Our Prices - Debt Recovery
Recovery of Business and Personal Debts
Debt recovery services are provided by our Civil Litigation Team of Mr Richard Barca and Mr Patrick Shore, partners of the firm. Their hourly rate is £300 + VAT(currently at 20%). They will be assisted from time to time, by a trainee solicitor at an hourly rate of £150 + VAT.
Further details of the members of our team including qualifications and experience can be accessed here
How debts arise
There are many different ways that personal debts can arise including:
Unpaid invoices
Unpaid compensation arising from breach of contract
Failure to issue a promised refund from a purchase
Unpaid wages from an employer
Money lent to a friend, relative or business
A bounced cheque from a person or organisation
An unreturned deposit from a landlord
Rent owed by a tenant or lodger
Our Fees
(a) Fixed – Fees for Undisputed Debt Recovery
However the debt has arisen the staged process of recovery is fundamentally the same and is embarked upon with the hope that a settlement can be reached without the need to issue court proceedings though every Creditor (Claimant) should be prepared for this necessity in order to obtain a County Court Judgment against the Debtor (Defendant).
Our fixed fees are based partly on the hourly rates referred to above and partly on the value of the claim. They do not include any expenses, known as Disbursements, which are due to third parties e.g. Court Fees. These are shown in the table below alongside the Court Fee in the event court proceedings are necessary.
|
Debt value* |
Our fees |
Our Total Fee |
Total |
|
Up to £5,000 |
£750 (+ VAT) |
£900 |
£35 - £205 |
|
£5,001 - £10,000 |
£1,500 (+ VAT) |
£1,800 |
£455 |
|
£10,001 - £50,000 |
£2,000 (+ VAT) |
£2,500 |
5% of the value of the claim |
|
£50,001 - £100,000 |
£2,500 (+ VAT) |
£3,000 |
5% of the value of the claim |
*Please be aware that any interest or compensation claimed on the debt may take its value into a higher banding and with increased fees.
Our fixed fees are intended to cover all the following stages of work up to obtaining a CCJ, but in the event of unforeseen circumstances and/or complexity we will seek your authority to increase our fees proportionately. Our fixed fees do not include any work that might be required to enforce the CCJ.
STEP 1
Consider instructions, your evidence and all relevant documentation provided
Advising you on the limits of recovering your legal costs and that the VAT element of our fees cannot be claimed from the Debtor.
Conduct appropriate searches and checks to identify the debtor
Gather further evidence if necessary.
STEP 2
Draft and send a Letter Before Action to the Debtor with evidence of the Debt and demanding a reply within 14 days and full settlement of the Debt within 30 days.
Receiving payment and sending it to you, or
STEP 3
STEP 4
Where no Acknowledgment of Service or Defence is received, request the Court to enter a Judgment in Default.
On receipt sending the Judgment to the Debtor demanding full payment within 14 days
In the absence of any payment advising you on the available means of enforcing the Judgment.
Should the Debtor settle the Debt in response to the Letter Before Action and Steps 3 & 4 are unnecessary our fixed fee will be reduced proportionately.
Timescales
We are usually in a position to send out a Letter Before Action to the Debtor within 3 – 10 working days of your instructions dependent upon the availability of evidence and all relevant documentation.
The Debtor is requested to settle your claim within 30 days
In the absence of any settlement County Court Proceedings will be lodged at Court within the next 5 working days and issued by the Court within 24 hours if submitted online. Claims lodged on paper forms can take 3 – 4 weeks to be issued.
Once issued the Court usually serves Proceedings on the Debtor within 7 working days.
If the Debtor fails to file an acknowledgement of service within 14 days of the date of service, Judgment (CCJ) can be requested against the debtor on day 15.
If the Debtor files an Acknowledgement of Service they will be entitled to a further 14 days to file their Defence. Judgment can be requested on day 29 after the date of service of court proceedings if no Defence is filed.
We will always attempt to settle your claim before issuing court proceedings and continue to do so even after proceedings have been issued.
(b) Disputed Debt Recovery
Where a Debtor challenges legitimacy or amount of the debt it is most likely that a Defence will be served on the Creditor at Stage 4 above and the Court will direct how the claim is to be progressed up to a Trial, should the matter not be settled in the meantime. As a first step the Court will allocate the claim to one of three ‘tracks;’ the ‘Small Claims Track’ (claims up to £10,000), the ‘Fast Track’ (higher, but relatively straightforward claims), or the ‘Multi-Track’ (higher claims which are potentially complex and may require the evidence of an expert.
