the debtor. After 7 days, if there is no reply to the letter, we contact the debtor again, by fax, email and telephone, drawing their intention again to the deadline provided and making it clear that proceedings will be issued or a statutory demand served if they do not pay up. If payment is received from the debtor, we will deduct 15% (plus VAT) from the amounts received and forward the balance to you by BACS transfer (up to 5 days), CHAPS transfer (same day, subject to a charge of £29.75 inc VAT) or cheque. If the debtor provides proposals for regular repayments, we will notify you of the proposals and with reference to the background checks and other available information with you discuss whether the proposals are acceptable or whether you wish to proceed to take action against the debtor. If notification of a defence is received from the debtor, we will notify you, obtain further information from you if necessary and analyse the prospects of success of the case in percentage terms. If at this stage we consider that your case has less than 50% prospect of success, we will advise you why and we will no longer be in a position to deal with the claim under the No Win No Recovery scheme. If we assess the prospects of successful recovery at more than 50% we will advise you, obtain your instructions and issue proceedings or serve a statutory demand on the debtor. Within 14 days of sending the letter of claim we aim to have: recovered the debt for you in full; or discussed with you the debtor's repayment proposals and accepted or rejected them; or obtained your instructions to issue court proceedings against the debtor; or obtained your instructions to serve a statutory demand upon the debtor; or advised you that we consider you have less than 50% of recovering the debt together with the reasons why we have reached that decision Statutory demand v court proceedings Some credit agencies promise to recover your money for you quickly by serving a statutory demand upon the debtor in every case. This is a dangerous strategy and can lead you to become liable for significant costs. There is certainly a time and a place for serving a statutory demand to seek to recover a debt and in appropriate circumstances the procedure can result in fast recovery. A statutory demand is a procedure whereby a notice in a specified form is served upon the debtor. Upon receipt of the notice, the debtor must within strict time limits either: pay or secure for the debt for you in full; or apply to the court to set the statutory demand aside If one of the above steps is not promptly taken by the debtor, winding up proceedings (in the case of a company) or bankruptcy proceedings (in the case of an individual) can be started by a petition to the court, and the failure to respond to the statutory demand can be relied upon as evidence of the insolvency of the company or individual. Understandably, companies do not typically wish to be wound up and individuals tend not to wish to be made bankrupt. The strategy therefore is to instill sufficient worry in the debtor that proceedings so that they pay to avoid the draconian consequences of not paying. The statutory demand procedure can be effective where: the debtor has admitted the amount due and owing; or the debt is not validly dispute; or you already have a court order against the debtor; and the service of a statutory demand is likely to prompt payment from the debtor If the debt is disputed in any way, then the service of a statutory demand may be an abuse of the court process. Further, if the debtor seeks to set aside the statutory demand, the court does not require the debtor to prove their defence, but rather to show evidence that they have a valid dispute that could amount to a meritorious defence. If the debtor is successful in setting aside the statutory demand, it is likely that the court will order that you pay the costs of applying to the court to set aside the statutory demand. These costs may be very substantial. In a recent case where Emmetts Solicitors successfully applied to set aside a statutory demand for a client legal costs for the application to set aside the statutory demand were recovered in the sum of £12,750.00. Serving a statutory demand is accordingly not a decision to take lightly, and must only used in the correct circumstance, but when used correctly it can be a useful and effective weapon in the "legal armoury" In cases where it is not appropriate to serve a statutory demand, court proceedings should be issued and actively pursued. After the event insurance If court proceedings are issued and you lose the case, you may become liable for the debtors legal costs and disbursements (known as an "adverse costs order". Before proceedings are issued, we will advise you in every case about the availability of after the event insurance. This is insurance that will cover you against the risk of an adverse costs order and will pay out a sum equal to the adverse costs order made against you. After the event insurance is not in any way compulsory with our scheme. Once you have been fully advised about the availability of the insurance and the risks of a costs order in your particular claim you are free to decide whether you want the insurance or to press ahead withou it. The attractive aspects of the after the event insurance policies that our clients typically use are: the policy premiums are deferred to the end of the case so you do not pay for the policy until your case has ended; the policy premium is "self insuring" so you do not pay the policy premium if you lose the case; the policy premiums can typically be recovered from your opponent if you win as part of the legal costs you are entitled to recover against them; There is now a fast moving, active market for good, commercial After the Event Insurers. We use the services of a specialist broker called The Judge to ensure that our clients are quoted the best and most competitive deals for After the Event Insurance. Emmetts Solicitors do not receive any commission relating to After the Event Insurance and have no vested interest in any particular insurer or insurance policy. Remember, the After the Event