CALL US FOR A FREE CONSULTATION: 0207 459 4037

Unpaid Invoices Legal Action in the UK: How to Recover Your Money Fast

Unpaid invoices can create significant obstacles for businesses, affecting cash flow, operations, and growth. Our expert debt recovery lawyers have prepared this comprehensive guide to help you understand the legal avenues available in England and Wales to recover unpaid invoices effectively. This guide provides a detailed step-by-step approach on how to take legal action to recover unpaid invoices in the UK, practical examples, relevant case law, and actionable advice to help you navigate the process successfully.

Need personalised advice? Call us at 0207 459 4037 or book a Free Consultation through our online booking form below.

When invoices remain unpaid, your business’s cash flow can suffer, making it difficult to pay your suppliers, employees, or invest in new projects. Unpaid invoices often create a domino effect; your inability to meet financial obligations can strain your relationships with partners and clients. Taking timely legal action ensures that clients understand your payment terms are serious, setting a precedent to deter future delays.

Case Example: Risks of Ignoring Unpaid Invoices

Imagine you’re a construction contractor in Manchester with a £15,000 outstanding invoice. The client continually promises payment, but months pass with no resolution. If you don’t pursue legal action, you may be forced to write off the debt, limiting your cash flow and potentially preventing you from taking on new projects. By taking decisive legal action, you not only recover the overdue payment but also send a message that unpaid invoices will not be tolerated.

Struggling with unpaid invoices? Speak to our expert lawyers at 0207 459 4037 or book a Free Consultation.

Before resorting to legal measures, it’s essential to exhaust all informal recovery methods:

  1. Send a Polite Reminder – Invoices can go unpaid due to administrative errors, disorganised accounting, or sheer oversight. A friendly yet firm reminder often resolves the issue. Include a clear reference to the invoice number, amount due, and payment deadline.
  2. Issue a Final Demand – If reminders fail, escalate to a final demand letter. Clearly state that if payment isn’t received within 7-14 days, legal action will follow. This step demonstrates that you’re serious about recovering the debt.
  3. Consider Mediation – Mediation, a form of Alternative Dispute Resolution (ADR), involves a neutral third party to facilitate a discussion between you and the debtor. This step can often resolve disputes without the time and costs associated with court proceedings. Mediation can preserve business relationships by promoting open communication and compromise.

For further guidance, read our article on When Is It Reasonable to Refuse Mediation in the UK?

If informal efforts fail, you may need to escalate the situation to legal action. Here’s how the process works in England and Wales:

1. Send a Letter Before Action (LBA)

A Letter Before Action (LBA) is the first formal step, outlining the debt, the due amount, and giving the debtor a final chance to pay before court action. Under the Pre-Action Protocol for Debt Claims, the LBA must include:

a. Details of the debt (e.g., amount, due date, invoice number)

b. A clear deadline for payment (typically 14 days)

c. Information on how the debtor can pay

d. An option for the debtor to reply with any disputes

Failing to comply with this protocol can lead to court delays or penalties.

2. Pursuing Unpaid Invoices in Court

Your next steps depend on the amount of the unpaid invoice:

a. Small Claims Court (Debts up to £10,000): This is a cost-effective method for pursuing smaller debts. The process is straightforward and can be initiated online or at your local county court. While the Small Claims Court is designed for self-representation, having access to the right tools and guidance significantly increases your success rate.

Our new platform, Go-Legal.Ai, provides DIY solutions tailored for small claims, from drafting letters to managing court submissions. Sign up for a Free Trial on our website to streamline your debt recovery process with expert-backed support.

