Recovering Payments

INTRODUCTION

The main thing to remember is that payment delays happen all the time, and are rarely deliberate. Very often it’s down to a lack of funds in the account which the client has set up for payments, but expired and cancelled cards are very common too, often due to online fraud.

First Contact

A good starting point is usually to make clear that, while you are keen to continue supporting the student, you will not be able to do so while payment for sessions remains outstanding. It is rarely necessary to put this into action. If this is not an option, for example if tuition has ended, and if a firmer request for payment has not yielded results, then you may need to take more formal action. The client will usually have received an automatic notification that their payment is delayed. That will be enough to prompt most clients to action, and you may not need to do anything at all.

If you do decide to get in touch, all that is usually necessary at this stage is a polite reminder that there is a bill outstanding. The end of a tuition session is usually a good time to give this kind of nudge.

At this stage, the client may request some kind of delayed payment arrangement, if they are having difficulty. Of course this is up to you, but we have tended to find that accommodation in these cases (where the plan proposed is reasonable) gives the best results in the long term.

Significant Delay

If your polite reminder has received no response, or the client has failed to stick to an agreed payment schedule, then a stricter approach may be necessary.

A good starting point is usually to make clear that, while you are keen to continue supporting the student, you will not be able to while payment for sessions remains outstanding. It is rarely necessary to put this into action If this is not an option, for example if tuition has ended, and if a firmer request for payment has not yielded results, then you may need to take a firmer and more formal position:

Prolonged Delay

Where communication has failed, or you have been unable to reach a reasonable agreement, then your next recourse is legal enforcement.

Letter Before Action

    • The first step towards legal action is to send a formal Letter Before Action. Often these are sent by solicitors, but any creditor can send one. These can be sent as an email attachment, but you will need to post a copy as well for it to be considered legitimate. You can add an electronic signature in programmes like Adobe, to save printing it out. We have found that even a preliminary email to let the client know that they will be receiving such a letter is usually enough to prompt contact, and in the remaining cases the letter itself usually does the trick. There is no set formula for letters before action, but below is a template which you can adapt:
    • Dear NAME,Following my email of DATE, this letter is to make you aware that INV (of which a copy is included with this letter) is now significantly overdue for payment. This invoice was raised on DATE, and was due for payment by DATE.

      If you wish to raise any objections to the charges included in this invoice, please email me at EMAIL ADDRESS, or call me on NUMBER. Otherwise, please contact me to arrange payment at your earliest convenience, and no later than 14 days from the date of this letter.

      If I do not hear from you within this time, I will proceed to legal action via the County Court. This will entail a hearing, which you will be required to attend. Otherwise, judgement will be given in your absence, and you will be required to pay the amount owed immediately, and in full.

      The total amount owed will include the legal costs associated with a court hearing, and any enforcement action which may be required to ensure payment, along with any interest sanctioned by the court. The lifetime cost of an unpaid County Court Judgement can be substantial.

      I would strongly encourage you to contact me before this stage.

Legal Claim

    • Assuming that you receive no satisfactory response to your letter, the next step is to submit a claim via the Money Claim Online Service (MCOL) [https://www.access.service.gov.uk/login/signin/creds]. However, it is only fair to warn you that this is rarely successful, and debtors who have not responded to a letter before action are unlikely to respond to the court.
    • This will only be possible for debtors based in England and Wales. For debtors in Scotland there is a different procedure [https://www.scotcourts.gov.uk/taking-action/simple-procedure]. Since the departure of the UK from the European Union, the international claims process is no longer available, and any claims must be submitted directly through the courts in the relevant member state. Outside the EU, it is very difficult to pursue small claims at all. The minimum threshold in the UAE for example is £10,000.00.
    • The soonest that you can submit a claim through MCOL is 19 days after the date on which your letter was posted (it will be considered served after five days, and you are then required to wait for two weeks). There is a fee for this service, usually £35, but higher for debts over £300.00. This fee is recoverable from the debtor.
    • You will need to sign up for a Government Gateway account, if you do not already have one. Further information on this process is available here [https://www.gov.uk/make-court-claim-for-money]
    • You will then be required to submit contact information for yourself and the debtor, particulars of the claim, and a brief summary of the claim. Again, we have included a template below:

      Summary

      • This claim relates to an invoice raised on DATE, for HOURS hours of private tuition provided by me to CLIENT, between DATE and DATE. This invoice was due for payment by DATE.
      • I have received no response to my attempts to contact the debtor, including a formal Letter Before Action.

Hearing

    • Once the claim has been issued, the debtor will be given the opportunity to respond, and the court will issue a summons to require the debtor to attend a hearing. If they fail to respond within the required period, the court will most likely issue a judgement in your favour by default, and require the debtor to pay the amount owed, plus any court fees.
    • If the client does respond, and agrees to a hearing, then you will be required to attend in order for the claim to proceed. The hearing will be arranged at the county court nearest to the debtor’s home address, so this is likely to entail travel. If you fail to attend the claim may be struck out in your absence and your court fees will be forfeit.
    • Hearings of this kind do not usually last very long at all, and the main inconvenience is the requirement for travel.

Enforcement

  • If a county court judgement (CCJ) is issued, and the debtor is ordered to pay, then they will usually be allowed to do so via instalment. It is possible for a debtor to request very small instalments over a protracted period.
  • If they fail to make a required payment (including individual instalments) then you may apply for a ‘warrant of control’ via MCOL. This, in effect, is a request for recovery of the amount owed in money or goods by servants of the court (bailiffs). The fee for this service is usually £70.00. Enforcement via this method is usually extremely slow, and has a very low rate of success. We have only ever recovered payment from one debtor via this method.
  • There are other options for enforcement, including attachment of earnings or third party debt order (see https://www.gov.uk/make-court-claim-for-money/enforce-a-judgment for details) but these are expensive and also have a poor track record of success. Unfortunately the chances of recovering a debt via the county court are, in general, very low. The value of a CCJ is mainly as a barrier to credit, for example when arranging a mortgage, so the debtor may feel no need to make payment until they require credit, which may be several years later.