Unpaid Invoice Recovery

Your Right to Be Paid

If you provided goods or services and issued an invoice, you have a contractual right to be paid. This applies whether you have a written contract, a verbal agreement, or even an implied contract based on conduct. The law is clear: if someone accepted your work, they owe you the agreed price.

Even without a formal contract, you may have a claim under the principle of quantum meruit — a Latin term meaning "as much as is deserved." If you carried out work at someone's request and they benefited from it, the court can order them to pay a reasonable sum for the value of that work, regardless of whether a price was agreed in advance.

The Late Payment of Commercial Debts Act 1998

If your unpaid invoice relates to a business-to-business transaction, the Late Payment of Commercial Debts (Interest) Act 1998 gives you powerful additional rights. You can claim statutory interest on the outstanding amount and fixed compensation on top.

Statutory interest accrues at 8% per year above the Bank of England base rate. This runs from the date the invoice was due — typically 30 days after the invoice date or delivery of goods, unless different terms were agreed.

Fixed compensation is payable on each unpaid invoice, regardless of size:

• Debts up to £999.99 — £40 fixed compensation
• Debts from £1,000 to £9,999.99 — £70 fixed compensation
• Debts of £10,000 or more — £100 fixed compensation

You can also claim reasonable recovery costs — for example, the cost of sending recorded delivery letters, paying for credit checks, or other steps you took to chase the debt.

How to Recover an Unpaid Invoice: Step by Step

Step 1: Send a Final Reminder

Before escalating, send one clear final reminder. Reference the invoice number, the amount outstanding (including any interest accrued), and give 7 days to pay. Keep it professional but firm. This creates a paper trail and shows the court you acted reasonably.

Step 2: Send a Letter Before Action

A letter before action (also called a letter before claim) is a formal legal requirement before issuing court proceedings. It must state the amount owed, the basis of the debt, and give the debtor 14 days to pay or propose a payment plan. Warn them that if they fail to respond, you will issue a county court claim and they will be liable for court fees and additional costs.

Many invoice disputes settle at this stage. A properly drafted letter before action signals that you are serious and that the cost of ignoring you will only increase.

Step 3: File a County Court Claim

If the letter before action doesn't resolve things, file a claim using the N1 claim form. You can claim the invoice amount, plus statutory interest (at 8% + base rate), plus the fixed compensation (£40–£100), plus court fees. Claims up to £10,000 are allocated to the small claims track — an informal process where no solicitor is needed and costs are minimal.

Once the claim is filed, the defendant has 14 days to respond. If they don't respond at all, you can apply for default judgment — a court order for the full amount without a hearing.

Step 4: Enforce the Judgment

If you win and they still don't pay, there are several enforcement options available:

• Warrant of control — county court bailiffs attend the debtor's premises to seize goods to the value of the debt
• Attachment of earnings order — payments are deducted directly from the debtor's wages by their employer
• Third-party debt order — money is taken directly from the debtor's bank account
• Charging order — a charge is placed on the debtor's property, secured against any future sale

How Much Can You Add to Your Claim?

What If They Dispute the Invoice?

They Claim the Work Was Substandard

A common defence. The debtor may argue that your goods or services were defective, incomplete, or not as described. If they have a genuine complaint, they may be entitled to a reduction — but they cannot simply refuse to pay the entire invoice. The burden is on them to demonstrate the defect and quantify the loss. Gather evidence of the work you completed: photos, delivery records, sign-offs, and correspondence confirming satisfaction at the time.

They Offer a Partial Payment

If the debtor offers less than the full amount, consider carefully. You can accept a partial payment "in full and final settlement" (which closes the matter) or accept it as a payment on account and continue to pursue the remainder. Make your position clear in writing — accepting a cheque marked "full and final settlement" can extinguish the rest of the debt.

"I Never Agreed to That"

If the debtor denies the contract existed or disputes the terms, you'll need evidence of the agreement. Emails, text messages, purchase orders, or even witness testimony can establish what was agreed. If no price was formally agreed but work was done, the court will assess what a reasonable price would be under quantum meruit.

Court Fees

Court fees for a money claim depend on the amount you are claiming:

• Up to £300 — £35
• £300.01 to £500 — £50
• £500.01 to £1,000 — £70
• £1,000.01 to £1,500 — £80
• £1,500.01 to £3,000 — £115
• £3,000.01 to £5,000 — £205
• £5,000.01 to £10,000 — £455

These fees are added to your claim and recovered from the defendant if you win. If you are on a low income, you may be eligible for fee remission (Help with Fees form EX160).

Time Limits

Under the Limitation Act 1980, you have 6 years from the date payment was due to bring a claim for an unpaid invoice. After 6 years, your claim becomes statute-barred and the court will not hear it. Don't wait — the sooner you act, the stronger your position and the easier it is to collect.