Collecting in Ireland
Days sales outstanding (DSO) in Ireland remains at around 50 days. Small and medium sized businesses in Ireland, have an increased DSO of 60 days, with 24 per cent of them waiting up to 120 days before they see funds. Legal action can be expensive and time consuming, often with little reward. Debt collection agencies are a good way of identifying payers from non-payers.
Availability of financial information
There is little financial information on Irish businesses and even though incorporated companies must register with Companies House, it may, in practice, be fairly difficult to trace debtors. Professional networks may help obtain reputational insights, however a specialised provider is strongly advisable.
Days Sales Outstanding (DSO)
The payment behaviour of domestic companies is poor as debtors are not in a state of urgency when the time comes to settle monies owed. In addition, debtors are aware of how to play the system and the high cost of legal action can be prohibitive.
How long could legal action take?
Obtaining a decision may take a year, but this time frame may be doubled if compulsory enforcement is required. Appeal claims brought before the Supreme Court may take an additional three years. Apart from postage matters, disputes involving foreign parties would not be treated differently from disputes involving domestic parties only. No delays should therefore be expected from this point of view.
Download the Ireland Country Report here
Alternatives to legal action
Mediation and arbitration (as regulated under the Arbitration Act of 2010) is common in Ireland, and in fact the High Court and the Commercial Court increasingly tend to interrupt litigation proceedings in order to allow a faster settlement of the dispute through ADR methods.
Mediation involves nomination of a mediator who is given responsibility for helping the parties reach a compromise. In other words, the mediator has no authority to decide on the behalf of the parties and they cannot bind the parties with a decision. An agreement is only binding if a settlement agreement is entered into between the parties at the end of the mediation.
The mediator acts as a facilitator to settlement and, in debt related disputes, the solicitors would tend to act as such.
Arbitration involves the parties agreeing to rely on an independent and impartial third-party arbitrator, who is given authority to settle their dispute on their behalf. The arbitrators’ decision will be binding on the parties.
Read the full report to better understand the nature of collecting payments in Ireland.
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