Importance of Instructing Solicitors for Commercial Debt Recovery

If your clients are failing to pay their invoices on time, this can have a significant negative impact on your business, and therefore you’re probably wondering how you can effectively get it back. The two main options available to you are debt collection agents and commercial debt recovery solicitors. 

While debt collection agents can be useful for straightforward and low-risk debt collection cases, instructing commercial debt recovery solicitors offers the benefits of legal expertise, professional representation, strong negotiation skills, and the ability to handle complex legal matters. Let’s look at these in more detail. 

Here are a number of reasons why you should hire solicitors for the recovery of commercial debts:

1. Legal expertise & Improved success rate
2. You will maintain a professional image
3. Access to extensive legal networks and resources
4. Mitigation of risks and legal pitfalls
5. Dispute resolution 

1.Legal Expertise & Improved Success Rate

First and foremost, solicitors specialising in commercial debt recovery have undergone extensive education and training in law and possess an in-depth knowledge of relevant laws and regulations.

They understand the intricacies of debt recovery and can provide expert guidance on the most effective strategies to pursue, ensuring compliance with legal requirements throughout the process. Debt collection agents, however, may not have the same level of legal expertise and are therefore not equipped to handle complex legal issues that may arise during the process of debt recovery.

As solicitors have the skills and experience necessary to effectively navigate the complexities of commercial debt recovery, there is a higher chance of a successful outcome. Solicitors can do things like employ various legal remedies, negotiate, and enforcement measures to maximise the chances of recovering the debt owed to your business.

Debt collection agents may have limited negotiation skills and might resort to aggressive tactics that could potentially harm your business’s reputation or worsen conflicts.

2. You Will Maintain a Professional Image & Save Time

When dealing with debtors, it’s absolutely essential that you maintain a professional image, and hiring solicitors for debt recovery sends a strong message to those who owe you that you are serious about collecting the debt owed to your business. 

As solicitors act as your representatives, your credibility is naturally enhanced which can help to encourage prompt payment or negotiation, potentially increasing the debtor’s willingness to cooperate and settle the debt.

Additionally, debt agents can only request that money is to be repaid, and as a result, these requests are often ignored. Solicitors however can actually begin court proceedings against the debtor. Naturally, a formal notice of active proceedings is far more persuasive than a simple request. 

In terms of time and resource efficiency, debt recovery can be a seriously time-consuming and resource-intensive process, especially if you attempt it solo. By hiring commercial debt recovery solicitors, you can offload the burden of pursuing debtors, allowing them to focus on their core operations. Solicitors handle the necessary paperwork, correspondence, negotiations, and legal proceedings, saving you time and effort to focus on running your business. 

3. Access To Extensive Legal Networks and Resources

Solicitors often have extensive legal networks and resources at their disposal to gather information about debtors’ assets and therefore take the necessary actions to enforce judgments or secure repayment. This may include connections with other solicitors who specialise in different areas of law, such as insolvency, contract law, or commercial litigation. 

In more complex debt recovery cases, solicitors might work closely with forensic accountants and investigators, who specialise in exposing financial information, tracing assets, and identifying potential sources of recovery. This collaboration between solicitors and experts strengthens the debt recovery process and increases the chances of successful recovery.

4. Mitigation of Risks and Legal Pitfalls

Debt recovery involves a number of risks and potential legal pitfalls. Mishandling the process or violating debt collection laws can result in legal consequences or damage to your company’s reputation. Solicitors are well-versed in debt recovery laws and regulations, ensuring that the entire process is conducted within legal boundaries, and therefore minimising the risk of costly mistakes to your business.

Solicitors also conduct risk assessments and due diligence on debtors to evaluate their financial position and the likelihood of successful debt recovery. This assessment helps uncover potential risks and allows solicitors to advise you on the most effective debt recovery strategies while minimising the risk of pursuing non-recoverable debts.

5. Dispute Resolution

In instances where disputes arise during debt recovery, solicitors employ a number of different methods of dispute resolution to resolve conflicts and reach mutually acceptable resolutions during the debt recovery process.

As mentioned previously, solicitors are experienced in negotiation techniques. Negotiation is often the first step in dispute resolution whereby solicitors engage in discussions with debtors or their legal representatives to explore settlement options. 

They present their client’s position, review the debtor’s circumstances, and work towards finding a compromise that satisfies both parties. Through skilled negotiation techniques, solicitors work to secure a successful resolution without the need for formal legal proceedings.

How We Can Help 

At Harding Evans, our debt recovery strategy aims to achieve the best outcome for everyone.

Our specialist debt recovery team includes qualified solicitors, and we are one of the few UK law firms to have our own in-house qualified bailiffs. 

If your business is struggling to recover commercial debts, get in touch with our team today. Learn more about the process of commercial debt recovery here.