For more on potential risks, read What Happens if You Lose in Small Claims Court in the UK?

b. County Court (Debts Over £10,000): For larger debts, the County Court is the appropriate venue. The process involves submitting a detailed claim and may require a court hearing where both parties present their evidence. Legal representation is advisable to ensure that your case is well-prepared and increases the likelihood of a favourable outcome. A successful claim results in a County Court Judgment (CCJ).

c. High Court Enforcement (Debts Over £5,000): If the debt remains unpaid even after obtaining a CCJ, you can escalate enforcement to the High Court. This involves instructing High Court Enforcement Officers (HCEOs), who have broader powers to seize assets for debt recovery.

Read our articles on Statutory Demand: What Are the Costs Involved? and Application to Set Aside Statutory Demand for further details on these processes.

Enforcement: How to Collect on a Judgment in the UK

Even if the court rules in your favour, you might still face challenges in recovering the money. Here are several enforcement options:

  1. Attachment of Earnings – This allows recovery of the debt directly from the debtor’s wages. The court sends an order to the debtor’s employer to deduct a specified amount from their salary until the debt is cleared.
  2. Charging Order – Secures the debt against the debtor’s property, such as their home. If the debtor continues to avoid payment, you can apply for an order to force the sale of the property to recover the owed amount.
  3. Writ of Control – For debts over £600, High Court Enforcement Officers can seize and sell the debtor’s assets to satisfy the debt. This method is particularly effective for recovering larger sums.
  4. Third-Party Debt Order – This order allows you to recover money directly from the debtor’s bank account or a third party that owes the debtor money. It can be a quick way to recover funds if the debtor has sufficient assets.
  5. Statutory Demand and Winding-Up Petition – If the debtor is a company, issuing a statutory demand can be the first step towards a winding-up petition. This can force the debtor into insolvency if they fail to pay, pressuring them to settle the debt. To understand the costs involved, see our article on Winding Up Petition Costs in the UK.

Insolvency Tracker & Claims Protection

Our revolutionary tracker protects your business from distressed clients. No more surprises. Our free service (worth £1k per annum) alerts you to any financial issues or legal claims against debtors, helping you take immediate recovery action and limit financial exposure.

  • Insolvency Tracking: Immediate notifications and advice on UK insolvency events related to your debtors, including winding-up petitions, liquidation, bankruptcy, or administration.
  • Claims Monitoring: We monitor legal claims filed against debtors, including court claims, arbitration proceedings, and other legal disputes.
  • Client Protection: For any adverse claims involving your business, our tracker software provides immediate alerts – often before the claim is formally served or publicly advertised.
  • Customisable: Customise our watchlist for specific companies or individuals to suit your business needs.
  • Financial Health Reports: Receive regular reports on the financial health of your debtors.
  • Director Checks: Conduct background checks on debtor directors, including related companies, past disputes, and any red flags.

Sign up for our innovative and ground-breaking Insolvency Tracker & Claims Protection service here.

Interest on Unpaid Invoices

Under the Late Payment of Commercial Debts (Interest) Act 1998, you can claim statutory interest on overdue invoices. This serves as compensation for the financial loss caused by the delay and acts as a deterrent against late payments.

Use our Interest Calculator to assist you in accurately calculating the interest owed.

Limitation Periods and Relevant Legislation

Under the Limitation Act 1980, you have 6 years from the date the invoice becomes due to pursue legal action. If you miss this timeframe, you lose the right to recover the debt through the courts. Understanding when the limitation period starts is crucial; generally, it begins from the date when the payment was due under the contract.

See our guide on How to Start a Debt Claim for a detailed breakdown of initiating legal action within the limitation period.

CaseKey TakeawayDetails
Nassau County Supplies Ltd v British Gas Corporation [1986]Courts enforce strict adherence to contract terms.Nassau County Supplies sued British Gas for delayed payment. The court upheld the agreed terms, reinforcing the need to honour payment timelines.
Baird Textile Holdings Ltd v Marks & Spencer Plc [2001]Oral agreements can bind parties in an ongoing business.The court acknowledged established business practices as forming a binding agreement, despite no formal contract.
Phillips & Co. v. Brewin Dolphin Bell Lawrie Ltd [2001]Clear communication and contract terms secure payment.The court held that documented terms and repeated confirmations bind the debtor to the agreement.
Halsall v. Brizell [1957]Accepting benefits implies acceptance of obligations.The court ruled that clients receiving services must pay, reinforcing suppliers’ rights in disputes.
Molena Alpha Inc v. Republic of Argentina [1999]Interest can be claimed for overdue invoices.The court recognised the financial impact of delays, allowing businesses to claim interest under the Late Payment Act.

