OSPE - The Voice - June 2020 - 35

ENGINEERING ACADEMY

* Send timely invoices;
* Review invoices carefully to ensure the billing rate, hours and
disbursements are correct;
* Set shorter payment terms of net 15 days;
* Be polite and create a positive relationship with the client;
* Provide incentives for early or timely payments;
* Have multiple payment methods, which include credit card,
online payment, cheque, wire transfer, etc.;
* For new clients, require credit applications;
* For new clients, secure background information and searches to
assess clients and their financial capabilities; and
* For unfamiliar or smaller corporations, require that the contract
have a personal guarantee, or the contract be entered into
personally with the owner of the corporation.

lawsuits in Ontario. For unpaid invoices, the Limitation Act sets
a two-year period to begin a lawsuit from the end of the term date
for payment of the invoice or when the last payment for the invoice
was received. The law states that invoices must be rendered within
a reasonable time following the services for the foregoing to apply.
The limitation period may restart if the debtor makes partial
payment or acknowledges the debt in writing.
Collections
For smaller unpaid accounts, many companies will use a collection
agency. The main incentive being that the transfer will affect the
credit score of the client.

Legal Action
For larger accounts, you may consider taking legal action. The
following legal options are often used for debt collection:
Good Practices to Collect Unpaid Accounts
* Implement a follow-up system, which requires follow-ups on
* Demand Letter - have a lawyer send a letter for payment.
invoices one week prior and one week after the term date;
The letter should set out a firm deadline for payment and legal
* The key individual who dealt with the client on the project
recourse for non-payment. A lawyer being engaged is, often,
should send both a personal email and phone call to inquire on
enough to secure payment.
the reason for delay and resolve any issues that could be a cause
* The Superior Court of Justice - Small Claims Court - this
for non-payment;
branch of our Court system handles disputes up to $35,000.00.
* If you are able to reach the client, ask them for the timing of when
The Court's practices and procedures are simplified to allow the
payment will be made and then follow-up diligently on that date;
general public to use this legal route to bring or defend a legal
* Offer reasonable installment payments if client is unable to pay
action without a lawyer. The typical steps to be taken are issuing
the full account;
a claim, serving a witness list, providing a document brief,
* Have a signed contract, change/extra approvals and good
attending a settlement conference and trial. The Ministry of the
Attorney General has provided helpful guides on their website
documents, and this back-up should be sent to the client prior
to taking any legal steps;
at https://www.attorneygeneral.jus.gov.on.ca/english/courts/
* Provide written notice to key players for ongoing projects to
guides/. OSPE also provides a course that teaches engineers how
advise that services may be abandoned if no payment is received;
to pursue a Small Claims legal action from commencement to
and
trial.
* Set a firm and final deadline for payment before collections or
* The Superior Court of Justice - Simplified Procedure &
legal steps are taken.
Regular Procedure - the Simplified Procedure is a streamlined
procedure to pursue legal actions between $35,000.00 and
$200,000.00. The Simplified Procedure sets limits on regular
Pursue unpaid accounts immediately. The longer you wait, the
Court practices and procedures to ensure that the matter is
greater the likelihood of non-payment. If an account has not been
paid within 90 days following the term date and the client has not
processed in a cost efficient and timely manner. If the amount
provided a promise to pay or a reasonable explanation for nonexceeds $200,000.00, then the regular procedure applies. The
payment, then pursue collections or legal
typical steps to be taken are
steps. However, if you have construction
issuing a claim, an exchange of
lien rights then you should be more
documents, examinations of
Our Government recognized many
the parties involved, a pre-trial
proactive due to the strict timelines under
engineering services as essential and
conference, mediation and trial.
the Construction Act.
much of the engineering community
The Ministry of the Attorney
has been able to continue working
Limitation Period
General has provided a helpful fact
remotely. The amount of work
For non construction lien related accounts,
sheet for Simplified Procedure
available has reduced, however
on their website at https://www.
you must keep the Limitations Act, 2002,
the
overhead
expenses
for
sole
attorneygeneral.jus.gov.on.ca/
S.0. 2002 (the "Limitations Act"), in mind.
practitioners,
small
and
large
firms
english/courts/civil/fact_sheet_
The Limitations Act is the statute that
alike have remained.
governs the time period for beginning
simplified_procedure_76.pdf.

Summer 2020 THE VOICE

https://www.attorneygeneral.jus.gov.on.ca/english/courts/ https://www http://www.attorneygeneral.jus.gov.on.ca/english/courts/civil/fact_sheet_simplified_procedure_76.pdf

OSPE - The Voice - June 2020

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