Law firms have noticed a sharp rise in threats of legal action as construction firms struggle to recover debts

Figures from debt recovery solicitor Lovetts showed a 72% increase in the number of letters before actions (LBAs) issued in the first quarter of 2009, compared with the same period last year.

Meanwhile, the number of days between the sending of invoices and the issuing of LBAs has dropped – from 117 in the first quarter of 2008, to 102 in the same period this year – showing that firms are quicker to resort to legal threats than last year.

The number of days between the sending of an LBA and the start of legal action also reduced slightly from 28 in the first quarter of 2008 to 27 in 2009.

The number of claims in the period rose 8% on the previous year.

Rupert Choat, a partner in CMS Cameron McKenna, said the figures were in keeping with what his law firm was seeing with its clients. “It’s become an issue of ‘he who shouts the loudest wins’,” he said. “People want their money faster.”

He added: “The sooner a payment issue is raised, the more chance a supplier has of being paid if the firm who owes them should enter into insolvency.”