Successful Case Study: £4.8m Recovered for Sub-Contractor

Our expert insolvency lawyers recently helped a subcontractor recover a £4.8 million sum within just 4 weeks after the client fabricated a dispute over invoices. Through quick legal action and strategic negotiation, we secured 100% of the payment, including legal costs, demonstrating our proven track record in complex debt recovery cases.

Facing similar challenges? Call us at 0207 459 4037 to discuss how we can assist you.

Before initiating legal proceedings, consider:

  1. Debtor’s Financial Status: Perform a credit check to determine the likelihood of recovery.
  2. Cost-Benefit Analysis: Weigh the potential recovery against the costs and time involved in legal action.

For tips on reducing future risks, see our guide on the Best Practices to Minimise Bad Debts.

Best Practices: How to Prevent Unpaid Invoices

  1. Set Clear Payment Terms: Specify deadlines, payment methods, and penalties for late payments in your contracts.
  2. Request Deposits: For larger projects, ask for an upfront deposit to minimise risk.
  3. Conduct Credit Checks: Assess new clients’ creditworthiness before extending payment terms.

Our Winning Approach to Debt Recovery

Our team offers comprehensive services, including:

  • Free Initial Consultation: Tailored advice for your situation.
  • Customised Strategy: Bespoke plans to maximise recovery.
  • Flexible Funding: Fixed fees and “no win, no fee” arrangements.
  • Secure Communication: Use our Go Transfer portal for confidential document sharing.

Need tailored advice? Call us at 0207 459 4037 or book a Free Consultation.

Q: Can I combine multiple unpaid invoices in one claim?

Yes, you can combine several invoices in a single legal claim if they are owed by the same debtor.

Q: How long does it take to recover an unpaid invoice through legal action?

The process varies. A Letter Before Action usually gives the debtor 14 days to respond. Court proceedings can take several months depending on the complexity and value of the claim.

Q: Can I claim interest on overdue invoices?

Yes, you can claim statutory interest under the Late Payment of Commercial Debts (Interest) Act 1998 at 8% plus the Bank of England base rate.

Q: What if the debtor is insolvent?

If the debtor is insolvent, your options include filing for bankruptcy or issuing a winding-up petition. However, the chances of full recovery are limited, so consult our experts for the best approach.

Q: Do I need a solicitor to go to the Small Claims Court?

No, the Small Claims Court is designed for self-representation. However, using a DIY legal solution like our Go-Legal.Ai platform can increase your chances of success. Sign up for a Free Trial today for guidance and resources.

Q: When does the limitation period for unpaid invoices start?

Generally, the limitation period starts from the due date specified on the invoice. However, actions taken (e.g., acknowledging the debt) can reset the limitation clock.

Act Now to Recover Your Unpaid Invoices in the UK

Dealing with unpaid invoices can be daunting, but our expert team is here to guide you through every step. Contact our commercial litigation lawyers at 0207 459 4037 or use our online booking form below for a Free Consultation tailored to your situation.

Taking prompt and structured legal action for unpaid invoices protects your business’s financial health. By following this guide, you can effectively recover debts and maintain smoother cash flow.

Call us at 0207 459 4037 or book a Free Consultation online to discuss your specific situation and explore the best options for debt recovery.

