In Focus Commercial Credit Enforcement: time for change?
Last month, a group of enforcement professionals joined a debate led by CCRMagazine and Equita, they were; Ann Lloyd, partner, Lester Aldridge; Phil Sheard, partner business services, Hill Dickinson (PS); Myra Scott, partner – lender services and debt recovery, Aberdein Considine (MS); Nigel Coe, managing director, Restons Solicitors; Max Houghton, operations director Restons Solicitors; Philip Roberts, partner, Clarke Willmott; Penny Daisley, debt recovery manager, Debenhams Ottaway; John Burke, credit manager, Cadent (JB); Jayne Gardner, head of debt recovery, Shakespeare Martineau (JG); Stephen Perry, senior section manager – financial services disputes and investigations, Eversheds Sutherland (SP); Ian Strangward, customer finance manager, Karndean Designflooring (IS); Mark Taylor, partner, Wilkin Chapman (MT); Allan Poole, credit & operations director, Waters & Gate; Jackie Ray, partner, Blaser Mills; Rob Thompson, partner, Brachers (RT); Lorna Trueman, partner, Flint Bishop (LT); Peter Littlefair, client relationship manager, Flint Bishop; Debra King, international collections specialist, Lovetts Solicitors (DK); Wendy Miles, litigation executive, Lovetts Solicitors; Rob Aberdein, partner – banking litigation, Walker Morris (RA); Frank Johnstone, partner, Dentons (FJ); and Alan Smith, operations director, Equita
‘you have to stick to PAP rigidly, otherwise you are in trouble on costs’. When I had that conversation with them, and asked if they had thought about various scenarios, then they acknowledged that we had a point. But the trouble is that we are facing district judges all around the country, and how persuaded are they going to be of a genuine need to deviate?
FJ: Following on from the FCA’s regulation of the consumer-credit sector, there was a degree of uncertainty, or nervousness, on the part of some consumer creditors in relation to the issue of forbearance. I think some creditors misunderstood the nature of forbearance, but that it is concept that they are becoming increasingly familiar with and this may be reflected in the increase in county-court actions. It is not necessarily in the consumer’s interests not to bring the matter to court.
IS: From a credit manager’s perspective, in terms of trade credit, there is real concern
about the current economic climate. A lot of businesses that we deal with are limited companies. For Karndean – and for many of the credit managers I speak to – the issue is: when we are going for it, we want to go faster. But there is a decrease in numbers of debts we choose to take down that route; there are a considerable number of zombie companies out there with no assets to pursue or who close overnight without any formal insolvency process. We are looking at ways to turn the screw earlier, and try to provoke a response without resorting to legal action. As we credit insure, a letter to the debtor advising that we credit insure, and the impact of not paying, often prompts a response – this has worked for us. As a credit manager, it is a case of constantly refreshing what you are doing, thinking about different ways of approaching things. We are returning to the olden days of using our sales reps more before we decide to go legal, asking them to pay a visit, or at least a ‘drive-by’, to help us decide whether it is worth bothering.
JB:We are trying to prevent cases going legal, so we have started an initiative to review the recovery process by looking at what sort of information we get to bill, and if the data is a ‘good pass’ (where there is a lot of supporting documentation), then that gives you the confidence to accelerate it through the process, avoiding disputes and collecting the cash earlier. If you do not have that solid basis of creating an invoice and sending it out accurately and in a timely manner, then that is going to create an issue where you have a dilemma where you do not know whether to send it through litigation or just write it off. The landscape has totally changed now, as people used to just pay or negotiate, but now they challenge every single line on an invoice. So you have to have the right supporting documentation, validation, and photographs, everything to support that invoice and give you the confidence you need to proceed for recovery.
MS: There is now much more of an emphasis on doing the work to
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Left-right: Mark Taylor; Myra Scott; Nigel Coe; Phil Sheard; Philip Roberts April 2018
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