Written by Alex Baker, Paralegal in the Commercial Litigation Team, at Silverback Law

What Is The Small Claims Track?

When a claim is brought at court, and a Defence is received, the court will allocate it to one of three ‘tracks’ which will determine how that case will be handled:

• Small Claims Track
• Fast Track
• Multi Track

The Small Claims Track, also known as the Small Claims Court, is supposed to be a proportionate method of dealing with straightforward cases of limited value, usually £10,000 or below.

Claims within this track ordinarily arise where one party is claiming for money owed by another for goods provided or services rendered.

What Is The Procedure?

The timeline since the date the claim is issued until a final trial should take approximately 6 months but this could vary depending on the court dealing with the case, unless the matter is settled or discontinued beforehand.  

Like every matter, regardless of value or complexity, the parties are always encouraged to contact each other with a view to narrow down the issues or settle matters whilst proceedings are ongoing.

There is a step-by-step procedure to litigation in the Small Claims Track:

1. A claim is issued at Court by the Claimant. The Defendant has 14 days to acknowledge the claim. If the Defendant acknowledges the Claim a further 14 days is allowed to file a Defence. When a defence is filed the case is considered litigated.

• The Court will propose allocation to a specific track (Small Claims, Fast Track or Multi Track) depending on the value.

• The Court will also ask the parties to complete an allocation questionnaire. This will include details of whether you are willing to enter mediation, your preferred county court and witness’ dates of availability.

• The Court will consider the completed allocation questionnaire and allocate the case to a track by sending a notice to the parties. When the court has allocated the claim to the small claims track, the court will confirm the trial date with an estimated trial length, confirm whether the case is suitable for mediation and will give directions. Usually, standard small claims directions will apply. 

Directions are the steps the parties need to follow leading up to the hearing. The hearing may be listed for a remote trial via a video platform, or the court may order a trial to be attended in person instead.

• The parties will receive mediation appointment details by the Small Claims Mediation Service if the Court have considered the case is suitable for mediation.

Mediation can often be quicker and cheaper as it is an alternative to trial where disputes could be resolved without the need for a final hearing. It can be beneficial for parties to settle at mediation as it can save the parties incurring additional costs as a case would normally progress.  

• The parties will then need to comply with all directions given by the Court.

It is imperative that the steps described by the court are followed otherwise there is risk the court may strike out the claim.

• The parties will have to file witness statements and any documents they intend to rely on in evidence 14 days before the final trial. The trial will usually take approximately 2-3 hours unless there are many witnesses.

A witness statement and the documents a party intends to rely on are crucial to the outcome of the trial.

The witness statement will help set out the facts which a party is relying on in the case. The witness will also need to attend the trial as they will have to elaborate on their evidence and will be asked questions by a Judge and the parties. A witness will not be allowed to speak at the trial unless a witness statement for them is filed.

It is important to note that, if a party fails to action the directions by the deadline set out by the court, it will have to make an application to allow the evidence or postpone the trial to another date. It is very likely the party making the application will have to pay out some costs to their opposition.

What Can You Expect At The Trial?

The witness(es) will need to attend the trial whether that be attending in person or remotely.

There is a usual format that a Judge may follow when conducting a trial. However, sometimes the Judge may change or leave out some steps if it is best and easier for the parties involved. This would likely only happen when a party is unrepresented. 

Generally, you should expect a trial to follow in an ordinary format which is:

1. Claimant’s opening statement
2. Claimant’s witness evidence
3. Defendant’s cross-examination of Claimant’s witness evidence
4. Claimant’s re-examination of Claimant’s witness evidence
5. Defendant’s witness evidence
6. Claimant’s cross-examination of Defendant’s witness evidence
7. Defendant’s re-examination of Defendant’s witness evidence
8. Defendant’s closing statement
9. Claimant’s closing statement
10. Judge’s Judgment

A Judge will always give a fully reasoned Judgment to provide the parties with a clear explanation of how that Judgment has been formed.

Can You Recover Your Costs?

In higher value claims, the parties can recover their legal costs. However, in the Small Claims Track only set fixed costs are recoverable for the parties.

An advantage of this is that the parties’ costs exposure is limited meaning the parties need not be deterred in pursuing as they would only be liable for the winning parties’ fixed costs.

The costs that are recoverable are a set amount when the claim is first issued as well as any expenses incurred for witness’ attending the trial to provide evidence.

However, the court may use its discretion to award costs to a party if a party has acted unreasonably throughout the course of proceedings. Although the courts haven’t expressly defined what is deemed to be unreasonable, it could include if a party doesn’t file evidence or attend the trial on the day.

Summary

Litigation in the Small Claims Track is a good tactic to apply pressure on debtors who are simply reluctant to pay, as once a County Court Judgment (CCJ) is obtained, it is likely to provoke payment. You will also be able to enforce the CCJ if required. The litigation process also encourages the parties to discuss the matter and narrow down the issues.

