When a collection claim results in litigation, a creditor must become familiar with certain legal concepts that will often determine whether or not the creditor sees any recovery as a result of the lawsuit. One such legal concept is the “burden of proof.”
In all civil litigation, the burden of proof requires the plaintiff, the creditor, to convince the trier of fact (either a judge or jury) of the plaintiff’s entitlement to the relief being sought. The plaintiff must prove each element of its claim, or cause of action, in order to recover. In other words, the initial burden of proof is on the plaintiff to show the court why the defendant/debtor owes the money.
The underlying legal cause of action in a collection case is typically for breach of contract. Generally, a plaintiff must show: 1) the existence of a contract and its essential terms; 2) a breach of a duty imposed by the contract; and 3) resultant damages. This is why it is critical that a creditor keep meticulous and detailed business records, which can be used to meet the plaintiff’s initial burden of proof.
Invoices between the parties can be offered as evidence of the existence of a contract between the parties. The breach is the defendant/debtor’s failure to pay according to invoice terms. Lastly, the plaintiff/creditor has been damaged because they have provided goods to the defendant/debtor and have not received payment. Seems simply enough, but one would be surprised at the number of creditors who do not have or simply do not feel they should be burdened with having to produce such supporting documentation for the court.
Keep in mind that when your attorney asks you to provide documentation of the claim against the debtor, he or she is not questioning the merits of your claim, but rather preparing to meet the burden that the law has placed on you as a plaintiff in a civil action. Also, if you haven’t realized it by now, simply stating that the debtor knows they owe the money will not suffice.