Insurance is available for your protection if you want it. It is not a compulsory part of our scheme. Our procedures: court proceedings Emmetts Solicitors regularly litigate debt recovery actions through the courts and are experienced at dealing with all steps of the court proceedings up to and including providing advocacy at the final hearing of a case. You will be kept fully informed at all times of progress with a case. Procedure and tactics will be explained to you and you will be notified of the case strategy. Many interlocutory court hearings are now dealt with by telephone conference. Emmetts solicitors also have a nationwide network of advocates who will attend court hearings at any court in the country, providing a truly nationwide access to the No Recovery No Fee scheme. For smaller cases, a legal executive, solicitor or junior counsel will attend hearings as necessary. For larger complex cases, we have access to senior counsel up to the level of silks available. The No Recovery No Fee scheme applies all the way through to a final hearing and judgement of the court. You are only required to pay disbursements such as court fees. Enforcement proceedings Once a court order has been obtained in your favour, enforcement proceedings may be needed to secure payment from the debtor. Enforcement proceedings may include: the debtor being required to attend court to provide details of their assets under oath; court bailiffs attending to seize assets of the debtor; the debtor's bank accounts being frozen to secure payment; a charging order being secured over the debtor's property followed by an application for an order for sale; winding up or bankruptcy proceedings Enforcement proceedings are not covered by the No Recovery No Fee arrangements. They are charged at a competitive hourly rate which will be notified in appropriate cases and agreed by you before any liability is incurred by you. Recover debt now- no recovery no fee Please remember, we act for many small companies including sole traders as well as large companies under the no recovery no fee scheme. We are happy to deal with individual debts or entire debtor ledgers. To instruct Emmetts Solicitors to recover your debt now under the no debt no recovery scheme, please complete your details by clicking the link below. We will send you Terms and Conditions for the scheme and contact you to discuss your requirements further. Get further details Put Up or Shut Up 27th May 2008 In conducting legal disputes, it is normally important to raise the issues you want to contest at the beginning of the proceedings. Otherwise, there is a risk that the court will not allow them to be argued, or possibly that it will make an unfavourable order for the division of legal costs. A recent case illustrates the point. A property dispute had arisen because a house builder, which had used the claimants’ land to construct a sewer, had failed to reinstate the land as required under their agreement. The land owners issued a statement of claim. The builder wished to argue that the claim was issued in the wrong court, which, in its view, did not have jurisdiction to hear the matter in dispute. However, the acknowledgement of claim did not indicate that the matter of the court’s jurisdiction was to be argued, with the result that the Court of Appeal ruled that the house builder had accepted the jurisdiction of the court. The Court therefore rejected the house builder’s right to argue the point. For advice on any commercial property matter, please contact Richard Emmett. Is a Risk Assessment Necessary? 23rd May 2008 These days, health and safety issues are important considerations for the management of most firms and the potential ramifications of failing to adopt robust health and safety policies are now well known. However, a recent case has indicated that failure to carry out a risk assessment may not necessarily prove the contention that appropriate steps were not taken to make a procedure safe. Only if it can be shown that the employer did not take steps to make the risk associated with the operation of the procedure as low as practicable can the causal link necessary in order to make the employer liable for an injury to an employee be established. This does not necessarily mean that a formal risk assessment has to be available for the particular operation which gave rise to the injury. Also, merely breaching the Manual Handling Operations Regulations 1992 is not in itself sufficient, as to establish liability under statute law the breach must be shown to have caused the injury. In the case in point, an employee was injured when carrying out a mechanical handling operation. The employer successfully argued the risk assessment point in the Court of Appeal. However, the evidence in this instance showed that the employer had failed to take appropriate steps to make the operation safe and so the employer was found liable for the injury to the employee. “Whilst not having evidence of a formal risk assessment will not of itself undermine an employer’s defence against a claim that insufficient steps have been taken to minimise the risk of injury, carrying one out is the best way of identifying what needs to be done to protect the health and safety of employees,” says Richard Emmett. “We can advise you on any aspect of health and safety at work.” Loss and Damage – Economic Damage not Physical 16th May 2008 Misunderstandings are at the base of many legal disputes and nowhere is this more evident than in disputes involving insurance claims. Recently, a company which used scrap metal found that it had inadvertently received scrap contaminated with small amounts of radioactive plutonium. The radioactivity itself had not caused any significant problems other than the resultant cost of disposal of the contaminated material, which had to be carried out under the controlled conditions that apply to radioactive waste. Once the company had disposed of the radioactive material, it reclaimed the cost from its insurers, relying on a clause that insured ‘loss…or damage due to contamination…by radioactive materials utilised in the manufacturing process’. The insurers argued that in the