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CAN’T WE STILL BE FRIENDS? CUSTOMER RELATIONSHIPS AND DEBT COLLECTION

By Anica Cunanan, Solicitor at Matthews Folbigg in the Insolvency, Restructuring and Debt Recovery Group

An effective debt collection system is critical to businesses who provide goods or services “on credit”. But how to go about debt collection whilst still trying to maintain good customer relationships?

In our experience, nothing poisons a business relationship like bad debt collection. At the risk of sounding heretical, sometimes the customer is not right, when they simply refuse to pay for no reason. The value of such customer relationship might be doubted, and the method debt collection may not matter. But in other cases, the customer just needs a gentle (or possibly less gentle!) debt collection technique. In all cases, the question is this: How does a business continue to manage a customer relationship whilst ensuring that their account is paid on time? [...]  READ MORE →

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OFFER UP!

By Anica Cunanan, Solicitor at Matthews Folbigg in the Insolvency, Restructuring and Debt Recovery Group

Calderbank offers are based on the principles outlined in the English case of Calderbank v Calderbank [1975] 3 All ER 333. Whether you are the offeror or the offeree, it is important to understand the effect of these offers.

Calderbank Offer: What is it?

A Calderbank offer is designed to put the offeror in a position to apply to the court for an indemnity costs order, in circumstances when the offeror receives a better outcome than the amount that was offered. Should an indemnity costs order be granted, the unsuccessful party will pay a higher proportion of the successful party’s costs. Emphasis is placed on the word “higher”. In many civil jurisdictions (but by no means all), “costs follow the event,” and so the unsuccessful party might expect to have to pay some of the successful party’s costs. If ‘indemnity’ costs are awarded, the amount payable is higher. Somewhat  counterintuitively however, the amount is almost never “all” the successful party’s costs, for various reasons. However, in many cases the difference between recovering some costs, and recovering a much higher proportion of those costs, can make an enormous difference. And by making a Calderbank offer, a party will improve the chances of recovering a higher proportion of costs. [...]  READ MORE →