It is likely that most matters can be resolved during litigation by mediation or another form of dispute resolution. Most disputes are settled before trial as it can be more advantageous to accept a lesser sum in settlement to save incurring more legal fees.

The most crucial consideration you should have when deciding whether to issue a claim in the first place is whether the party you are intending to claim against has the funds or assets to pay what you are claiming for. If they do not, irrespective of whether there is a CCJ against them, they will not be able to pay as the financial resource isn’t there.

For further advice on The Small Claims Track, please contact Alex Baker, Paralegal in the Commercial Litigation Team, at Silverback Law on 0844 967 2700

The facts around the credit industry are that insolvencies are on the up, which means so is the risk to your business. 

The Government’s most recent insolvency statistics show that ‘registered company insolvencies’ are 79% higher than in the same month of the previous year’. Even comparing the latest figures with pre-pandemic figures, they are 34% higher. 

Now is the time to look at your preventative measures and make changes to improve and minimise your risk of bad debt. 

Credit information is a great way of assessing your businesses level of risk when taking on new customers and continuing through your trading relationships. 

You can take an unbiased 3rd party opinion, who’s skill is to crunch numbers and create algorithms.  Based on the accounts filed, public record information, economic and industry pressures along with other factors. 

When you’re considering extending credit to potential customers or increasing a current customer’s credit limit, what do you actually want to know?

“Will I Get Paid”?

That’s why industry specific credit information is so much more than a standard credit report. A community of businesses sharing their trading experiences will enable you to build a true picture and really assess the risk to your business. You can see how a business is paying other suppliers right now because, ultimately, we all want to know we are going to get paid, right? 

Prevention is Better Than Cure

Protecting your business from bad debt goes hand in hand with having the ability to grow your business. 

Keeping your cash flowing, protecting your business and minimising the risk of bad debt starts and ends with credit management. 

For construction businesses we offer a free trial of our industry specific credit information and debt recovery services. 

Using our construction specific insider intelligence, our team removed the credit limit back in April for a large civil engineering and groundwork contractor. On the 11th July we confirmed the company had appointed administrators. Our members received our early warnings, over 3 months before any other agency.  

Contact our team of experts on 01527 518800 for more information. 

#1 Construction Industry Credit Reference Agency

About the Author

Emma Reilly, Managing Director – Top Service Ltd

Emma has been working in credit management for over 20 years. She is a member of the Institute of Credit Management and actively works with their mentoring program. 

She has worked with many construction businesses, consulting with them and working to improve their credit management practices, bridging the gap between ‘sales and credit management’ & providing access to industry specific credit information & debt recovery services. 

Emma is a keen advocate for promoting credit management as a positive source of growth within a business. 

‘Access to information that tells you how your customer is paying other suppliers is vital to protect your business from bad debt and improve your businesses cashflow. 

Credit management isn’t just about collecting money. It’s about creating a foundation of information and knowledge to build great business relationships”

Written by Marina Akram, Solicitor, Commercial Litigation at Silverback Law

Partnerships are governed by the Partnership Act 1890 (‘PA 1890’).In order to create a partnership, two or more people may form an arrangement with the intention to carry on a business together with a common view to share profits. Their partnership will be subject to fulfilling the criteria of the definition of a partnership in PA 1890. Whether or not the criteria has been met is a question of fact. 

The partnership cannot acquire its own rights, obligations or hold property in its own right, as it is not a separate legal entity. Therefore, it is worth noting that each partner owes a duty of good faith to their fellow partners in all partnership dealings. Each partner is an agent of the partnership and can possibly bind the partnership, and the other partners, by any action undertaken in the ordinary course of business. Similarly, a partner is jointly liable with the other partners for all obligations and debts that the partnership may incur while they are a partner. 

What is a Partnership Agreement?

A Partnership Agreement is a written agreement that defines the partnership, the relationship between the partners and their contractual obligations. 

The PA 1890 preserves the law relating to partnership but does not provide a complete code of partnership law. Therefore, a Partnership Agreement provides the framework for the day-to-day running of the business, likely areas of dispute between partners and procedures for dealing with them should they arise.

What should a Partnership Agreement include?

A Partnership Agreement can be drafted at any time and to meet each partnership’s needs, and may cover matters as follows: – 

• Category of business
• Description of partnership’s share, assets, authority, liability (restrictions and allowance)
• Accountants name, bank name and premises
• Description of all partner’s duties and responsibilities to the partnership and the other partners
• Capital and income allocation (inc. full time/part time share agreements)
• Holiday, maternity/paternity pay and leave, sick pay and other entitlements for partners
• Use of business vehicle, if any
• Distinguishing between partnership property and property that personally belongs to an individual partner
• Retirement/ Expulsion /Termination of the partnership
• Decision making processes and method of settling disputes.

Importance of a Partnership Agreement

The PA 1890 sets out a number of default provisions explained below that will apply to the operation of a partnership if no specific agreement is entered into. 