context of the insurance policy (an ‘all risks’ material damage policy) the clause referred to physical damage, not economic damage. The judge, considering the policy as a whole, found it difficult to envisage that the intention would have been to cover a completely different type of loss in a policy otherwise worded to deal with damage to property. The addition of cover relating to loss due to radioactive material was to bring into cover something which would otherwise be excluded (most insurance policies exclude liability for loss due to radioactive contamination). Nor had the cost of disposal of the radioactive material been caused by its being used in the manufacturing process per se – accordingly, the loss was not covered by the policy. If you are in doubt as to the meaning of your insurance policies or any other contracts or legal documents, we will be pleased to advise you. Mediation – Delay May Have Costs Implications 15th May 2008 There have been a number of cases in which a refusal to mediate on the part of one party in a dispute has led to that party carrying the costs (at least in part) of the other party, even though the party which refused to mediate won the case. Recently, however, a case has suggested that there may also be adverse costs implications in the event that one of the parties unreasonably delays consenting to the commencement of mediation ‘until very late, when its chances of success are very poor’. This is another example of the impatience shown by the courts to intransigent litigants. If you have a commercial dispute, we can help you negotiate a satisfactory outcome. Tenant Beware 8th May 2008 When there are problems relating to defects in premises that are let, the tenant will normally try to obtain redress through the repairing covenant. However, if that does not look like the best way forward, it is sometimes possible to bring an action for nuisance against a landlord who fails to take action. In a recent case, a tenant took action against his landlord for nuisance relating to the ingress of water into his flat, alleging that this interfered with the ‘enjoyment of the property’. However, the problem had existed before he leased the flat, and this was the tenant’s undoing. The court held that the landlord could not be liable in nuisance for damage that pre-dated the grant of the lease. The moral for prospective tenants is ‘tenant beware’. Data Protection – New CCTV Guidelines 3rd May 2008 Many people are not aware that the use of closed circuit television (CCTV) cameras is covered by the Data Protection Act (DPA). The Information Commissioner’s Office has published an updated version of the code of practice giving guidance and advice for CCTV users on how to comply with the DPA. This addresses the issue of sound recording, which the guidance describes as ‘highly intrusive’ and it warns organisations that its use would only ever be justified in highly exceptional circumstances. The guidance also includes a simple checklist on compliance for users of very limited CCTV systems for which the full provisions of the code would be too detailed. The updated code of practice can be found at http://www.ico.gov.uk/Home/for_organisations/topic_specific_guides/cctv.aspx. Employing Illegal Migrant Workers 25th April 2008 New measures designed to tackle illegal migrant working came into force on 29 February 2008. These measures, contained in the Immigration, Asylum and Nationality Act 2006, include: a system of civil penalties for employers who employ illegal migrant workers – the maximum civil penalty per illegal worker is £10,000; a new criminal offence for employers who knowingly employ illegal migrant workers – this offence now carries a maximum two year prison sentence and/or an unlimited fine; and a continuing responsibility for employers of migrant workers with a time-limited immigration status to check their ongoing entitlement to work in the UK. The new measures do not significantly alter employers' responsibilities. Employers were already required to check a prospective employee’s right to work in the UK in order to establish a defence against conviction for employing an illegal migrant worker. Under the new measures, employers can obtain a statutory excuse from payment of a civil penalty if they have carried out the required checks on a prospective employee’s documents. In addition, employers are required to undertake repeat document checks, at least once a year, for those employees who have limited leave to enter or remain in the UK, if they are to retain the statutory excuse. However, the excuse will not apply where an employer knowingly employs an illegal migrant worker. A code of practice is now available containing guidance on the civil penalties for employers. This contains information on how the level of penalty may be determined and on the documents required for the purpose of establishing the statutory excuse. It can be found on the website of the Border and Immigration Agency at http://www.bia.homeoffice.gov.uk/. Can Big Brother Read Your Emails? 23rd April 2008 Recently amended provisions of the Regulation of Investigatory Powers Act 2000 could further restrict the rights of organisations and individuals wishing to protect sensitive electronic information. Part III of the Act covers the encryption of electronic data and requires holders of encrypted data to provide the means of putting this into an intelligible form when required to do so by the authorities. Failure to do so can lead to criminal charges, with a maximum sentence of up to two years in prison or five years in certain cases relating to suspected terrorism. Many people choose to use readily available encryption programs to encrypt their email, files, folders, documents and pictures. These same technologies can also be used by terrorists, paedophiles and others to hide their criminal activities. If the police or other public agency suspects that data encryption is being used to conceal any kind of criminal activity, then they have the power to serve a notice on the person in control of that data, be it an individual, company director or anyone else with responsibility. The legislation has