What if my customer doesn’t pay? What legal recourses are available?

We suggest that it would be good to put all demands in writing, and follow by a follow-up telephone call. The first step would be to write a friendly reminder letter, allowing the customer several days to make payment.

In the event of non-payment, the second step would be to write a slightly less friendly reminder letter threatening legal action, giving the customer several days to make a payment. If the customer still refuses to pay, it is time to take legal action. For sample of reminder letter, please refer our book!

In terms of legal action, it may consist of you retaining a lawyer or going it alone. It is only advisable to go it alone if you have some experience in litigation and are familiar with the laws of Taiwan, are supremely confident in your claim, have indisputable evidence, and the amount owing is not too large. One way in which to obtain advice is to visit a pro bono legal service.

Legal action does not mean initiating proceedings in a court of law. Suing a delinquent customer is only a last resort. Going to court is expensive, time consuming, and mentally draining. It is best if you can come to an arrangement through negotiation or mediation. Your lawyer can negotiate with the delinquent customer (or the delinquent customer’s lawyers) on your behalf. An alternative is mediation. If both parties agree, an independent mediator can be appointed to make a recommendation on the dispute. Of course, the outcome of outside mediation is dependent upon the terms of the mediation agreement and may not necessarily be binding.

Finally, if the matter is still not resolved, it is time to sue the delinquent customer. Depending upon the amount claimed (and the nature of the dispute), there are different types of proceedings.