Debt Collection in United Kingdom

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Enforcing Contracts

 

There are effective procedures for pursuing debt collection in United Kingdom through out of court solutions and law courts. The World Bank the UK ranks 16th out of 190 countries in Enforcing Contracts, making it one of the top in the world for efficiency in the court system.

 

The Doing Business 2018 also provides an example of what you can expect in terms of recovery rates in commercial claims. The example refers to commercial debt collection in United Kingdom through a local first-instance court.

 

For a standardized claim value of GBP 56.181.00 filed in London, despite the cost stands at 45% of the claim, the quality index of the judicial process is 15/18. Here, Australia is the overall best performer with 15.50. Also, you can expect an average of 437 days for resolving the commercial matter against an average of OECD high income countries of 577.8 days.

 

Out of Court Debt Collection in United Kingdom

 

You can start an out of court debt collection in United Kingdom with your appointed debt collector or attorney. A dunning letter can be sent without the need of providing a Power of Attorney (POA). The demand letter must be compliant to the Court’s Pre Action Conduct and should provide a summary of the claim. Yet, supporting documentation is not necessary, at least at the beginning.

 

Further, you can recover the claim costs if they are mentioned in your sales contract. Otherwise this is not possible. But you can claim late payment compensation according to The Late Payment of Commercial Debts (Interest) Act 1988. For B2B claims the statute of limitations in UK is 6 years and statutory interest rate is 8% above the Bank of England base rate.

 

Legal Action in United Kingdom

 

For court action, you will have to provide a POA to your attorney. There are three main routes the case can proceed through. First is with default judgment where the debtor doesn’t provide defense. In case of defense you can, wherever possible, proceed with a summary judgment. The alternative is to follow the normal process of full judgment. If you are a non-EU creditor, according to EuroCollectNet you may be asked to lodge security for costs with the court. Yet, for a summary judgment you may expect to up to 6 months for obtaining a judgement.

 

To take legal action in United Kingdom the court charges a fee whose amount depends on the claim. For undisputed claims, your lawyer may recover legal fees on top of the recovered debt amount. But even if the claim is disputed, it’s the court that decides and in most cases reimbursement may not fully cover the size of legal fees.

 

Enforcement of EU judgments must be enforceable in your EU country. The same if you have a non-EU judgment although this requires registration with the English courts and not always possible. Then, you should consult a commercial claims lawyer for this as it involves recognition by a judge and it’s a lengthy process taking about 3 months.

 

Why Recoupera

 
If you need assistance for debt collection in United Kingdom, you should appoint a licensed debt collector or a law attorney specialized in commercial claims. If you think of relying on your country’s judgement and a lawyer local to you, think again. For your debt collection in United Kingdom, let Recoupera connect you with a world-class collector or lawyer. Join us and go global.
 
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Some Basic Facts about UK’s Economy and Import Profile

 

The United Kingdom has a population of 66.5m and the World Bank ranks it as the 5th largest world economy with a GDP of $2,900bn (2017). According to IMF, the UK economy in 2018 will grow by 1.6%. Meanwhile, import of goods and services will grow by 1.3% with Germany representing the first exporting country at 13.84% of total imports. Then, China at 9.36%, US at 9.1%, followed by France, Switzerland, Belgium and the Netherlands.

 

With imports worth $636bn the ITC provides the UK top 10 imports as follows:

 

ITC UK Imports in 2016

How To Export To United Kingdom – Some Tips

 

Until the UK remains within the European Union, for EU exporters there are no import duties, unless applicable. However, the EU supplier should register for UK VAT and your UK buyers should provide theirs. Also, it’s important to know the commodity code of the products to ship to the UK for compliance and tax purposes. Check the Trade Tariff for more information.

 

The same provisions apply for non-EU exporters but there are licenses that you must obtain before exporting. The main ones are:

 

  • agricultural products
  • plants and animals
  • foods
  • medicines
  • textiles
  • chemicals and firearms

 

Further, if your company is outside of the EU and you want to export to the UK, you must request an Economic Operator Registration and Identification (EORI) number. With this you can request an Authorised Economic Operator (AEO) status showing compliance to custom and tax rules that speeds up future export procedures. This will benefit you for any export in other EU countries.

 

EORI Number validation

 

As for any other EU country, your product should meet the minimum EU safety specifications. It is your responsibility to sign the EU declaration of conformity where you declare that your products conform to CE marking requirements. Done that, you can affix the CE marking on your product in a visible, legible and indelible position.

 

Labeling, Packaging and Certificates

 

Also, make sure you know about labeling, packaging and other certificates requirements. For example,  some products that require the CE marking are:

 

  • Toy
  • Electrical Equipment
  • Machinery
  • Medical Devices
  • Lifts
  • Personal Protective Equipment

 

Finally, for agricultural and organic products the Food Standard Agency has regulations you must comply with at all stages. Further, check the certificates you need to import organic products because they show your products meet the same standards as in UK.

 

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This article contains general legal information and material for informational purposes only which are not intended and should not be taken as legal advice. Recoupera is not a collection agency and it is not a law firm or a substitute for an attorney or law firm. All informational material provided may not reflect changes in the law. For legal advice, contact a lawyer.