Reviews

Karim Oualnan handled a contractual case to a successful resolution. Karim was very diligent, always providing great, honest advice in which Karim always put my best interests at the forefront of his suggestions during the case. He is very reliable, trustworthy and always on hand to help. I would highly recommend Karim.
I have no hesitation in recommending the services of Karim and his team. I had been banging my head against a brick wall after my bank forced the closure of my accounts and froze a substantial amount of my cash assets. Karim quickly reviewed all of the documentation relating to the matter and issued a letter before claim and formal...
We hired Karim for a commercial dispute, with a UK based entity that breached our P.O. terms. The difficulty with the case was that we have paid a down payment without much leverage to recover it. The supplier misled us forever 2 years and finally decided not to pay our down payment. However, with the support of the lead lawyer...
Very satisfied with the way that Karim Oualnan and his team took hold of a messy conveyancing professional negligence claim, and progressed it all the way through to an amicable settlement in just over 6 months. Professional, courteous, knowledgeable and also pragmatic with advice and strategy. I would not hesitate to recommend.
Karim offered me some advice regarding a lease issue. He was kind , courteous, knowledgable and above all really generous with his time and support . I would recommend Karim in a heartbeat for explaining things so clearly without patronising and for making me feel so at ease.
Karim is wonderful to work with, attentive, calmed and a knowledgeable professional. I appreciate his help a lot, he guided me in a way that not a lot of people does. Reliable and a great motivator.

Choose Excellence in Dispute Resolution

Our Mission

Our litigation solicitors have a proven track record of delivering successful outcomes for clients. Go Legal was founded to make exceptional lawyers accessible and solutions affordable.

Our lawyers and mediators have decades of experience and specialise exclusively in commercial litigation. Our lawyers have been described as “the best litigators in the country” & provide solutions to clients in the following areas of law:

karim sign

Karim Oualnan

Partner and Managing Director

Litigation Lawyer of the Year - Karim Oualnan

Our Story

Having worked more than a decade in law and fuelled by his passion for access to justice, Karim envisaged a different law firm – one that stood as a symbol of hope, fairness, and an unwavering dedication to justice. By providing legal services through a partnership with Go Legal and Spencer West, Karim has been able to create this vision.

Karim did not have a storybook beginning. His childhood echoed with challenges, where he witnessed his family and friends struggle with legal issues. It made him realise that there are individuals and businesses caught up in the complexities of the UK legal system who need reliable, affordable and technically astute lawyers to get results.

Our lawyers make a promise – we will work hard to achieve the best outcome for you. We are here to help!

Our Values

Our firm’s values ensure that we consistently exceed client expectations. We are:

  • Honest: Our lawyers are trusted by many clients
  • Generous: We are technically astute lawyers with compassion, & a genuine desire to help
  • Dedication: Our lawyers tackle each case with relentless dedication & work tirelessly to achieve a successful outcome
  • Innovative: We have access to technology & strategies not used by other law firms
  • Guardians: Our lawyers will guide you through every legal step, ensuring clarity & understanding at all stages

200+

Lawyers*

95%+

Success

20

Offices*

*through our exclusive partnership with Spencer West LLP

Our lawyers are regulated and members of:

Why instruct Go Legal

why-icon-6-6

Expertise

Our team of award-winning legal experts are renowned for their technical expertise, honesty and dependability. We prioritise customer satisfaction by providing personalised attention and ensuring that we consistently exceed our clients' expectations throughout.

why icon 2

Rapid Response​

We understand the urgency of legal matters and offer 24/7 support to clients. Whether you require immediate assistance with legal advice or representation, our team is always available to provide prompt and reliable support. We will create a Whatsapp group with you and your legal team once instructed if you have any out of hours questions throughout your litigation and dispute resolution case.

why icon 3

Fair and Transparent pricing

We provide honest estimates for our legal services at the very outset. We are often instructed on an hourly rate basis, but we can offer discounted fixed fee packages, and no-win no fee agreements. For further information, please see our Funding page which sets out some of the packages we may be able to offer clients.