• all partners are to share equally in the capital and profits and contribute equally to losses
• the partnership must indemnify any partner for payments and liabilities incurred in the ordinary and proper conduct of the partnership’s business
• every partner may take part in the management of the partnership business
• no partner is entitled to any remuneration for acting in the partnership business
• no person may be introduced as a partner without the consent of all existing partners
• any differences as to ordinary matters connected with the partnership business may be decided by majority vote but a change in the nature of the business requires unanimous consent
• no majority of the partners can expel any partner unless a power has been conferred by express agreement
• where no fixed term has been agreed for the duration of a partnership, any partner may terminate the partnership by giving notice to the other partners. 

The standardised approach can be problematic and unfair. Having a Partnership Agreement can help avoid conflict by pre-empting any potential disagreements. 

Common Problems with an Informal Partnership Agreement

By way of an example, in a two people partnership with an informal agreement, the first partner invests money into the business, carries out more work, pays the utilities, and assists the second partner. In absence of a Partnership Agreement, the default position is that both partners have an equal share, even though the first partner has invested more money, knowledge and time, the assets of the partnership may be shared equally among the partners, which may be deemed as unfair split of the assets. 

Benefits of having a Partnership Agreement

A Partnership Agreement can benefit in various ways:

1. It offers clarity as regards to concerns on distribution of profits 
2. It reinforces any unwritten rules as regards the business therefore decreasing the possibility of misinterpretation between partners
3. A written agreement can assist to prevent expensive and time-consuming court proceedings in the event of a disagreement
4. A Partnership Agreement will override the default provisions of the PA 1980

Conclusion

Many partnerships, especially family-owned businesses, do not have a Partnership Agreement. A Partnership Agreement should be regarded as an investment therefore we strongly advise that all partnerships/businesses should have a recent and carefully considered Partnership Agreement which is tailored to their business needs.

If you don’t have a Partnership Agreement and your business has been operating for a number of years, it is still not too late to formalise the requirements of your business in a written agreement. Further, if you have a Partnership Agreement, it should be checked frequently, especially if there is a change in the Partnership.

For further advice on Partnership Agreements, please contact Marina Akram at Silverback Law, Commercial Litigation Team on 0844 967 2700 or email

marina.akram@silverbacklaw.co.uk.

What makes Top Service Different?

When mainstream agencies look at credit information they number crunch. They use the last set of accounts and any public record information to produce credit limits and scores. It’s a pretty good way to look at credit information but it can overlook information that a person notices, for instance: What has happened from the time the business filed its last set of accounts to the time the credit check is performed?

Top Service Insider Intelligence is construction-specific information that provides up to date, relevant, reliable information to enable more informed business decisions to be made when accepting an application for trade credit. 

As the only credit reference and debt recovery agency specific to the construction industry, we make it our mission to ensure our members receive the most up to date, credit information and company trading experiences. Our insider intelligence can make a real difference between company profit and painful write-offs. 

What you need to know about Top Service:

• Our bespoke collection strategies mean that no case is treated the same. Our access to credit information and exclusive trading experiences enables us to change strategy quickly when our incoming intelligence is received, providing excellent results.
• Fast, effective collections. We know that speed is of the essence, so all collections are given top priority.  We don’t just go through the motions, our experienced and highly skilled team members are adept at tricky negotiations, dispute resolution, tracing absconded debtors and thinking outside of the box to achieve tangible results.
• Fully compliant.  We have been trading for 30 years and we have always taken compliance very seriously.  We are authorised by the FCA and Top Service Ltd is a corporate member of the Credit Services Association (CSA).  All senior Top Service staff are members of the Chartered Institute of Credit Management and collections professionals are hand-picked and trained to the highest standards. 
• We have more than 30 years of experience in collecting commercial and contract debts.

Visit our website for more about Top Service: /why-choose-us/about-us/

Contact our helpdesk team today on 01527 518800 to discuss how Top Service can support and help you protect your business.

National Insolvency figures published (17 June 2022) by the Government’s Insolvency Service have indicated that the number of registered company insolvencies in May 2022 was 1,817:

• 79% higher than in the same month in the previous year (1,014 in May 2021), and
• 34% higher than the number registered three years previously (pre-pandemic; 1,352 in May 2019)

The report also states that in ‘May 2022 there were 1,584 Creditors’ Voluntary Liquidations (CVLs), 70% higher than in May 2021 and 66% higher than May 2019. Numbers for other types of company insolvencies, such as compulsory liquidations, remained lower than before the pandemic, although there were four times as many compulsory liquidations in May 2022 compared to May 2021, and the number of administrations was 95% higher than a year ago.‘

To help protect businesses from insolvency a number of changes were introduced under the Corporate Insolvency and Governance Act (Coronavirus) to protect business from creditor action since June 2020. 

