Wednesday, 20 June 2012 10:18

USA Debt Collection - Court Witnesses

In part two of our series on Debt Recovery in the USA our American Debt Collection agent outlined the 10 questions any creditor must ask prior to taking a claim to court in the USA. Whilst many of the points raised in this piece are not entirely dissimilar to the questions any creditor should ask before pursuing legal action, one critical point is often overlooked.

If your company is considering taking legal action in the USA to recover unpaid invoices, you will be expected to provide at least one witness at trial. Our US affiliate explains:

What do we mean by witness?

Unlike legal proceedings issued in the UK where a lawyer can often secure judgment without the need for the creditor to appear in person, in an American court room you will be expected to attend personally, or provide another witness from your business that is familiar with the case.

Generally a creditors witnesses will fall into one of two categories a "books and records" witness or a witness who is familiar with the actual transaction that took place with the debtor.

The books and records witness is usually an individual from the creditor's Accounting or Credit Control Department who has knowledge of the creditor's documents and how their accounting records are maintained. This individual must be able to testify that the documents being introduced as evidence are, in fact, the creditor's documents. This witness must also be able to testify to the fact that the debtor does, in fact, have a delinquent account with the creditor.

The other type of witness must be able to testify to the terms of the transaction in question. This witness would normally be the creditor's Sales Representative or even a manager or Director who was involved in dealing directly with the debtor, and who would, therefore, have intimate knowledge of the details of the transaction.

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What Kind of witness is required?

In cases where no dispute or disagreement around the facts of the case exists a books and records witness will suffice. However in cases where there are disputes about the transaction a witness will be required that has intimate knowledge of the facts surrounding the case. This person can also act as the books and records witness, provided they have the necessary knowledge of the creditor's documents and systems.

But be warned, if your case is disputed and the witness does not have the ability or experience to also act as the books and records witness, then the appearance of both witnesses will be necessary.

Why do we need to provide a witness?

Many creditors ask us about the necessity of a "warm body" being present at the time of trial. Why wouldn't an affidavit or deposition suffice? Unfortunately, a "warm body" is required as an affidavit or deposition cannot be cross-examined by the opposing party. If your company can not supply a witness, for whatever reason, we strongly recommend that you give the collection attorney blanket authority to settle the case prior to trial.

This recommendation is given based on our extensive experience of helping international creditors collect unpaid invoices. Put simply, if your company can not provide a suitable witness in court, then make every effort to avoid legal action. Even if it means accepting a lesser sum in settlement.

If your company needs help with debt collection in the USA then why not contact us to discuss your needs. With no contract and no advance fees for amicable debt recovery in America you have nothing to lose and potentially everything to gain.

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