Merton Solicitors

What is a statutory demand?

A statutory demand requests payment of a debt.  It is a document sent to a debtor stating the amount, the contact details of the creditor, the length of time they have to repay the debt, what will happen if the debt is not paid and the debtor’s legal rights to challenge the debt using legal means.  Debtors are given 18 days to challenge the demand through a court application or 21 days to reply to the statutory demand.

When should I use a statutory demand?

If you decide to use a statutory demand, you should be prepared to follow up the demand with action.  If you don’t then the debtor might take you less seriously and be even more difficult to contact.  You should also consider the size of the debt.  If it is larger than £750, then you will be able to bring bankruptcy proceedings and thus back up your demand with concrete legal action.

How can I enforce a debt through the courts?

The majority of cases will go through the county courts.  There are three levels in the county court and the level at which the case is heard depends on the case’s complexity and the size of the debt.  Debts up to £5,000 will generally go through small claims.  Debts ranging from £5,000 to £25,000 will generally go through ‘fast-track’.  Debts bigger than £25,000 will generally go through ‘multi-track’.  Debts larger than £50,000 will generally go through the high court.

What is involved in small claims?

Small claims courts are generally less formal than higher courts and are designed to be more accessible to the lay person.  Evidence does not have to be given under oath and awards for legal costs will not usually be given.  However, it is expected that the parties exchange witness statements and other relevant documents prior to the hearing.

How do solicitors tackle debt recovery differently compared to debt recovery agencies?

Debt recovery agencies have become very common in recent times.  They are generally a cheap way of recovering a debt because they deal with large case volumes using a standardised approach.  Think of it as the ‘pile em high, sell em cheap’ approach.  This standardised approach does not, however, take into account the all the circumstances that might effect the outcome.  You might want to maintain a relationship with a good customer.  A blunt statutory demand demanding that the debt is paid may not be conducive to this.

Specialist debt recovery solicitors use more of a consultative approach by informing the client of their options and possible outcomes of pursuing any particular channels.  In essence, the approach used can be tailored to the circumstances, so if you want to preserve a relationship with a pre-existing customer, this can be achieved by using softer ways of asking for the debt to be paid.  It is also true that communications from solicitors are generally taken more seriously as the debtor realises there is a good chance that failure to acknowledge any letters might result in further legal action, including litigation.

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