Most of these measures expired at the end of June and September 2021, except for restrictions on winding up companies, which were extended until 31 March 2022. This remaining insolvency restriction has not be extended further, allowing the insolvency regime to return to its pre-pandemic operation.

What makes Top Service Different?

When mainstream agencies look at credit information they number crunch. They use the last set of accounts and any public record information to produce credit limits and scores. It’s a pretty good way to look at credit information but it can overlook information that a person notices, for instance: What has happened from the time the business filed its last set of accounts to the time the credit check is performed?

Top Service Insider Intelligence is construction-specific information that provides up to date, relevant, reliable information to enable more informed business decisions to be made when accepting an application for trade credit. 

As the only credit reference and debt recovery agency specific to the construction industry, we make it our mission to ensure our members receive the most up to date, credit information and company trading experiences. Our insider intelligence can make a real difference between company profit and painful write-offs. 

What you need to know about Top Service:

• Our bespoke collection strategies mean that no case is treated the same. Our access to credit information and exclusive trading experiences enables us to change strategy quickly when our incoming intelligence is received, providing excellent results.

• Fast, effective collections. We know that speed is of the essence, so all collections are given top priority.  We don’t just go through the motions, our experienced and highly skilled team members are adept at tricky negotiations, dispute resolution, tracing absconded debtors and thinking outside of the box to achieve tangible results.

• Fully compliant.  We have been trading for 30 years and we have always taken compliance very seriously.  We are authorised by the FCA and Top Service Ltd is a corporate member of the Credit Services Association (CSA).  All senior Top Service staff are members of the Chartered Institute of Credit Management and collections professionals are hand-picked and trained to the highest standards. 

• We have more than 30 years of experience in collecting commercial and contract debts.

Visit our website for more about Top Service: /why-choose-us/about-us/

Contact our helpdesk team today on 01527 518800 to discuss how Top Service can support and help you protect your business.

Written by Vishal Mahay, Solicitor and Head of Commercial Litigation at Silverback Law

Construction Law is a vast topic with a number of complex areas. This introductory guide is aimed at providing a basic understanding of some of the areas.

Parties involved in a Construction Project

The key parties will usually be:

1. The Developer – may also be known as the ‘employer’ or the ‘client’. This is the party who wants to have the building work carried out and will engage and pay the construction team(s) under the terms of the contract. 

2. The Contractor – or usually the ‘main contractor’. This is the party responsible for doing the main building works and is usually engaged by the Developer under a type of Building Contract. It is worth noting that the Contractor is unlikely to do all the agreed work themselves and it will usually engage specialist trades who will be its Sub-contractors.

3. The Sub-contractors – these are the specialist trades people who are engaged by the Contractor to carry out specific areas of work on the building project such as dealing with foundations, mechanical and electrical lifts, roofing and cladding, amongst many others. The list of types of Sub-contractors can be lengthy and they usually come under a specific area within the Building Contract. 

4. The Consultants – the Developer will usually appoint a number of professional consultants such as Architects, Engineers, Quantity Surveyors and Conservation Experts. The Contractor may also appoint Consultants directly if they have a responsibility for design works. 

5. Interested Third Parties – it is common for a number of third parties to be interested in construction works, for example:

• Funders/lenders (usually banks) providing finance for the works
• Purchasers that have agreed to buy the completed development
• Tenants that are going to move into the completed building
• Landlords/freeholders that own the land or existing building that is being renovated
• Local councils

Construction Contracts

A Building Contract is entered into between the Developer and the Contractor and is crucial to ensure a building project goes as smoothly as possible.

It is used so that parties have a framework to define key particulars such as: 

• who will complete the building work
• the time frame for completion
• the likely costs involved
• the type of materials and designs to be used or adopted

It will also set out the agreed legal terms and it will have all the technical drawings and specifications attached to it. The legal terms will usually cover matters such as:

• the standard of works required
• sub-contracting
• payment
• claiming for extensions of time and/or loss or expense due to variations to the works
• termination
• insurance
• reaching practical completion
• dealing with defects

The legal terms in a Building Contract are unlikely to be entirely bespoke. Over the years, construction industry has developed several standard formsof Building Contract which contractors and developers are familiar with, but which can be adapted depending on the particular project. 

The different standard forms are aimed at a variety of situations such as the size of the project, the way the contract was formed or the particular type of works being carried out.

The most commonly used standard form is the JCT forms of contracts. These are usually available through solicitors. Another form of contract which is widely used is the NEC contract. Both are prepared primarily as English Law contracts. 

The FIDIC forms of contracts are prepared and drafted so that they can be used in any jurisdiction and are suitable for international projects. 

Most construction contracts are prepared by solicitors, experts and engineers. This is advisable, and often preferred, as they will seek to ensure the parties are protected and may anticipate any possible issues that could arise in the future. 

Sub-contractors

Sub-contracts are a common element of any construction work. These contracts are entered into between the Contractor and the Sub-contractors, so are the next step down the contractual chain, after the main building contract. 