Regardless of the track to which a claim is allocated, the amount of work involved increases considerably as it will involve the preparation of witness statements, including that of an expert witness and the attendance at one or more court hearings prior to the Trial. Fast and Multi-track cases may also require specific applications with additional court fees and in Multi-track claims a budget may have to be prepared and approved by the court at a special Cost Management hearing.
For the above reasons we do not conduct disputed debt claims on a fixed fee basis and our fees are calculated by the application of the hourly rates already detailed. It is also very difficult to predict at the outset of a disputed claim the total fee, including disbursements, as a result of the variable amount of work and expenses that could be required.
However, as a very general guide, based on our experience of the majority of cases, we advise that a claimant should be prepared for the potential costs up to and including Trial detailed in the table below.
|
Allocation |
Our fees |
Disbursements (with & without VAT) But NOT including an Expert Witness
|
|
Small Claims Track |
£1,500 - £2,500
(+ VAT) |
£62 - £1,101 |
|
Fast Track |
£1,500 - £7,000
(+ VAT) |
£1,045 - £3,300 |
Multi-Track
(up to £100,000) |
£4,500 - £45,000
(+ VAT) |
£4,100 - £7,200 |
Of course, when we know more about a specific claim it should be possible to provide a closer estimate of the final total.
(c) Undisputed & Disputed Claims above £100,000
We do not conduct any the claims of this magnitude on a fixed-fee basis; they are all dealt with in accordance with our hourly rates and you will be advised of the potential fees and disbursements upon your enquiry.
Enforcement of Judgments
Although we will advise you under Step 4 above of the different ways in which a CCJ can be enforced should the Debtor fail to pay you either the money owed plus interest or the costs awarded you by the Court, our fees for his work are not included in our fixed-fees or the estimates for the conduct of disputed claims. Such work will be charged in accordance with our hourly rates and typically will take between 2 – 6 hours to conclude with corresponding fees of £300 - £1,800 + VAT.
There will also be further disbursements arising from Court Fees ranging from approx. £90 - £150 depending upon which route of enforcement is taken and in the event the matter is transferred to the High Court charges will be levied by enforcement agencies for executing the Writs / Warrants issued by the Court. Please find below a link to the fees charged by the Sheriff’s Office, one such enforcement agency.
www.thesheriffsoffice.com/services/court-fees-enforcement-fees
Other Methods of Debt Recovery
Statutory Demands
A statutory demand is a formal request for payment of a debt exceeding £5000.00 issued by a creditor to a business or individual. It is a precursor to insolvency proceedings, serving as a clear warning that legal action may follow if the debt is not settled within a specified period, typically 21 days.
Time for preparation of the Demand: 60 – 90mins (£300 - £450 + VAT) with completion of the work within 1 – 3 days of your instructions.
The Demand must then be personally served usually by a Process Server instructed by ourselves. And can take between 7 – 14 days depending upon whether the debtor attempts to evade service.
The Process Server’s fee is usually around £350 + VAT, but is dependent upon the time required to accomplish service.
Once served the Creditor has 18 days to apply to set aside the Demand if the debt is disputed
Petition for Bankruptcy
A bankruptcy petition is an application for a bankruptcy order to be made against an individual which a creditor can present to the court on the grounds that an individual is unable to pay their debts. The minimum debt is £5000 for an individual
Time for Preparation of the Petition: 60 – 90mins (£300 - £450 + VAT) with completion of the work within 1 – 3 days of your instructions.
The Petition must then be personally served usually by a Process Server instructed by ourselves and can take between 7 – 14 days depending upon whether the debtor attempts to evade service.
The Process Server’s fee is usually around £350 + VAT, but is dependent upon the time required to accomplish service.
The Petition is also filed at Court (see Court Fees below), which will list the matter for a hearing within 2 – 3 mnths.
Petition for Winding-up a Company
A winding-up petition is a legal mechanism by which a business creditor, owed in excess of £750, starts the court process by which a compulsory is placed in liquidation.
Time for Preparation of the Petition: 60 – 90mins (£300 - £450 + VAT) with completion of the work within 1 – 3 days of your instructions.
As with a Petition for Bankruptcy it must be personally served usually by a Process Server instructed by ourselves and can take between 7 – 14 days depending upon whether the debtor attempts to evade service.
The Process Server’s fee is usually around £350 + VAT, but is dependent upon the time required to accomplish service.
The Petition is also filed at Court (see Court Fees below), which will list the matter for a hearing within 2 – 3 mnths.
Current Court Fees required on Filing Petitions
Petition for Bankruptcy: £332 (No VAT) plus a Deposit of £1500.00 to meet the Insolvency Service Fees; both payable when the Petition is filed
Petition to Wind-up a Company: £332 (No VAT) plus a Deposit of £2,600 (No VAT) to meet the Insolvency Service Fees; both payable when the Petition is filed