PROCESS SERVING AND PRE-LEGAL REPORTING
Exploring the alternatives
Chris Thornton-Dees, Divisional Director of Debt Recovery at P&A Receivables Services Plc, part of The P&A Group of Companies Ltd , explains why using a professional services provider to carry out process serving is a good option for most companies – and how carrying out pre-legal income and expenditure assessments can offer opportunities for rehabilitation of customers, saving you a lot of time and money and helping to maintain a positive reputation for your business.
Debt collection can be a real burden on a business if it is not done properly and professionally. While your own teams may be perfectly capable of chasing overdue payments, when it comes to the point where it’s necessary to take legal recourse, they may be less confident or experienced.
It is not just that instigating service of process can seem like a daunting prospect and one that might well elicit an emotional response from the recipient of a court order, it can also be quite complicated and it is vitally important to get the job done properly. Put one foot wrong, and you could be looking at a lengthy and even more difficult recovery process – or a certain bad debt.
Devil in the detail
Preparation is everything when it comes to process serving and the devil, as always, is in the detail. You have to make sure that everything is properly documented and done correctly. Witness statements, for example, must be in the proper tense. The presence of any incorrect information or inconsistency could cause delays or even mean that the action will be dismissed.
It’s important then, to have a certain amount of legal expertise in order to manage process serving effectively. It is equally important to be absolutely thorough in the way that you physically serve a court order. This has to be done in person and it’s vital to make sure that you serve any court document on the right individual, in the right way.
You might think that this ought to be straight-forward enough, but that’s not always the case. It may be necessary, for example, to serve orders on different individuals in different locations at the same time. Imagine a chain of shops or public houses for example, that have reached the point of no return and from which stock may need to be seized and impounded.
This is an aspect of process serving that’s often neglected; once you’ve reached the stage where it’s necessary to resort to a legal process, most companies simply want to get on with the job so that the whole matter is done as dusted as soon as possible.
Alternative course of action
But it is far better for everyone if it never gets to that stage and in many cases now it’s possible to find an alternative course of action. Time spent on due diligence and investigating the circumstances of a person or a business, before you set the legal process in motion, can save you a lot of time, expenditure and wasted endeavour.
It always makes sense to carry out a pre-legal income and expenditure review. This is something we do for every single case we are asked to look at. We will, surprisingly often, find that there is a better alternative to the legal route. It is often possible that payment could be renegotiated and rescheduled. Or there may be assets which can be recovered or set against their debt.
Getting the house in order
Where any of these options are available and court action can be averted, it can work for all concerned. The debtor, instead of feeling aggrieved at being subjected to legal process, will often feel a renewed sense of duty to meet their obligations and make payments as agreed. Also, it is worth remembering that many businesses and individuals that run into trouble do eventually recover. If you have rescheduled a debt rather than served them with a court order, they are more likely to become a good customer for you when they do get their house in order.
Taking the legal route is very serious. It could end up in the individual going bankrupt, or the company being wound-up. These are not, usually, good outcomes for the debtor and the client. In our experience, most creditors would, where it is possible, prefer not to take action if any other option was available.
To do that effectively, you need to know how to make a full and proper assessment of the debtor’s position. So you have to have access to the proper resources and expertise. This is another reason why it makes sense to carry out contract the business of process serving and pre-legal reporting to a specialist provider who can carry out a detailed assessment and take matters further if required.
While carrying out a pre-legal financial assessment, P&A will look at the rehabilitation opportunity with the customer. If the relationship, unfortunately, still moves towards a more litigious route, then you can utilise the information collated, enabling you to make a next stage recovery decision based on what you know about the customer, which will enhance the in the recovery position. We make a point of making sure that all the right information is collected at the assessment stage, so it’s there and ready to be used if we need it later.
Important considerations
Of course, the choice of service provider you make here is going to be important for a number of different reasons. They will carry your reputation out into the market. You will need to be confident, not only that they can do the job effectively, but also that they will do it professionally and with due consideration for your business.
A provider that has a solid and demonstrable track record will always be preferable and more likely to deliver positive results. It will also help if they have experience and real expertise in other areas. At P&A Receivables, for example, we make good use of our insolvency practice to provide detailed pre-legal reporting and advice to our process serving team.
You may also want to consider whether the service provider is able to serve orders all over the UK on your behalf. Many companies in this field will only cover one particular area of the country. If you are looking for national coverage and want to be sure of consistency in approach and that you’ll receive detailed progress reports, you may need to be more discerning and use a firm with broader coverage and capabilities.
Positive outcomes
In our experience, it is important to be able to do all of this for clients. We operate through a robust and established network of professionals located all over the UK. Through a combination of our expertise in insolvency and pre-legal investigation, stringent procedures and back-office capabilities, and the local knowledge and experience of our field agents, we are able to meet all the needs of our customers with regard to pre-legal assessments and reporting and process serving.
At the end of the day though, you simply need to be confident that the approach you are taking is appropriate for your business. If process of service is something you only need to do very occasionally, you may be able to manage it internally or with the help of an independent expert. If you have a more frequent need, you’ll need a provider with more reach, capacity and depth of expertise.
What you must make sure of is that you do get it right first time because that is the only way you can be sure of getting positive outcomes.