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Businesses urged to protect themselves

23rd May 2019

Businesses urged to protect themselves

As the repercussions of British Steel going into liquidation continue, a specialist lawyer at Higgs & Sons says there are steps businesses should be taking now to protect themselves.

Associate Carole Maddock said: “A number of my clients will face significant unpaid debts as a direct result of British Steel’s liquidation, highlighting the fact that the fall out goes far beyond the massive job losses at British Steel itself.

“The potential impact on hundreds of suppliers is huge, both in terms of a downturn in work but also via bad debts as British Steel were bound to have been on credit terms with most of their suppliers.

“Here in the Black Country businesses will certainly be affected. Renowned traditionally as a steel area, we are also still home to lot of heavy industry which again may suffer knock on effects of the liquidation, especially in the current climate of economic uncertainty linked to political uncertainty.”

Carole said that smaller suppliers would do well not to trust in the strength of doing business with a giant like British Steel – last year Carillion was another example of a large corporation going under with a massive knock on effect.

She said: “Businesses must protect themselves, and there are two obvious ways to do that:

  1. Chase debts earlier – don’t leave debts longer than a maximum of two to three months before pursuing.
  2. If a customer is over their credit terms, try to resolve the situation as early as possible. There will most likely be a genuine reason why they have gone over – cash flow, insolvency concerns or even because of a dispute. Find out quickly - debts are easier to collect when fresh.

“But the most prudent piece of advice I can offer is to seek legal advice, whether that be before, during or after a financial crisis.”

The specialist team at Higgs & Sons offer low cost fix fee and contingent fee debt recovery. Contact Carole Maddock or Arshad Mohammad.

Consider whether a retention of title to goods clause should be added to your terms and conditions, in order to assist with the recovery of goods in circumstances of insolvency of a customer. Higgs can offer a terms and conditions review including drafting of a retention clauses. Contact Sarah Webb.

Or if you need advice on any of your own insolvency issues, contact David Ellis. Telephone 0345 111 5050.

 

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