Lovetts Reveals Late Payers Face Faster Action

LONDON UK (January 20, 2012) - Late Payers Face Faster Action
As Businesses Tackle Debt Head-on
www.lovetts.co.uk

Businesses are tightening their credit policies and enforcing payment terms with the threat of legal action much sooner in the face of slow growth and difficult trading conditions according to the latest report from debt recovery law firm, Lovetts. In Q4 2010, businesses were waiting 97 days on average before they threatened legal action (with a Letter Before Action) to secure payment, in Q4 2011, this dropped to 91 days. And once that LBA is sent, debtors are getting 2 days less to make the payment before a legal claim is actioned.

Charles Wilson, Chairman and Managing Director of Lovetts, said “There’s definitely a feeling of businesses battening down the hatches to ride out the economic storm. Issuing an LBA at 91 days is a significant change from where we were a year ago and a clear signal that economic conditions and the problems in the Eurozone are prompting a change of behaviour in the finance and credit departments of firms across the UK.

“It makes absolute sense in the current climate to put cashflow at the top of the priority list. That means taking a much firmer line on late payers and letting them know you mean business. The days of tip-toeing around the issue are well behind us – a customer that doesn’t pay on time is a debtor and by acting quickly and decisively on outstanding payments businesses will discourage late payment becoming a regular habit.

Lovetts has also seen the value of debts being pursued through the courts rise by almost 8% year on year suggesting that businesses are putting much greater focus on recovering larger debts which will have the biggest impact on cashflow.

Charles Wilson concludes: “In many cases, businesses have nothing to lose by chasing a claim through the legal system. It is vital threats of legal action are carried out where warranted or it will be a case of ‘crying wolf’ and future threats will be much less effective. Fortunately what many businesses are increasingly coming to realise is that a successful legal claim will recover interest and include most legal costs. In some cases the debtor will even have to pay compensation to the firm.”

ENDS
January 2012
Notes to Editors
Lovetts Plc is one of the UK’s leading law firms whose sole line of business is the recovery of overdue debts and any commercial litigation resulting from debtor/creditor agreements.
Through this specialism and over 20 years in the debt collection industry, Lovetts has developed industry leading software for the efficient management and prompt recovery of debts, both in the UK and overseas.
Lovetts was the first UK law firm to become a Public Limited Company in 1994.
For further press information please contact Jen Thorneywork or Alison Reeson at HSL on 0208 977 9132 or email lovettsteam@harrisonsadler.com