The Contractor will want to pass down the obligations it has to the Developer to its Sub-contractors, and the phrase ‘back to back contracts’ is therefore often used. The Sub-contractors are then in a position where they have legal obligations under the sub-contract. 

The main difference is that the Developer does not have direct rights against the Sub-contractors under the sub-contract and therefore does not usually pay them directly, nor should it issue the Sub-contractors with direct instructions as if it were their developer – this is in the control of the Contractor.The Contractor is then still liable under the contract to the Developer.

Pricing structures

The most common forms of pricing structures for construction projects are:

1. Lump sum – the contract sum is agreed before the works start. This is nearly always used in design and build contracts, and traditional contracts are often agreed on a lump sum basis too.
2. Remeasurement – the contract sum is finalised after completion by reference to the works carried out, using a previously agreed basis for payment.
3. Prime cost/cost reimbursable – the Contractor receives its actual costs, plus a fee
4. Target cost (a form of prime cost) – the Contractor receives its actual costs plus a fee, subject to a target cost.

Timeline of a construction project

A simple construction project would typically follow a process similar to the below:

1. Developer carries out viability studies
2. Developer enters into design consultant appointments and has initial designs and site surveys carried out
3. Developer obtains relevant planning permission
4. Design Consultants/Designers/Architects prepare detailed designs
5. Developer goes out to tender, that is it puts out an ‘invitation to tender’ for contractors (construction firms) to submit prices and proposals for carrying out the works
6. Developer and chosen contractor enter into a legally building contract
7. Developer enters into remaining consultant appointments
8. Contractor tenders sub-contract packages and appoints sub-contractors
9. Contractor starts work on site
10. Works progress and construction team applies for monthly or stage payments throughout
11. Works reach practical completion – certain certificates issued
12. Defects liability period (usually for six months to one year) and contractor is liable for correcting defects
13. Certificate of making good defects issued

Conclusion

Construction projects can sometimes be problematic, and each party needs to understand their legal rights and obligations, and indeed the role they need to perform to avoid a breach of the contract terms. It is common for issues to occur, which is why you should consider obtaining professional advice from a solicitor before projects commence.

Should you have any concerns about a construction contract and the obligations and rights of each party, it is advised that legal advice is sought at an early stage. 

For further advice, please contact Vishal Mahay, Solicitor and Head of Commercial Litigation at Silverback Law on 0844 967 2700 or email vishal.mahay@silverbacklaw.co.uk. 

What makes Top Service Different?

When mainstream agencies look at credit information they number crunch. They use the last set of accounts and any public record information to produce credit limits and scores. It’s a pretty good way to look at credit information but it can overlook information that a person notices, for instance: What has happened from the time the business filed its last set of accounts to the time the credit check is performed?

Top Service Insider Intelligence is construction-specific information that provides up to date, relevant, reliable information to enable more informed business decisions to be made when accepting an application for trade credit. 

As the only credit reference and debt recovery agency specific to the construction industry, we make it our mission to ensure our members receive the most up to date, credit information and company trading experiences. Our insider intelligence can make a real difference between company profit and painful write-offs. 

What you need to know about Top Service:

• Our bespoke collection strategies mean that no case is treated the same. Our access to credit information and exclusive trading experiences enables us to change strategy quickly when our incoming intelligence is received, providing excellent results.

• Fast, effective collections. We know that speed is of the essence, so all collections are given top priority.  We don’t just go through the motions, our experienced and highly skilled team members are adept at tricky negotiations, dispute resolution, tracing absconded debtors and thinking outside of the box to achieve tangible results.

• Fully compliant.  We have been trading for 30 years and we have always taken compliance very seriously.  We are authorised by the FCA and Top Service Ltd is a corporate member of the Credit Services Association (CSA).  All senior Top Service staff are members of the Chartered Institute of Credit Management and collections professionals are hand-picked and trained to the highest standards. 

• We have more than 30 years of experience in collecting commercial and contract debts.

Visit our website for more about Top Service: /why-choose-us/about-us/

Contact our helpdesk team today on 01527 518800 to discuss how Top Service can support and help you protect your business.

Companies House is a government department that was set up in 1844 to act as a central register for limited companies.  More than 14m limited companies have been registered by Companies House over the past 178 years.  10m of those companies were registered in just the last 20 years.  Of course many of those companies have since ceased to exist and the actual ‘live’ register of companies currently stands at about 4.9m companies.  

The register is public so anyone can search for limited company information, at no cost, at https://find-and-update.company-information.service.gov.uk

“Recent statistics released by Companies House reveal that the pandemic didn’t have a detrimental effect on the overall growth of the limited company register which means that businesspeople had enough confidence to continue incorporating limited companies despite the challenging trading conditions,” Lisa Cardus, Founder Top Service Ltd.

