Four years ago I turned one of my hobbies into a small business. A student offered to do my accounts for me in return for private lessons (she owns her own accountancy).
Three years later I receive an invoice from her company, I explain the situation and hear no more. A year later I receive another invoice. I have continually attempted to contact this student but she avoids all contact, doesn't turn up for meetings arranged via her secretary etc.
Bizarre behaviour but you live and learn.
Neither of us have much proof either way as the contract was verbal, apart from a few emails which allude to the situation, and obviously undertaking 3 years of work before the first invoice came. I've never accepted or even seen any charges before this time.
Long story short, I have sent her a breach of contract letter, - I suspect, given her avoidance of me she will continue to fight this. She may instruct a debt collection agency before it goes to small claims court.
So my question is, before it may go to court, are these DCA easy to deal with, - they're not people I have any experience of, although I am told they can be 'terriers'.
My main concern is a DCA turning up at my business - can they do that? Trying to embarrass me in front of neighbours, constant calls and visits won't be enjoyable. And how long can that go on for until it goes to court?
Any advice/experience shared appreciated!
Given the size and scale of the individual concerned and from my experience, before a debt agency would get involved it would usually go to court first. Once the outcome has been determined by the courts, then the DCA can be appointed to chase the debt.
Out of interest, why did she issue an invoice if you were exchanging services for private lessons?
I would not worry about it too much at this stage.
If she was serious about recovering the debt then she should use the correct channels, ie small claims court (Money claim online), CCJ, followed by bailiffs if she was successful.
If she appoints a DCA, I understand they have very limited authority to do anything without the above process being followed, so rely on you caving in just to get the problem to go away. When I have used court bailiffs in the past, I was surprised what limited powers even they have, so a DCA will (surely) have even less.
If you have done nothing wrong, stand your ground and fight your corner.
Assuming England or Wales...
If a judgment has been obtained in court in favour of the plaintiff then a debt collection agency is irrelevant. At that stage, what are commonly called bailiffs will be available for the successful plaintiff to try and collect the debt.Originally Posted by Captaincook
Bailiffs generally work in connection County Court judgments. If the judgment was in the High Court then High Court Enforcement Officers can be used.
A debt collection agency is a tool used to obtain payment before or instead of going to court.
Indeed. Debt collectors have no special legal authority at all.
Not a lawyer but I thought that a court judgement is required to “prove” the debt exists in law before a (legal) debt collector can get involved. What evidence has she to present to a judge?
If the individual is a member of a professional body, I would make a complaint to them about the situation. Guessing that an engagement letter was never issued to you and agreed.
Last edited by David_D; 11th May 2022 at 11:56.
I'm intrigued as to the breach of contract letter given there is no contract? Lesson learned though on agreeing any future (or other current) arrangements in black and white. P.S. I assume she's no longer doing your accounts and that you're no longer giving her free lessons.
Very!
Debt collectors have no special legal powers. They are just like you and me.
They cannot legally do anything that would constitute harassment. That could be a crime.
If she does appoint debt collectors, then simply explain to them that you do not owe any debt to her, that any further contact from them will be viewed as harassment, and that they should advise their client accordingly. Any competent debt collectors will stay away from you at that stage (although might still send the odd letter or make a phone call).
As Maysie said, your former student/accountant's route to remedy is through the courts if she is serious. But her behaviour so far suggests that she is not serious. If she does go to court then you'll have an opportunity to enter a defence. Bear in mind that you can counter-sue as well if there are any circumstances under which she might actually owe you money or has cost you money.
Ideally you should have invoiced each other for the work at the time, showing equal values. That would have set the whole thing in stone. But even without the invoices, the court will take whatever evidence there is into account (e.g. emails that mention the situation).
Last edited by markrlondon; 11th May 2022 at 12:06.
Debt collectors are just people who collect debts. Anyone can employ one at any time. They have no more or less legal authority than anyone else.
It is bailiffs and High Court Enforcement Officers who operate under the authority of a court in response to a court judgment, court order, or writ.
