---

name: outreach-payment-recovery-flow
description: Use when a legal AI product or its law firm users need to run a structured payment recovery sequence — drafting demand letters, escalation notices, and coordinating legal action for unpaid invoices or outstanding receivables. Provides a jurisdiction-aware escalation ladder from polite reminder through formal demand to court filing. Triggers on requests to recover unpaid fees, draft demand letters, or manage debtors.
license: MIT
metadata:
id: outreach.payment-recovery-flow
category: outreach
intent: ["outreach", "payment recovery", "demand letter", "debt collection", "receivables"]
related:
- outreach-inbox-scan
- draft-demand-letter
- kb-commercial-law-uae
priority: P3
source: Louis — HAQQ Legal AI (github.com/sboghossian/mini-claude-for-legal)
version: "1.0"

Payment Recovery Flow

Unpaid invoices are a significant operational problem for law firms and legal AI products. The payment recovery flow provides a structured, jurisdiction-aware escalation ladder — from polite reminder to formal demand letter to court action — calibrated so that each step maximises recovery probability while managing relationship cost.

Purpose

Execute a complete payment recovery sequence:

1. Initial reminder — maintain relationship, prompt payment
2. Formal reminder — signal seriousness, preserve legal position
3. Formal demand letter — create a record, trigger limitation clock if disputed
4. Pre-litigation notice — mandatory in some jurisdictions before filing
5. Court filing / arbitration referral — last resort

Inputs

Input	Why it matters	Required
Outstanding amount	Determines proportionality of recovery steps	Yes
Days overdue	Determines starting point on the escalation ladder	Yes
Governing law / jurisdiction	Controls which demand letter format and court is appropriate	Yes
Contract terms	Payment terms, interest rate, dispute resolution clause	Yes
Prior communications	Has the debtor responded? Disputed? Promised to pay?	Yes
Relationship status	Is this an ongoing relationship worth preserving?	Informs tone

Escalation ladder

Step 1 — Friendly reminder (Day 7–14 overdue)

Tone: collegial. Assume oversight, not intent. No legal language.

Subject: Invoice [Number] — Quick follow-up

Hi [Name],

I wanted to follow up on Invoice [Number] for [Amount], which was due on [Date].
Could you confirm this has been processed? If there's any issue on your end, I'm happy to help sort it out.

Best,
[Name]

Step 2 — Formal reminder (Day 21–30 overdue)

Tone: professional, firm. Note the overdue status. Request payment by a specific date.

Subject: Invoice [Number] — Payment Overdue

Dear [Name],

Invoice [Number] for [Amount], due [Date], remains outstanding. I kindly request payment by [date 7 days out].

If you have any queries about this invoice, please contact me directly.

Regards,
[Name]

Step 3 — Formal demand letter (Day 45–60 overdue)

Jurisdiction-specific format. This letter creates a formal record and in many jurisdictions is a prerequisite before court action.

Key elements:

• Full party names and addresses
• Amount owed, invoice reference(s), due date(s)
• Interest accrued (if contract provides for it)
• Specific deadline for payment (typically 7–14 days)
• Statement that legal proceedings will commence if payment is not received
• No threats beyond the legal remedies available

Jurisdiction notes:

Jurisdiction	Specific requirements
UAE	A formal demand (إنذار رسمي / Inzar Rasmi) may be required before filing at UAE courts; notarised via a Notary Public for maximum effect
KSA	Formal demand through official channels recommended before HRSD or court filing; notarisation adds evidentiary weight
Lebanon	Mise en demeure (formal notice) is a prerequisite under the Code of Obligations and Contracts for some claims
DIFC	No mandatory pre-action notice requirement but good practice; DIFC Small Claims Tribunal applies for claims under USD 200,000
ADGM	No mandatory pre-action notice but the ADGM Courts' Practice Direction encourages pre-action correspondence
UK	Pre-action Protocol for Debt Claims must be followed before issuing proceedings in England and Wales
France	Lettre de mise en demeure — required in most contract claims before filing; may be sent by registered post or bailiff

Step 4 — Escalation to legal proceedings

If the formal demand produces no response:

1. File at the appropriate court or tribunal
2. For DIFC/ADGM: consider the Small Claims Tribunal for amounts under the threshold — faster and cheaper
3. For UAE onshore: Dubai Courts or Abu Dhabi Courts; Arabic filings required; translation costs apply
4. For arbitration: check the contract's dispute resolution clause — DIAC, ICC, LCIA, or bespoke

Interest on late payment

Jurisdiction	Applicable rate
UAE	Contract rate if specified; UAE Civil Code art 226 cap at 12% p.a. (commercial); courts have discretion
DIFC	Contract rate; or statutory interest per DIFC Courts rules
KSA	Islamic finance principles — interest (riba) is prohibited; late payment penalties must be structured as agreed damages, not interest
Lebanon	Legal rate; courts have discretion
France	Statutory rate (taux d'intérêt légal) published annually by the Ministry of Finance
UK	Late Payment of Commercial Debts Act 1998 — statutory rate of 8% above Bank of England base rate

Note for KSA: structure any late payment provision as a "liquidated damages" or "agreed compensation" clause rather than an interest clause, to be consistent with Sharia principles.

Quality bar

• Demand letters must not overstate the legal position or threaten remedies that are not actually available.
• Every demand letter should be reviewed by a qualified lawyer before sending, especially for amounts above USD 10,000 or where the jurisdiction requires a specific format.
• Maintain a log of all payment recovery communications — dates, content, and responses — as this becomes evidence if proceedings follow.

Related skills

• [[outreach-inbox-scan]]
• [[draft-demand-letter]]
• [[kb-commercial-law-uae]]
• [[output-partner-memo-style]]