It’s worth noting that Companies House is just a repository for information. Companies House does not check the veracity of the data that is filed.  There is a disclaimer on the Companies House website that states:

“We carry out basic checks on documents received to make sure that they have been fully completed and signed, but we do not have the statutory power or capability to verify the accuracy of the information that companies send to us.  The fact that the information has been placed on the public record should not be taken to indicate that Companies House has verified or validated it in any way.  When Companies House examines accounts it only makes basic checks on them, for example to ensure that the appropriate documents are there, that they are for the correct financial year and that they have been signed”.

It is impossible to gauge how much of the data stored at Companies House is inaccurate, incomplete or even false.  It is likely to be a very small proportion of the total information and there is no doubt that data stored at Companies House plays an important part in the credit checking process when extending credit to a new limited company customer.  There is, however, no need to be completely reliant on publicly filed limited company data.  

Credit reference agencies can add value to the credit checking process above and beyond the Companies House data.  At Top Service Ltd we specialise in construction sector credit referencing so we have a wealth of data that relates to the trading histories of companies in the sector going back 30 years.  In addition to historical information we have up-to-the-minute trading experiences from our network of 3,000 clients, in effect, a national grapevine of live credit information.  We also utilise our specialist IT systems and the instincts of our credit experts to highlight and investigate suspicious activity.  Our experienced credit investigators carry out in-depth investigations to ensure that our clients minimise their chances of incurring a bad debt.

Contact our helpdesk team today on 01527 518800 to discuss how Top Service can support and help you protect your business.

National Insolvency figures published (17 May 2022) by the Government’s Insolvency Service have indicated that the number of registered company insolvencies in April 2022 was 1,991:

• More than double the number registered in the same month in the previous year (925 in April 2021), and
• 39% higher than the number registered three years previously (pre-pandemic; 1,429 in April 2019).

The report also states that in April 2022 there were 1,777 Creditors’ Voluntary Liquidations (CVLs), more than double the number in April 2021 and 74% higher than April 2019.

On the 28th March 2022 the Government has announced that the last of the Temporary Insolvency Restriction Protections are being lifted. 

To help protect businesses from insolvency a number of changes were introduced under the Corporate Insolvency and Governance Act (Coronavirus) to protect business from creditor action since June 2020. 

Most of these measures expired at the end of June and September 2021, except for restrictions on winding up companies, which were extended until 31 March 2022. This remaining insolvency restriction will not be extended further, allowing the insolvency regime to return to its pre-pandemic operation.

Post Insolvency Debt Collection Service

We provide Insolvency Practitioners with a tailored end to end Post-Insolvency Debt Collection Service. We provide our service in collaboration with Silverback Commercial Law who offer competitive rates if legal action is required to recover monies owed. 

What we offer

• Free of Charge Ledger Consultation
• Collections Process with online access to live information on all cases
• Retention & Contract Collections
• Legal Action to Recover monies owed
• Dispute resolution

What makes us different?

• Our bespoke collection strategies mean that no case is treated the same. Our access to credit information and exclusive trading experiences enables us to change strategy quickly when our incoming intelligence is received, providing excellent results.
• Fast, effective collections. We know that speed is of the essence, so all collections are given top priority.  We don’t just go through the motions, our experienced and highly skilled team members are adept at tricky negotiations, dispute resolution, tracing absconded debtors and thinking outside of the box to achieve tangible results.
• Fully compliant.  We have been trading for 30 years and we have always taken compliance very seriously.  We are authorised by the FCA and Top Service Ltd is a corporate member of the Credit Services Association (CSA).  All senior Top Service staff are members of the Chartered Institute of Credit Management and collections professionals are hand-picked and trained to the highest standards. 
• We have more than 30 years of experience in collecting commercial and contract debts.

To discuss our Post Insolvency Collections Service with a member of our expert team please email insolvencycollections@top-service.co.uk.

Are you struggling to recover the money you are owed?

Contact our helpdesk team today on 01527 518800 to discuss how Top Service can support and help you protect your business.

Redditch based company, Top Service Ltd the only credit reference and debt recovery agency specifically for the construction industry has announced it will provide staff with a £250 payment in October 2022 to help with the rising cost of living and soaring energy bills.

In addition to the Government’s £200 discount on gas and electricity bills towards the end of the year of which ‘all households with a domestic electricity connection will be automatically eligible for.’ Top Service Ltd will provide all its staff with a ‘one off’ winter fuel payment subsidy of £250 in October 2022. Aimed to help address the concerns many of its forty plus staff have as the cost of living rises due to the unstable global supply of energy which has led to the UK seeing record breaking price increases. 

“At Top Service Ltd we endeavour to do our best to support our employees and with this in mind, we will be providing each employee, with a one off ‘winter fuel payment’. Within the month of October 2022 employees will receive a one off payment of £250.00. We hope that this, along with the support being offered from the Government will go some way to ease any concerns our staff may have with regards to the rises in cost of living,” Emma Miller, Top Service Ltd Joint company Director.

