DEBT RECOVERY
Debt recovery in Australia can be simple or complicated. It is that simple. If you are owed money the last thing you want to do is incur more costs and spend your time fighting to get the money you are owed. Especially, when the dispute has potential to break down established commercial relationships. However, at some point you will need to decide, is this amount worth the hassle and the costs associated with recovering the debt?
Letter of Demand
To reduce your costs and attempt to resolve a matter quickly, we always suggest a sending letter of demand from a law firm. Why?
Letters of demand can be relatively cheap to produce compared to initiating proceedings in a court and may quickly resolve the matter in a cost-effective manner. It also allows your lawyers to become familiar with your matter in case you do need to proceed to court at a later date.
A cleverly drafted letter of demand can bring to your debtor’s attention, that, if they do not pay the debt owing, they may also incur two sets of legal cost theirs and yours and interest on the claimed amount, which can be significant.
If the letter of demand is unsuccessful, it still demonstrates to the court that you attempted to resolve the matter in a cost-effective manner prior to proceeding to court, which the courts generally looks favourable at when determining matters.
Commencing Proceedings – Jurisdiction
Unlike most television series, cases normally settle before proceeding to trial. Because, who wants to pay more money than they need to, especially when you are trying to recover monies owing to you?
Legal costs will be incurred if you obtain a solicitor to act on your behalf and there may be further costs associated with taking steps in a proceeding. In that regard, it is important to note that a claimant cannot claim legal costs if they have not engaged a lawyer. On this basis, if you wish to obtain your legal costs, we recommended that you to obtain legal advice in order to consider your prospects of being awarded costs.
Discretion of the Courts
Courts have a discretionary power to award costs, and you should not rely on wining costs as a surety if you win your claim against the debtor. In fact, it is so uncertain that a court may award indemnity costs (inflating the normal costs awarded), or you may be ordered to pay the other sides costs if your claim fails. You could also run into the situation where a party disputes the costs it is ordered to pay to you and a costs assessment is ordered by the court.
QCAT and Costs
As QCAT is a Tribunal, it is unusual for the tribunal to award costs. It is more common for the parties to pay their own costs. This is because QCAT is designed for the parties to be able to have their matters heard without the need for lawyers to be present, which does not result in legal costs being incurred in a typical tribunal hearing. This is not to say that you cannot have legal advice in respect of QCAT matters or seek leave to be represented by a lawyer. The point here is that obtaining costs in a QCAT matter is generally not a concern of the tribunal members.
Unpredictability
Generally, lawyers have a fair idea of the court process that will be undertaken and can provide a ballpark cost estimate your matter is likely to incur. However, there may be situations, legal arguments or events which were not anticipated by your lawyer and may result in your matter incurring additional legal costs that were not originally foreseen. This unpredictability creates some predictability in that it is normal for matters to settle rather than proceeding to trial as the drawn-out court process can take its toll on claimants and defendants both financially and mentally.
This is not to say that having your day in court is not important and or the appropriate method for you to recover the monies owing to you. Sometimes you have no choice, and you need to proceed to court. Provided it is done correctly, litigating can be a particularly useful tool in order to recover money owed to you from your debtor.
Please contact our lawyers at Wallace Law Group for assistant with your debt recovery - team@wallaceweir.com.au 1300 011 123
