The difficulties in chasing invoices in Scotland

It's all a bit different north of the border

Scotland has the worst late payment record in the UK according to the Paul Hopkins and Kenny Richmond of Scottish Enterprise. In a report covering business activity north of the border they said that in 2015 there was £1.8m in unpaid invoices with 67 percent of firms hit by late payment.

The situation in the rest of Britain wasn’t much better with 66 percent of Northern Ireland’s firms affected, 62 percent of companies in England had outstanding invoices and Wales faired a little better with under 60 percent of firms affected.

ICSM credit’s members have raised the issue of chasing payment from Caledonian companies as the law in Scotland is slightly different from south of the border and in Wales. The advice from those members who have had to chase payment in Scotland is: “In short and realistically all you/we can do to recover a Scottish debt is to chase them as hard as possible by phone, email and postage.” The main reason is the more complex court procedure in Scotland in getting a judgement, charging interest on overdue monies and recovering costs and of course the actual amount owed.

This advice has been passed onto to members of ICSM Credit and for that matter anyone in business seeking redress in the Scottish courts:

“To apply for judgment against a Scottish debtor after lodging the claim, if no response is received from the debtor, then Judgment in default can be requested. However, this is where the process starts to differ as, rather than simply submitting a form as with English debts, an application has to be made to the Court for permission to enter Judgment. Costs can be requested as part of the application but there is no guarantee that the costs will be awarded and in a lot of cases as mentioned above, they are not. It is very much up to the discretion of the Judge in awarding the costs. The application must also be supported by a sworn affidavit, draft order and a schedule of costs, together with another application fee of £100.00 this is on top of the claim fee paid at the very beginning when the claim was started. A judge then has to approve the order and grant permission for Judgment to be entered. This can take an additional 4-6 weeks.

“The Judgment will then need to be registered in Scotland. To do this, a certificate of money provisions needs to be obtained. This requires a further application to the Court and another fee for an application which is a further £100.00. The application must set out the following:

“Full particulars of the Judgment;

“The name and address of the Judgment creditor and, if known, of the Judgment debtor;

“That the Judgment is not stayed;

“The date on which the time for appealing expired or will expire;

“Whether an appeal notice has been filed;

“The status of any application for permission to appeal; and

“Whether an appeal is pending.

“Once a certificate of money provisions has been obtained, it needs to be registered with the Books of Council and Session in Scotland; this requires a £10.00 fee sent along with the sealed certificate of money provision.

“Once the Judgment has been registered in Scotland, enforcement action can then be taken against the debtor however the matter must be referred to a Scottish Enforcement Agent, at which point they will issue and serve a charge. In doing this, they will issue a document which states the balance that is owed and provides a date for payment to be made; they will then attempt to personally serve the document on the debtor.

“When doing this, they usually also try to request information from the debtor, such as information about the bank that they use and whether they have any assets of value such as machinery, a car or property. This information helps to decide what action should be taken next in the event that the debtor does not satisfy the debt within the timeframe specified at which point we can then start enforcement action. The enforcement options available for a Scottish debtor are very similar to that of English/Welsh enforcement options.”

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