For 30 years plus Top Service Ltd has remained constant in support of the construction sector and its staff providing an invaluable source of support for its members and employees during the pandemic and now in the wake of the worst economic challenges in decades.

Updates and further information on the government energy support scheme can be found on the .gov website: https://www.gov.uk/government/news/energy-bills-support-scheme-explainer

Notes to editors:

Top Service Ltd is the only specialist credit reference and debt recovery agency for the UK construction industry. Top Service currently have thousands of companies subscribing to their service with around 6,000 branches and depots between them, spanning many different sectors in the construction industry. Top Service credit reports contain unique trading experiences which are sourced from thousands of their members, all trading in and around the construction industry. For more than 30 years Top Service have helped the construction industry avoid problem payers and reduce bad debt. All of their members benefit from access to their unique and invaluable credit information and effective recovery services.

About Top Service: /why-choose-us/about-us/

For more information please contact:

Debbie Garner Head of Marketing and Development:
Telephone: 01527 503991
Email: marketing@top-service.co.uk

Written by Zahida Shah, Silverback Commercial Law Services

What is a Purchase Order?

A purchase order is a commercial document whereby one business lets a supplier know they intend to buy goods from them. 

This is the reverse of an invoice because it is a list of items the business intends to buy and will include information such as the price and quantities they wish to purchase.

A Purchase Order will contain key information such as: 

• Purchase Order number
• The date the Purchase Order was issued
• Goods and Services the Buyer requires
• The required quantity of those Goods and Services
• The agreed price
• Delivery costs and details
• Payment Terms
• Other Terms and Conditions

Why use a Purchase Order?

Purchase Orders can be useful documents for both parties.

• Spend Control 
  • For the Buyer, a Purchase Order is important for spend control, and can act as a check and balance to ensure purchases are within allocated budgets. This enables the Buyer to forecast its outgoings at an early stage rather than waiting for invoices to determine their expenditure. They will therefore have a more accurate picture of their financial position at any given time. 

• Promote Prompt Payment
  • For the Supplier, Purchase Orders can be matched to the corresponding invoices and delivery notes, which should promote prompt payment. 

• Record Keeping
  • For the Buyer, it can be a vital part of record keeping because there will usually be a Purchase Order number allocated to each purchase. This will help a Buyer to keep track of exactly what they intend to purchase, at what price and when.
  • For the Supplier, this should assist in accurately supplying those exact items and thereby minimise Supplier errors and scope for disputes. 

• Avoid Disputes
  • For the Supplier, with a well drafted Purchase Order, Suppliers can avoid unnecessary (and common) disputes from Buyers over whether Goods/Services were authorised, which often leads to delayed payment.
  • For the Buyer, it offers some assurance that an invoice received will reconcile with the Purchase Order. Should there be errors or disputes they are easier to reconcile and rectify as there is a coherent record of the agreement.  

What does the Purchase Order process look like in a typical transaction?  

• A Buyer will raise a Purchase Order after the parties have agreed a price
• A Buyer will send the Purchase Order to the Supplier 
• The Supplier then accepts the Purchase Order, if it can fulfil it (and it becomes legally binding)
• The Goods/Services are provided by the Supplier
• The Supplier raises an invoice with reference to the Purchase Order Number
• The Buyer matches up the Invoice and Purchase Order Number
• The Invoice is processed and paid 

Record Keeping Document or Legally Binding Document?

In its simplest form, a contract is formed if there is an offer, acceptance, consideration and there has been an intention to enter into a legally binding agreement.  

The Purchase Order fits in right at the start; it is an offer from the Buyer/Supplier to purchase/supply a goods or services at a certain price.

A Purchase Order is a legally binding document only once it has been accepted by both parties. It is effectively a contract between the Buyer and Seller for goods for the price and terms agreed within. 

A Supplier could raise a Purchase Order and send it to their Buyer customer, and this would act as a notification of the Buyer’s legal obligations to pay the agreed amount. 

Other Considerations 

1. Inaccuracies 

As a Buyer you would need to be aware that, when you receive a Purchase Order, you are obliged to pay the amount on it. If amounts or quantities are incorrect, these should be challenged immediately, and a new Purchase Order must be issued to protect your position. 

2. Terms and Conditions 

Purchase Orders often contain Terms and Conditions, so it is very important to consider these before accepting the Order.  

Quite often, Suppliers will have a Trade Credit Account Agreement with their Buyers, to which its standard Terms and Conditions apply to ‘all purchases’. Accepting a Buyer’s Purchase Order, which contains the Buyer’s Terms and Conditions, could effectively incorporate these additional Terms into the Contract. 

In most cases, these might not be contradictory to your own Terms and Conditions as a Supplier but, without checking, you raise the risk of entering a legally binding contract to which these new terms apply. 

