The recovery sequence.

The Late Payment of Commercial Debts (Interest) Act 1998 was written for exactly this moment. When one business owes another for goods or services delivered, the debtor is liable not only for the principal but for statutory compensation, statutory interest, and the creditor's reasonable costs of recovery. Our sequence converts those entitlements into a demand the debtor cannot comfortably ignore.

The mechanism is straightforward. Each letter carries more formal weight than the last. Each explicitly calculates the amount owed under the Act, itemised line by line. Each establishes a deadline. And at each stage, the longer the debtor delays, the larger the total demanded becomes.

Letter I · Instruct

Preliminary notice of intended recovery

Within twenty‑four hours of instruction, we issue a formal notice to the debtor. The letter identifies the creditor, sets out the unpaid invoice with dates and particulars, and applies statutory compensation under Regulation 5 of the Late Payment Regulations 2002. Statutory interest begins to accrue from the original due date at the prescribed rate of eight per cent above the Bank of England base rate.

The letter offers a straightforward resolution. Payment of the principal and the statutory surcharges within a short window closes the matter. The debtor is told, clearly and once, what happens if they do not.

Letter II · Escalate

Second demand, with accrued entitlements

If Letter I produces no settlement, Letter II follows approximately fourteen days later. The arithmetic is restated with the interest accrued in the intervening period. The tone is cooler. The letter references the debtor's directors by name and reminds them, without inflection, that company officers owe fiduciary duties that are engaged when a company withholds payment on an undisputed commercial debt.

Letter II is the point at which most remaining debtors settle. It is also the point at which many propose a payment plan. Plans of up to three months are accommodated without escalation, subject to signed terms.

Letter III · Recover

Final demand before litigation

Letter III is rarely reached. When it is, it sets out the creditor's intention to refer the matter to our solicitors for the issue of proceedings. The letter includes the pre‑action protocol notice required by the Practice Direction on Pre‑Action Conduct and attaches a schedule of the sums claimed under the Act. A seven‑day deadline is set for payment or for a substantive, documented dispute to be advanced.

Matters that proceed beyond Letter III are referred to our panel solicitor for litigation. The creditor is consulted at every point. Most cases that reach the referral stage settle in the days that follow, once the prospect of judgment becomes concrete.

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What undisputed means

The Act and our process are designed for undisputed commercial debts. An undisputed debt is one the debtor has not, on any substantive basis, contested at or before the invoice due date. Late replies and attempts to manufacture a dispute after demand do not, in general, render the debt disputed in the legal sense. We assess these on a case‑by‑case basis at the intake stage.

Where a dispute is real, our sequence halts. We will say so promptly and, with the creditor's consent, return the matter for resolution through other means.

What remittance looks like

Funds received from the debtor are cleared into a designated client account and remitted to the creditor's nominated account, typically within ten working days of cleared funds. The principal is paid to the creditor in full. Our recovery costs are taken from the debtor‑payable portion of the settlement only.