What you Need to Know to manage Unpaid Invoices in your Private Practice

Resource - Pre-Action Template Letter

Pre-action Protocols for Unpaid Invoices

What Are They?
Before taking a client to court for an unpaid invoice, there are certain steps and behaviours the court expects both parties to follow. These are called pre-action protocols. If there isn't a specific protocol for your situation, you should still follow general pre-action conduct, as detailed below.

Main Objectives:

• Exchange enough information to understand each other’s viewpoints.

• Try to resolve the issue without going to court.

• Consider alternative methods, like mediation, to resolve the conflict.

• Reduce the costs of resolving the dispute.

How to Proceed:

1. Initial Invoice for service provision - Send an invoice to your client detailing the amount, how to pay and the services they are being charged for.

2. Send out a reminder invoice - They may not have received the first invoice, so this is a polite reminder. Also, ask them to contact you if they have any concerns or problems regarding payment so you can invite them to resolve any dispute.

3. Pre-action Letter: Send a clear letter to your client detailing the claim. It should summarise the services provided, the amount owed, how it was calculated, how you have previously tried to claim the payment - ask the client to respond in 14 days - See the pre-action letter template below.

4. Client's Response: The client should reply within 14 days for straightforward cases, either accepting or disputing the claim. If they dispute it, they should explain why and share relevant documents.

5. Expert Involvement: It's rare, but an expert's opinion can be sought if needed. This is typically split cost-wise between both parties.

6. Try to Settle: Always aim to resolve the issue outside of court, using negotiation or alternative dispute resolution (ADR) methods.

Potential Outcomes:

• If a case goes to court and you didn't attempt alternative resolutions or didn't communicate properly, the court might penalise you with additional costs.

• Not engaging in ADR when invited can also lead to additional court costs.

• Not following these protocols can result in various penalties, including paying the other party's costs or altered interest rates on money awarded.

Remember: These protocols don’t change the legal time limits for taking action in court. Always be aware of these limits; if you start proceedings after the expiration, your client can use that as a defence.

Paid subscribers - here is your pre-action template letter and additional information on making a claim