Information about our Debt Recovery service

If you have an unpaid debt you have, most probably, attempted to recover the funds from the debtor. If you haven’t sent a formal pre-action letter of claim then that would be the first step we would take for you. This is a good way to try and resolve the issue at an early stage.

Our fixed fees for an initial telephone discussion, reviewing relevant papers and preparing a pre-action letter of claim are as follows:

Debt Recovery Pre-Action letter

Level of Debt	Fixed Fees
£1,000.01 – £5,000	£150 + £30 VAT = total of £180
£5,000.01 – £10,000	£350 + £70 VAT = total of £420
£10,000.01 – £25,000	£750 + £150 VAT = total of £900 (to include meeting and individual advice before preparing the letter)
£25,000.01 – £50,000	£950 + £180 VAT = total of £1,080 (to include meeting and individual advice before preparing the letter)
£50,000.01 – £100,000	£1250 + £250 VAT = total of £1,500 (to include meeting and individual advice before preparing the letter)
£100,000.01 +	Please contact us for a bespoke quote

 

The above costs are based on the debt being straightforward, that is made up of sums from one invoice. If there are multiple reasons for the debt then we would need to spend more time reviewing the legal position and preparing your letter of claim. In those circumstances we will calculate the fees based on the solicitor’s hourly rate of £250 plus £50 VAT per hour.

For bulk instructions we will discuss bespoke fees with you that are tailored to your requirements.

What is involved and how long does it take?

Depending on the circumstances of the case we may need to give up to 28 days to allow a response to the claim. Further exchanges may follow. If the debtor pays within a further 14 days then your matter will take approximately 8 to 12 weeks to complete.

However, if there is no response to the letter of claim or the matter cannot be resolved quickly, the next step is to issue a claim in Court. Thereafter the Court issues a timetable to trial following which disclosure of relevant documents and evidence is required before a trial. When claims are disputed like this, it can lead to more costs depending on how long the dispute takes to resolve.

Court Claims

If no response is received to a letter of claim then Court action will likely be the next step.

The costs set out in the table below relate to a straightforward debt claim such as an unpaid invoice which is not disputed and where enforcement action is not needed.

We do not deal with Court claims for debts of less than £1,000 due to the potential costs of court action.

The fixed fees below include the following:

• Preparing and issuing the claim in the County Court;
• Applying to the court to enter judgement in default if no acknowledgment of service or defence is received; and
• Sending a letter to the debtor to chase payment once judgment has been entered by the court

Debt value	Court fee (no VAT payable)	Our fixed fee	Total
£1,000.01 to £5,000	£80 – £205 (dependent on value of debt)	£450 plus £90 VAT	£530-655 (depending on value of debt)
£5,000.01 – £10,000	£455	£750 plus £150 VAT	£1,355
£10,000.01 – £25,000	5% value of the claim	£1,250 plus £250 VAT	£2,000 – £2,750 (depending on value of debt, price to be confirmed following a meeting)
£25,000.01 – £50,000	5% value of the claim	£1,750 plus £350 VAT	£3,350 – £4,600 (depending on value of debt, price to be confirmed following a meeting)
£50,001 – £100,000	5% value of the claim	£2,000 plus £400 VAT	£4,900 – £7,400 (depending on value of debt, price to be confirmed following a meeting)
£100,000.01 – £200,000	5% of the value of the claim	Please contact us for a bespoke quote.	Please contact us for a bespoke quote.

 

The fees above do not include:

• The costs quoted above are not for defended cases. If the debtor defends your claim, we will talk through the various stages and the costs involved. If your claim is defended, then we talk through next stages that the dispute could follow. It wouldn’t be unusual for a defended case to involve 50 hours work which at our hourly rate of £250 plus £50 VAT would total £12,500 plus £2,500 VAT (overall total of £15,000) in addition to disbursements. Some debt recovery disputes may take even more work to eventually reach a court judgment. If the case becomes disputed, we will discuss the fees with you in advance.
• The costs quoted above do not include where enforcement action is needed to collect your debt. There are various options to enforce judgment and recover debt depending on the circumstances. If enforcement becomes necessary, we will discuss the process and costs with you.

In addition to the mandatory Court fees you may be required to pay other disbursements as outlined below.  We will talk to you about likely disbursements before you incur these costs and once we know more about your case:

• Barrister’s fees vary depending on the seniority and expertise of the barrister.
• Bailiffs and High Court Enforcement Officers for enforcing judgment in your favour (costs normally vary between £120 plus £24 VAT and £180 plus £36 VAT).
• Occasionally tracing agents and process servers need to be used and their costs normally range from £150 plus £30 VAT to £250 + £50 VAT.

 

How long will it take?

The timescale largely depends on the timetable set by the court, the debtor’s willingness to settle your claim and if enforcement action is required.

Some disputed matters can take in the region of 2-3 years to conclude although 6 months is more usual.

 

Anyone wishing to proceed with a Court claim should note that:

• Interest and compensation may take the debt into a higher Court banding, leading to a higher Court issue fee.
• The VAT on our fees cannot always be recovered from the debtor – this will depend on their VAT status.