![]() Deciding to take legal action on an unpaid invoiceĪs a small business owner, taking legal action against a non-paying customer can be a daunting prospect, but you shouldn’t be put off – you deserve to be paid for all of the work you do. In this expert guide, founder and Chairman of LawBite, Clive Rich, and barrister Belinda Naiken-Payne explain the legal recourse open to small business owners when all other options have been exhausted. Most payment disputes can be avoided with a clear invoicing process or resolved with a gentle reminder – but what can you do if your customer simply won’t pay? If the dispute is complicated, and yet it’s important to both parties that it would be resolved quickly, it’s recommended to discuss the possibility of arbitral court with the client or business partner.What if your customer won't pay? A lawyer's guide for small business owners Even if the contract didn’t state that the dispute must be solved in arbitral court, that kind of agreement can still be made after the dispute has occurred. A positive court decision that has taken effect is an execution document, based on which it is possible to initiate execution proceedings. If the agreement isn’t likely to happen, the decision will be up to the court. It’s possible to continue negotiations and settle the dispute with a compromise whilst the court proceedings are still ongoing. If the amount or existence of the claim is disputed and parties are unable to reach an agreement, they can file a claim to the court. We covered those options during our dispute month in January and you can find the related article here. ![]() If the client or a business partner is located in another EU member country, simplified procedures might help. Simplified procedure to enforce claims in the European Union.If the client’s debt has accumulated over time and has surpassed the limit, the matter should still be discussed with an expert to see if urgent payment order can still be used in some way. To be able to apply for an urgent payment order, the claim, including the ancillary claims, cannot be larger than 6400 euros. If out-of-court solutions aren’t possible, for smaller claims, that are undisputed, a good solution is to use the urgent payment order. Since not all securities can be used in every case, concluding security agreements should be discussed with experts beforehand. Options to consider include different liens, including encumbering the debtor’s immovable with a mortgage, as well as third party securities, such as sureties and warranties. If the debt is caused by a temporary poor cash flow, but the debtor believes that the problem should be resolved soon, it’s worth discussing which securities would protect the creditor and would ensure that the debt is paid in a reasonable time frame. If the debtor violates the agreement, it makes it easier to claim the debt – you can take the agreement directly to the bailiff. If the debtor is willing to settle the debt, but wishes to do so later, consider concluding a payment schedule along with the immediate compulsory enforcement agreement, which must be concluded at the notary. ![]() ![]()
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