Debt collectors are not the same as bailiffs and HCEOs.
From what PJdB has said, this has not gone to court and he is only concerned about the possibility of debt collectors becoming involved.
Last edited by markrlondon; 11th May 2022 at 12:09.
If an accountant, who is a member of a professional accountancy body, sent debt collectors round without even engaging with me, I’d definitely be complaining to that body.
Does a reputable debt collector turn up and make demands with no evidence just because they’ve been paid to?
And remember barter transactions are taxable so you will have brought into account the value of the lessons when completing your tax returns!
Most DCA's (at least all the ones we have used to recover commercial debts) work on a percentage recovered basis (unless a liquidation etc.)
For a DCA to take the work it will have to decide that there is sufficient proof of the debt that they can pursue it, and there is a reasonable chance of collection.
I can't see a DCA taking on the work without a contract, invoices & other correspondence that makes it a solid case and worth their time pursuing.
It's still only hypothetical but I wouldn't bother. They'd most likely take the view that she is entitled to pursue an (alleged) debt.
In this hypothetical scenario I'd only bother to complain to them if she ended up harassing me (which seems to be the opposite of her problem) but, even then, I'd only speak to her professional body after I'd spoken to the police.
Probably shouldn't but could/might do.
Ideally a debt collector should see some documentary evidence of the debt they are supposed to pursue but you can't guarantee that they will be so competent/ethical. In truth, from what I have seen most debt collectors won't actually do anything other than write official-looking letters nowadays.
As MB2 said, most work on commission basis anyway so will want to see reasonable evidence.
The fact is that it really doesn't matter at this stage. Seriously, there's nothing to worry about at this stage from what the OP said so far.
If she is actually serious then she needs to be following the correct pre-action protocol to then be followed by a court summons. Debt collectors would be a distraction from all that.
** edit **
Apologies. I originally wrote this message as if you were the OP. I've now corrected it.
Last edited by markrlondon; 11th May 2022 at 12:51. Reason: Fixed error
As others have said, I don't know of any debt collectors which would even take this case with such little info/proof/etc. They would think it was a waste of time.
Ensure you look out for post or email relating to claims or judgement information etc, as you may have to reply or out in a defense if they procced this route, and if these go ignored sometimes the court issues a default judgment as you have not responded properly.
As an aside, it also occurs to me that a competent accountant should have advised her client of the need for a written contract and for contemporaneous mutual invoicing for barter-style work.
That's reassurring to read, - many thanks all, particularly markrlondon.
I am considering making her a good will gesture offer to put the matter to bed, and if she refuses, tell her that's my last offer (with the view that I would be happy to go to court), - I understand that a small claims court will offer the opportuntity of free mediation first, which I will happily accept.
Some people I will never understand.
Verbal agreement to exchange accountancy work for private lessons; given that she is now chasing the monetary value, she is in breach of contract. Yes, lesson definitely learn't!
Hmmm - maybe a that will occur to a judge also.
Glad to be of help.
As long as you are certain that your respective work for each other was equal in value and that neither of you owe the other anything, then I wouldn't make any offers at all. You don't need to show any good will if you owe her nothing.
As far as I can see, the most you need to do is write a letter to her denying that you owe her any money and confirming the terms under which you and she agreed to do work for each other of equal value on a mutual basis.
If she disagrees and thinks that one of you owes money to the other then let her make her case (literally if necessary).
May I suggest that if you send such a letter that you keep a copy and send it via RM Signed For. And that all further communications with her (at least from your side) be sent by RM Signed For (and keep copies of course).
One should never second guess judges but I nevertheless suspect that it would hardly help her (so far hypothetical) case be taken seriously.
Last edited by markrlondon; 11th May 2022 at 13:24.
Without meaning the pry, what ballpark amount are we talking about there? Had you ever even discussed pricing with this accountant before the trade agreement was reached, or have they just plucked a figure out of the air?