fast litigation and dispute resolution lawyers

Fast & Reliable

Efficiency and dedication to our clients’ needs are the cornerstones of our practice. We have earned the appreciation and praise of clients and even our opponents by consistently meeting high standards and delivering exceptional results.

why icon 5

Qualified and Regulated

Our team consists of highly qualified and regulated legal professionals who possess extensive knowledge and experience in dispute resolution. You can trust that your legal matter will be handled by specialist and experienced lawyers who provide the highest level of service to achieve the best result for your case.

why icon 1

Customer Satisfaction Guarantee

We are so confident in our ability that we give our clients a service level guarantee. If you are not happy with the service we provide on your case, you can request a 10% discount on our invoice(s) no questions asked.

1. Book Free Consultation

2. Our Lawyers will call you

3. We will represent your best interests to success

Schedule a Free Consultation

Select Date & Time below
Maximum file size: 10 MB
error: Content is protected !!
Search

👋 Solve your legal issue today!

Excellent

Resolving Payment Disputes: A Legal Guide for the UK Construction Sector

We are here to help you. Call us for your Free Consultation: 0207 459 4037

The Ultimate Guide to Construction Project Management: Legal Tips & Best Practices

We are here to help you. Call us for your Free Consultation: 0207 459 4037

The Complete Guide to Litigation Funding in England & Wales

We are here to help you. Call us for your Free Consultation: 0207 459 4037

The Essential Guide to Intellectual Property Protection in the UK

We are here to help you. Call us for your Free Consultation: 0207 459 4037

Understanding Defamation: A Comprehensive Guide

We are here to help you. Call us for your Free Consultation: 0207 459 4037

A Comprehensive Guide to Preventing and Resolving Partnership Disputes

We are here to help you. Call us for your Free Consultation: 0207 459 4037

Navigating Partnership Disputes: A Step-by-Step Guide

We are here to help you. Call us for your Free Consultation: 0207 459 4037

Understanding Your Rights: A Guide to Financial Services Disputes in the UK

We are here to help you. Call us for your Free Consultation: 0207 459 4037

The Essential Guide to Resolving Financial Services Disputes in the UK

We are here to help you. Call us for your Free Consultation: 0207 459 4037

Understanding Professional Negligence: An Introductory Guide

We are here to help you. Call us for your Free Consultation: 0207 459 4037

Guide to starting a Professional Negligence Claim

We are here to help you. Call us for your free consultation: 0207 459 4037

Appealing HMRC Decisions: Your Rights and Procedures

We are here to help you. Call us for your Free Consultation: 0207 459 4037

A Guide to Alternative Dispute Resolution (ADR) in HMRC Disputes

We are here to help you. Call us for your Free Consultation: 0207 459 4037

Best Practices to Minimise Bad Debts

We are here to help you. Call us for your Free Consultation: 0207 459 4037

How to start a Debt Claim

We are here to help you. Call us for your Free Consultation: 0207 459 4037

A Guide to Creditors' Rights in Insolvency Proceedings

We are here to help you. Call us for your Free Consultation: 0207 459 4037

Crypto Recovery Group: Overview of Cryptocurrency Recovery& Fraud

We are here to help you. Call us for your Free Consultation: 0207 459 4037

Cryptocurrency Tax Disputes: Navigating the Grey Areas

We are here to help you. Call us for your Free Consultation: 0207 459 4037

Avoiding Insolvency: Early Warning Signs and Remedial Actions

We are here to help you. Call us for your Free Consultation: 0207 459 4037

Navigating Corporate Insolvency: A Step-by-Step Guide

We are here to help you. Call us for your Free Consultation: 0207 459 4037

Preventing Shareholder Disputes: A Proactive Approach

We are here to help you. Call us for your Free Consultation: 0207 459 4037

The Legal Implications of Deadlock in 50/50 Owned Companies

We are here to help you. Call us for your Free Consultation: 0207 459 4037