already been used to demand encryption keys from several animal rights activists. However, the Code of Practice governing the use of such powers allows the data owner or controller ‘reasonable time’ to comply. “Data users can no longer assume that encrypting data means keeping it secret forever,” says Richard Emmett. “Data encryption is a powerful tool that can and should be used to protect sensitive data from prying eyes, but it does not mean that public authorities cannot get at it if required. Avoiding Online Theft 21st April 2008 Theft using IT is a rapidly growing area of crime, with ever-greater sophistication being used to plunder the bank accounts of the vulnerable and to obtain credit and/or goods. The results can be substantial financial loss (in the short term in any event) and a compromised credit history. In a recent case, a small business had its bank account cleaned out over the Christmas period after falling foul of a ‘key reading’ scam when using a laptop to access the account from an hotel. These scams occur when a public place or hotel room has a ‘key reader’ secreted nearby (or key strokes are read from a laptop situated nearby if a wireless system is used). The key reader records the key strokes and stores them, often yielding credit card numbers as well as the information needed to access online bank accounts. Here is a short guide to reducing the chances of theft from your online bank accounts: Make sure you use a secure online bank. The quality of security of Internet banking varies widely. In general, the more interactive (where you respond to prompts, as opposed to just entering information) the access to your account is, the better. Some new accounts offer a card-reader based access which is thought to be highly secure, although a recent report suggests that customers find the use of such devices cumbersome. The key here is to ask yourself how much information a fraudster would need to access your account and how much of that you are inputting. It wouldn’t take too much thought to work out that a surname keyed in by you is probably the correct response to the question ‘what is your mother’s maiden name?’ Make sure anyone with access to your IT or IT security information, or to files where such information is kept, is thoroughly vetted. This might well include cleaners, for example. Do not access your account when away if at all possible. If you do need to do so, use a wired, as opposed to a wireless, connection. Never use an Internet café or similar establishment to access your bank account. Make sure you have a good firewall as well as anti-spyware and anti-virus software and make sure you update it and run system scans frequently (daily if possible). Run a scan of your computer system immediately before accessing your bank account. If you do access your account whilst away, make sure you can prove your whereabouts. That way, if you do suffer a loss, you will be able to prove you could not have made the withdrawals. Annual Increase in Tribunal Awards 19th April 2008 The Employment Rights (Increase of Limits) Order 2007, which details the annual inflation-linked increase in limits on the amounts which can be awarded by employment tribunals, was made on 18 December 2007 and applies where the appropriate date falls on or after 1 February 2008. The main increases in compensation limits are: the maximum compensatory award for unfair dismissal has increased from £60,600 to £63,000; the maximum amount for a week’s pay (for calculating basic award or redundancy payment) has increased from £310 to £330; and the limit on the amount of guarantee payment payable to an employee in respect of any day has increased from £19.60 to £20.40. As there is no statutory cap on the amount a tribunal can award in discrimination cases, the Order does not cover them. The full list of the increases can be found in the Schedule to the Order at http://www.opsi.gov.uk/si/si2007/uksi_20073570_en_2. The general tribunal system in the UK is being reformed, under the Tribunals, Courts and Enforcement Act 2007. Since 1 December 2007, tribunal chairmen have been called ‘employment judges’ as this more accurately reflects the nature of their role. File Your Employer Annual Return Online 12th April 2008 Employers are reminded that the 2007/2008 Employer Annual Returns are due on 19 May 2008 and if you have 50 or more employees, you must file the Return online, otherwise you will incur a penalty. If you have fewer than 50 employees, you will get £100 tax free if you file your 2007/2008 Return online. In order to send your Return electronically, it is necessary to register for online services and it takes at least seven days to get the activation PIN needed to start filing online. For more information, see http://www.hmrc.gov.uk/payeonline/index.htm. Tax Returns – Greater Certainty 17th March 2008 From 31 March 2008, there is an even greater incentive to make sure corporate tax returns are lodged with HM Revenue and Customs (HMRC) on time. From that date, returns lodged by the normal due date will only be ‘open’ for an HMRC enquiry (assuming there is no serious tax irregularity) for one year after they are filed, as opposed to the previous system of one year after the due date for filing. For example, a corporate tax return filed on 1 May 2008 that is due to be filed on 1 July 2008 will only be open for enquiry until 30 April 2009. Previously, such a return would have been open for enquiry until 30 June 2009. Says Richard Emmett, “This change is particularly beneficial for businesses which are in the course of negotiation for sale, as an early filing of the relevant return will allow comfort regarding the tax position to be obtained earlier.” The position for returns filed late is that they remain open for enquiry until the end of the quarter (the quarter dates are 31 January, 30 April, 31 July and 31 October) following the anniversary of the day on which they are filed – i.e. a return due on 1 October 2008 which is filed on 1 November 2008 will be open for enquiry until 31 January 2010. Similar changes are being made in respect of personal tax returns.

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