Pretty sure a verbal agreement and subsequent exchange of consideration does constitute a contract, regardless of if it's written down. Evidencing it is of course more difficult.
If you're sure the agreement up front was clear (and the 3 year delay suggests it was), I wouldn't offer them a penny personally. For one I'm a stubborn git, but perhaps more importantly I'd worry that this could be seen as acknowledgement of some form of debt if it were to end up in court.
Most debt collectors work on comission basis so they take on almost anything and send their usual letters requesting payment, offering payment plans etc. If they collect they get paid. After this fails they then have to decide whether or not to take to court. If it's a small amount they will usually write it off and send back to client. Howver, the client can then send it off to another debt collector on same no win/ no fee basis. This is why if you do nort resond to debt collectors it goes quiet then, months later, it reappears from a different collector.
Whether or not it goes to court will depend on amount and evidence but most debt collectors can't be bothered.
This comes from my 18 years of experience in that industry which has changed somewhat ut, debt collection is a numbers game. Send thousands of letters out and you will be quite successful.
This would concern me too.
If one is sure that one does not owe anything, there is no need to offer anything.
100% agree with this.
Don't second guess what she is after and leave her to state her claim formally. If you start making offers, that may suggest that the agreement at the start was not clear and is probably more likely to implicate you than release you from further action.
It is her race, so let her run it. Only join in when you need to respond.
Thanks again.
We're talking about £700.
Despite me continually offering and reminding her of these private lessons every time I saw her (and she used to attend my club every week before Covid), informing her of my availability & flexibility, and, a reminding her a few times in writing (luckily), she only took me up on a couple of lessons (she was always busy, 'i'll get back to you etc'). This is why I am considering making her a goodwill gesture of maybe £200 just to make her go away. So the work we've done for each other does not balance, but that is not my fault.
I'll consider your point that it might implicate...
I agree that you shouldn't offer her anything. If she had wanted to discuss, and explore some settlement, that would have been different, but way past that stage now.
Can you not invoice her for the lessons in return?
>she only took me up on a couple of lessons<
If it goes to mediation, could be called out that a qualified accountant did your accounts for 3(?) years which you matched with 'a couple' of lessons. You don't mention you're qualifications/reputation to coach the sport, but some could say that's not a fair exchange of value; depending on your charges for private tuition of course.
Just as a point of clarification, how much work has this account done for you and what are they trying to invoice for - all work ever done or a specific segment of the work? Originally I read the OP as the accountant had done some work 3-4 years ago in exchange for lessons at the time, and was now belatedly invoicing you. But on re-reading the statement "undertaking 3 years of work before the first invoice came" may suggest they've been doing your accountants for 3-4 years? If so, when was the last lesson given?
Ah, I think this does change things somewhat.
If the work you actually did for each other does not balance in agreed value then it follows that one of you must still owe the other something.
It doesn't really matter that she didn't take up all the opportunities for you to do work for her. Unless there is a detailed agreement to the contrary in place, it is work done and its value that counts, not what could have been done.
It's nuts that she waited years to invoice you (if I understand the timeline correctly), and it is problematic that you didn't invoice her (again, if I understand you correctly), but nevertheless it does now seem that one of you owes the other something. It seems from what you say that you owe her some money: The difference between what she actually did for you and what you actually did for her.
This does seem like part of a sensible way forward (if PJdB has not previously issues any invoice for the work done).
I say "part of a sensible way forward" since the obvious thing to do would then be to remit payment of the difference between her invoice and your invoice (would that be about £200?) to her. That way you will both have caught up with where you should be in terms of both invoicing and net payment.
When invoicing and paying, I suggest writing a covering letter (send by RMSF) confirming that the payment is for complete and final payment of the net difference between your work for her and her work for you as detailed in your respective invoices.
This mutual invoicing is what should have happened in the first place and, as I mentioned, it shocks me that an accountant would not have advised you of this. But what's done is done at this stage.
Good questions.
Last edited by markrlondon; 12th May 2022 at 14:54.
Yes, I believe I could do the same thing that she is doing to me, however, that was not our agreement.
