There are less catastrophic, but just as effective, methods of securing payment than resorting to a winding-up petition (13 August, page 34; Letters, 17 September, page 32).
The Civil Procedure Rules 1998 allow claimants to settle their claims without the cost of a trial – but first, you need to serve your claim form and “particulars of claim”, then wait. If the other side fails to file a defence in reply, you can apply immediately to the court for default judgment and, if granted, seek to enforce the claim against the debtor’s assets.
It is perhaps more likely that the defendant will file a defence (but remember, “we haven’t got the cash at the moment” doesn’t count). In this case, immediately file an application with the court on the basis that the defendant has no prospect of successfully defending the claim, and that there is no compelling reason why the issue should be dealt with at trial. If successful, the summary judgment can then be enforced immediately (according to the terms of the judge’s order).
Clearly, time is of the essence with these claims. If it looks like the employer is on its way out, and it refuses to settle your bills any other way, then proceedings should be started as soon as possible, with a view to enforcing the judgment before insolvency looms. It’s just possible that other clients are following the same route, and you want to avoid being locked out.
Yes, these mechanisms involve a degree of delay. Yes, they are granted at the discretion of the court. Yes, there are costs and court fees involved in pursuing these options. But, with luck and a following wind, you might be able to recover the bulk of your dues – unlike the pennies in the pound you will receive if you really do have to wind up a debtor.
David Perry, by email