For example, the standard payment terms in your Trade Credit Account Agreement could be overridden by the Purchase Order, extending the time the Buyer has to pay an invoice.

3. Third Party Purchase Orders

Proceed with caution where Purchase Orders indicate that they are on ‘behalf’ of another party. 

These Purchase Orders usually stipulate that a third party should be invoiced, rather than the Buyer. 

If an invoice becomes overdue, and further credit control action is required, this brings some ambiguity to whom the parties to the contract are. It is generally these sorts of disputes that lead to unpaid invoices and proceedings which can be costly and time consuming. 

4. No Purchase Order, No Payment’

As a Supplier, you may receive a request for all invoices to contain a Purchase Order Number or they will not be paid. 

Therefore, in order to encourage swift payment, and reduce the burden on your credit control function, it is vital to keep an accurate record of all Purchase Order Numbers, and to use these on your invoices, where possible.

However, should you not be able to locate a Purchase Order or Number, you should still issue invoices. There is no need to immediately write off or credit such invoices, particularly where you can prove that you have completed your contractual obligations by providing the goods/services in question.

By doing so you will have put the Buyer on notice that payment for goods/service is due. You will have also started the clock running and may be entitled to additional charges such as interest and compensation. 

Conclusion 

Purchase Orders can be highly beneficial to both the Buyer and Supplier in terms of record keeping.  Purchase Orders can also assist a Buyer to control and forecast spending, and assist a Supplier with prompt payment of invoices. 

A business must ensure the Purchase Order is properly worded and the information contained within them is considered and agreed by all parties, whether they receive them or issue them. 

It is good business practice, and vital for general credit management from a Supplier perspective, to regularly review ways of improving your system in respect of Purchase Orders and additional transactional documents such as invoices and Proof of Delivery.

For further assistance in respect of the legal implications of your invoices, or for further advice on how Silverback Law can best support your business, please contact Vishal Mahay, Head of Commercial Litigation on 0844 967 2700 or email vishal.mahay@silverbacklaw.co.uk 

What makes Top Service Ltd different? 

As the only credit reference and debt recovery agency specific to the construction industry, we make it our mission to ensure our members receive the most up to date, credit information and company trading experiences which can make a real difference between company profit and painful write-offs. 

Are you struggling to recover the money you are owed?

Top Service members have access to an exclusive combination of no collection, no fee recovery services.

Contact our helpdesk team today on 01527 518800 to discuss how Top Service can support and help you protect your business.

National Insolvency figures published (22 April 2022) by the Government’s Insolvency Service have indicated that the number of registered company insolvencies in March 2022 was 2,114:

• More than double the number registered in the same month in the previous year (999 in March 2021), and
• 34% higher than the number registered three years previously (pre-pandemic; 1,582 in March 2019).

The report also states that `in March 2022 there were 1,844 Creditors’ Voluntary Liquidations (CVLs), more than double the number in March 2021 and 62% higher than March 2019.’

On the 28th March 2022 the Government has announced that the last of the Temporary Insolvency Restriction Protections are being lifted. 

To help protect businesses from insolvency a number of changes were introduced under the Corporate Insolvency and Governance Act (Coronavirus) to protect business from creditor action since June 2020. 

Most of these measures expired at the end of June and September 2021, except for restrictions on winding up companies, which were extended until 31 March 2022. This remaining insolvency restriction will not be extended further, allowing the insolvency regime to return to its pre-pandemic operation.

Post Insolvency Debt Collection Service

We provide Insolvency Practitioners with a tailored end to end Post-Insolvency Debt Collection Service. We provide our service in collaboration with Silverback Commercial Law who offer competitive rates if legal action is required to recover monies owed. 

What we offer

• Free of Charge Ledger Consultation
• Collections Process with online access to live information on all cases
• Retention & Contract Collections
• Legal Action to Recover monies owed
• Dispute resolution

What makes us different?

• Our bespoke collection strategies mean that no case is treated the same. Our access to credit information and exclusive trading experiences enables us to change strategy quickly when our incoming intelligence is received, providing excellent results.
• Fast, effective collections. We know that speed is of the essence, so all collections are given top priority.  We don’t just go through the motions, our experienced and highly skilled team members are adept at tricky negotiations, dispute resolution, tracing absconded debtors and thinking outside of the box to achieve tangible results.
• Fully compliant.  We have been trading for 30 years and we have always taken compliance very seriously.  We are authorised by the FCA and Top Service Ltd is a corporate member of the Credit Services Association (CSA).  All senior Top Service staff are members of the Chartered Institute of Credit Management and collections professionals are hand-picked and trained to the highest standards. 
• We have more than 30 years of experience in collecting commercial and contract debts.

To discuss our Post Insolvency Collections Service with a member of our expert team please email insolvencycollections@top-service.co.uk.

Are you struggling to recover the money you are owed?

Contact our helpdesk team today on 01527 518800 to discuss how Top Service can support and help you protect your business.