I take that point, however it wasn't for the want of me trying - I cannot force someone to do a lesson. If she's changed her mind it's bizarre behaviour to continually avoid me & instruct her staff randomly invoice me. Saying that, I would accept whatever a professional mediation decided and move on with my life
All work done over the period. The last lesson was March 2020.
Thanks for that last post markrlondon.
Had I known that she would be charging me £700 I would never have taken her up on her offer, - I would have simply done the tax returns myself. As I say, no charges were every conveyed to me, and at these prices I would have never gone ahead, as my sideline business does not make a lot of money. I am employed, so the bulk of my taxes are paid at source.
In the T&C's attached to the invoice, it states that they can start charging escalating interest also.
To be clear, sending you an invoice is entirely consistent with what I understand your original verbal agreement to be: That is to provide work to each other of equal value.
As mentioned, you both should have invoiced each other for the work at the time it was done. No money needed to change hands if the work was of equal value as the invoices would cancel each other out but the work should definitely have been invoiced in both directions. There'd also be no net tax liability since you'd cancel each other out in that respect. But it should all still have been accounted for.
The weird things with this lady are that she didn't point this out to you at the time and, if I understand correctly, didn't invoice for her work done for you until years later.
Oh yes, from what you say very bizarre.
Ah, more complicated again. I guess/presume that your verbal agreement was something qualitative along the lines of "I'll give you X number of lessons and you'll do my tax returns for Y years." Would that be correct?
If so, that's absolutely fine but what should have happened is that (apart from writing it all down so that you both had a copy and knew where you stood), you should both have agreed a nominal value for these bits of work that was equal and then invoiced each other for it. As I say, no money would need to change hands and there'd be no net tax liability but it would make it all set in stone.
So, regardless of what should have happened in the past, here is where you seem to be now if I understand correctly:
(1) You verbally agreed to do work for each other of equal value but she didn't take you up fully on what you offered to do for her.
(2) She did take you up on some of the lessons you offered to give her.
(3) She has belatedly invoiced you for the work she did for you.
(4) You have not invoiced her.
As I mentioned before, it seems reasonable to me (based upon my understanding of what you have said so far) to now invoice her for the work that she did let you do for her. If she can invoice you late then why not you too. And then, as I mentioned before, to pay her the difference between what she calculates you owe her and what you calculate she owes you, with a RMSF letter explaining all this. Send payment by cheque with your invoice and covering letter if you can, such that she cannot accept payment without also receiving the letter and invoice.
You can write anything you want in your Ts&Cs but it doesn't mean you can get away with it if tested in court. ;-)
Whilst the courts do allow an interest rate to be charged on overdue debts, the debt itself has to be shown to be real and not just made up. Whilst late invoicing (within 6 years) won't in itself negate the debt, it wouldn't help her case should she take you to court. And of course, any debt she owes to you (and if you gave her lessons then she does owe you money) would be taken into account by the court.
Thank you again Mark, you are a superstar. That is extremely helpful, - hugely appreciate your time here.
To answer your question
The conversation, which was very informal, as we were friends:
Me: "How much will this cost me?".
Her: "Oh, your tax returns are so small & quick, you can just give me a few private lessons".
So we didn't even mention about doing anything of equal value!
If it went to court, and therefore hopefully mediation, could I not just state that I am still more than happy to offer private lessons to the value of the work she has done for me, as that is what our agreement was, - and that I would never had paid for such a service especially at those prices? I guess the mediators decision would be anyone's guess? But in either case, maybe my best course of action now is to do nothing and wait to see if she takes me to court. If I receive anymore invoice chases to just reply with "we have a verbal agreement for an exchange of services, so I have no idea why you are sending me this invoice." ?
I am glad to be able to help.
I see, it was a very informal agreement. Agreements like that really do depend on both sides remaining friendly and sane, and she appears to have gone weird (for want of a better way of putting it).
