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Construction debt collection cases up by 32pc

Leading debt collector LPL, which has more than 200 construction firms on its books, said there has been a 32 per cent rise in builders calling upon its services in the last two months.

Contractors are increasingly calling on the services of debt collectors with businesses refusing to pay contractors for work not properly costed and agreed.

The number of debt collection instructions LPL received from construction firms totalled 6,516 over the last two months compared with 4,937 for the first three months of the year.

LPL said the average debt totalled £12,500 adding up to an average of £80 million outstanding.

LPL warned contractors to get their paperwork in order, or risk never recovering the money.

Managing director Stephen Lewis said: “Businesses are feeling the pinch and are delaying payment on the grounds that work has not been properly costed and agreed.

“Extra work that has been carried out on a simple ‘OK go ahead’ basis is coming back to haunt them when the invoice is presented. And sometimes contractors only have themselves to blame.

“If the paperwork is in order, however, the chances of recovery – either with or without litigation – are dramatically improved.”