Home News Civil Litigation An Unpaid Invoice is Not Always Enough to Prove an Outstanding Debt

An Unpaid Invoice is Not Always Enough to Prove an Outstanding Debt

It may seem obvious, but the first step in any debt recovery action must be to show that you are in fact owed money. As a High Court ruling showed, production of an unpaid invoice will not always be enough to satisfy that burden of proof.

The case concerned a claim by a town and country planning consultancy against a former client in respect of allegedly unpaid professional fees. The client had paid over £30,000 in respect of the consultancy’s services, but six invoices with a face value totalling almost £50,000 remained unpaid. In reliance on those invoices, the consultancy launched proceedings to recover that sum from the client.

Following a hearing, a judge rejected the client’s arguments that the consultancy had advised him negligently or that there was no binding contract between them. With regret, however, he concluded that the consultancy had failed to provide sufficient evidence to establish the amount of the alleged debt. As a result, its claim was dismissed in its entirety.

In ruling on the consultancy’s appeal against that outcome, the Court noted that the bills it had presented to the client came to about £80,000, compared with an original estimate for the work of £16,500. The consultancy asserted that there were good reasons for that divergence. The judge was, however, entitled to insist on a clear explanation of the substantial increase in costs in the form of a detailed breakdown of what work was done, who did it, how long it lasted and what was involved. The invoices alone were insufficient to support the consultancy’s claim.

The Court noted that the nature and extent of the evidence that may be required to discharge the burden of proof in any given debt recovery claim will vary depending on the circumstances of the case. Save for £1,650 in respect of a fee paid to a barrister, however, the consultancy had failed to prove the quantum of the alleged debt and the judge was justified in dismissing its claim.

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Published
21 April 2022
Last Updated
21 May 2022