Clients often have questions regarding the litigation process for collecting debt. Different attorneys have different ways of processing litigation cases for clients. While some may be exhaustive about obtaining judgment, others are more relaxed and let the process play out without much interference.
Here we outline the basic litigation process that each case will follow in four clear steps:
Step 1: Letter of Demand
Although not mandated by law, it is always a good idea to send a letter of demand to a debtor. In this letter of demand, you should state that the debtor has failed to make payment and that he or she is being given five business days to pay. The letter of demand also places the debtor in more debitoris which is required under most contracts when a party is in breach. Should the debtor fail to pay during this period, you may instruct an attorney to issue summons whereby the debtor shall be liable for cost and interest.
Step 2: Summons Instructions to An Attorney
If you haven’t received payment after the grace period of five business days, you should instruct your attorney to draft summons for the recovery of your money from your debtor. This isn’t necessarily a lengthy process. Depending on your attorney’s efficiency and capacity, it usually takes around 5 – 10 working days to draft the summons.
Step 3: Summons Is Issued at Court and Served on The Debtor
The summons then needs to be issued at court and served on the debtor by the sheriff of the court. You can ask your attorney to serve these two separate documents on the same day, but be mindful that the sheriff fees will be higher if they need to complete instructions urgently. Depending on how much you are willing to spend on fees and how quickly you need the litigation processed, this could take anywhere between 1 – 7 working days.
Step 4: Wait for A Letter of Intention
The debtor, also known as the defendant, has 10 days to deliver a notice of intention to defend after he or she has received the summons. You may claim a summary judgment from court depending on the nature of your claim. This process circumvents the entire litigious process by forcing the defendant to deliver his defense at least three days before the date of the application. Should the court be of opinion that the defendant merely entered an appearance to defend to delay time or has no bona fide defence, the court will grant judgment in your favour.
If you haven’t applied for a summary judgment, the defendant will have 20 business days to deliver his “plea”, which is a document containing his defence. After receiving the plea, your attorney may advise to deliver a “replication”, which is a reply to the plea that addresses certain averments that have been made in the plea.
After this, pleadings are closed.
What If New Evidence Arises?
Many interlocutory procedures may apply, such as discovery of documentary evidence or expert witness statements, for example. The extent to which this delays your case will depend on the nature of your case as well as the aptitude of your attorney.
Interlocutory procedures could take anything from 6 months to 2 years. Once you are ready for trial, parties need to have a pre-trial conference where the material aspects of the claims are discussed and a settlement is attempted. Should no resolution be found, the matter will be ripe for trial and you may apply for a trial date. Your case will then come before a judge or magistrate and be adjudicated upon.
Make sure you hire experienced litigation lawyers who can ensure you get the result you deserve.
From the above it is evident that the litigation procedure can be very simple or very complex depending on the nature if the claim and the parties involved. This has a direct implication on the financial costs as well. The emotional cost to yourself, employees and the distraction from your day to day management of your business are even harder to calculate.
Non-paying customers will always be part of business, but every effort to resolve non-payment problems with customers outside of the legal process should be investigated.
The information for this article was kindly provided by Jean-Michel Pretorius, a Director at Pretorius Law Incorporated.