Debt Recovery Service
Our debt recovery service can help your business to recover unpaid invoices of up to £100,000.
Our debt recovery service applies to invoice debts which are not disputed, and is available for business-to-consumer or business-to-business debts.
The service will not be appropriate for all debts, including for example many construction contracts. We are happy to discuss the circumstances with you and advise you as to whether our debt recovery service is suitable for your case. If the debt exceeds £100,000 or does not fit within the standard structure, an estimate can be given for the necessary work.
Stages of the work and costs
1. Pre-action stage 1
Registering the debt on our system, drafting the initial letter before action to the debtor and calculating the level of compensation due. The cost of this is £30 plus VAT at 20%. This work will be undertaken by a Trainee Solicitor, who will be supervised by a Partner in the Commercial Litigation department.
2. Pre-action stage 2
If a response is not received within the given time frame, we move onto the second stage of work which involves drafting a more strongly-worded letter to the debtor. The cost of this is £20 plus VAT at 20%.
3. Issuing Court proceedings
If the above pre-action letters do not resolve matters, we would then advise on the next steps and the likely costs. Should you wish us to do so, we can issue proceedings on your behalf. The costs for issuing an undisputed debt are as follows:
|Debt value||Court fee||Our fee (fixed costs)||Total|
|Up to £5,000||£35 to £205||£50 to £80||£85 to £285|
|£5,000.01 – £10,000||£455||£100||£555|
|£10,000.01 – £100,000||5% value of the claim||£100||£ TBC|
The above fees are subject to change in line with advice from HM Courts and Tribunals Service.
We are able to collect instalment payments from a debtor on your behalf. We charge an administration fee of 15% of the instalment amount plus VAT at 20%, subject to a minimum fee of £5 plus VAT at 20%, for each instalment that is collected.
Anyone wishing to proceed with a claim should note that:
• Interest and compensation may take the debt into a higher banding, with a higher cost; and
• The costs quoted above are not for matters where the debt is defended or where enforcement action, such as instruction of the Court bailiff, is needed to collect your debt.
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What is not included?
The above fees do not include:
• Where no Acknowledgment of Service or Defence is received, applying to the Court to enter Judgment in default; or
• When Judgment in default is received, write to the other side to request payment.
If at any point we enter into correspondence with the debtor or are instructed to carry out work outside of the standard debt recovery structure as detailed above, our charges will be based upon the time spent on the matter.
Our current hourly charging rates are as follows:
|Partner||£285 to £310 plus VAT at 20%|
|Associate / Solicitor||£200 plus VAT at 20%|
|Trainee Solicitor / Paralegal||£160 plus VAT at 20%|
How long is my case likely to take?
If proceedings are not needed, matters usually take 3 to 4 weeks, depending upon the conduct of the debtor. If a claim is issued and proceeds without being defended, this matter will take a further 6 weeks or so to judgment. If the claim is defended, we would give you details of the likely timescale and cost when it is clearer what issues are involved.
What happens if the debtor enters a Defence, or if the claim falls outside the debt recovery scheme?
For details of Court issue fees payable, please see the table above. If a claim is defended, trial fees are also payable by the Claimant. The hearing fee for small claims ranges from £27 to £346 depending on the size of the claim. For a fast track claim, the hearing fee is currently £545. For a multi-track claim, the trial fee is currently £1,175.
The following is a general guide as to the costs involved in contested debt claims, but the actual costs involved in each case will vary according to the individual circumstances:
We do not often act for clients in defended small claims because the claim value is such that legal costs are not usually recoverable. If you would like us to act for you in a defended small claim, we will provide you with an estimate of our costs. Such costs would likely be up to £5,000 plus VAT at 20%. Typically, a defended fast track claim can cost £10,000 to £15,000 plus VAT at 20% and disbursements such as Court fees and Counsel’s fees. Depending on the complexity band, Counsel’s fees for representing you at the trial are likely to be £1,600 to £2,900 plus VAT at 20%. Fast-track claims are usually limited to no more than 1 day at trial.
The new intermediate track will typically deal with claims ranging from £25,000 to £100,000 and can cost between £25,000 and £35,000 plus VAT at 20% and disbursements such as Court fees and Counsel’s fees. Depending on the complexity band, Counsel’s fees for representing you at trial are likely to be £3,200 to £5,800 plus VAT at 20% for preparation and the first day of the trial and £1,400 to £2,900 for each additional day. The intermediate track claims will last no longer than 3 days.
In our experience, pre-action work including trying to negotiate a settlement and preparing to issue proceedings can take up to 3 to 4 months. Defended cases are usually concluded within 12 to 18 months of the date of issue of proceedings.
The above estimated fees do not include:
• Claims that include issues other than debt recovery, such as an application for an injunction;
• Making or defending a counterclaim;
• Dealing with detailed assessment of costs after judgment or acceptance of an offer; or
• Enforcement action.
If work needs to be completed that is not covered by the above estimates, a separate estimate will be given as appropriate.