Ideally of course you'd just be able to discuss it and come to some kind of settlement but it would seem that she doesn't want to discuss it. Her sending you an invoice after such a long time (and without discussing it with you) on the basis of such a loose agreement is, as you have said, bizarre.
You could say that (you can say anything you want, especially in semi-formal mediation) but would you really want to give this lady more lessons when she has already 'gone strange'?
If it was me then I think, if I were in your position, I'd want to do as I've suggested: She has put a value on her work so I'd do the same for my work, invoice her (referring to the original verbal agreement), and pay the difference, thus leaving her either to be satisfied with that or pursue me to court.
That said, based upon the very informal original agreement you describe above, you could just wait and see what she does next. She should give you warnings before actually issuing a court summons.
I should add that, if she did take you to court then she would need some contractual basis to justify her rate of pay. Her just saying "that's my usual rate" (or similar) might not be adequate when your original verbal agreement was so loose and vague. She would not, I presume, have any written customer agreement with you.
Remember that your exchange of services definitely should have involved invoicing each other so her invoice is entirely explicable and appropriate in that context (even if the rate of pay might not be). The informality of the agreement doesn't mean that it was any less a commercial exchange that should be invoiced. It is only the lateness of the invoice that is bizarre, as well as the fact that she is apparently forgetting the mutual aspect of your agreement, and perhaps a pay rate that is plucked out of the air. If you did any work for her at all as a result of the agreement (any lessons at all) then she does owe you something to offset what she thinks you owe her.
As things stand, perhaps waiting and seeing is the least bad thing you can do (if she won't just talk to you on the phone, or by email, or by letter). Do record your calls if you speak to her (or her secretary) on the phone.
Last edited by markrlondon; 12th May 2022 at 16:32.
In my FB Messager I still have all the conversations that we've had, proving that we were friends and regularly in touch, - all of this stopped shortly before I received the first invoice, and she hasn't returned to my classes (or any other ones as it's a close knit community), - so it all points to the fact that she has lost interest in this hobby, & wants the money instead. Her avoidance tells me that she knows she's in the wrong but is too embarrassed to face me. I wonder if these circumstances would be taken into account.
Strangely enough it wouldn't bother me, - I would be happy to give her private lessons, as I'll be operating in an area I am very comfortable with (and she is a relative beginner), - It would be interesting to see her face to face also after all this avoidance.
A gossipy aside, I got in touch with a ex-long-term friend of her's who used to work for her, she said that she'll never have anything to do with her again for many reasons.. & when she worked for her, she was regularly asked to lie to her clients.
The last email from her secretary stated that she was now on leave for a week or so, but on her social media yesterday she stated that she was working. I strongly suspect all the delays and meeting no-show excuses in the past were mostly lies too.
Thank you again - I will digest, probably re-read, and mull this all over...
That could be very useful. It might be a good idea to see if you can copy your FB Messenger conversations with her to a locally stored text file. That way you have an archive copy (that can also easily be printed out for evidential purposes if needed) no matter what happens to FB or your FB account.
Yes, the overall circumstances that led up to any court action would be taken into account as they form the justification (or lack thereof) for her billing you and hypothetically taking you to court.
It is tempting to say that she would be mad to try and take you to court as her case is so poor but, based upon her very odd behaviour, who knows what she might try to do.
Good grief!
You may wish to record evidence of both of these things (e.g. screenshots, chat transcripts, etc.) as they are evidence of dishonesty. Such evidence could potentially come in useful later.
Has she actually taken you up on the lessons over the last 3 years? And has she done the accounts during this time? Is she billing you for the latest year or all 3? If it’s a no and a yes to the first 2 Qs, could it be her clumsy way of saying this isn’t really working out.
Absent concrete proof of these accusations the OP and friend could end up being accused of libel/slander. I’m pretty sure that “small claims” courts don’t concern themselves with things like that anyway. Either the accountant has a contractual right to payment which she can demonstrate or she doesn’t. The fact that she is not even engaging suggests the latter.
Last edited by David_D; 14th May 2022 at 11:40.
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