DEBT RECOVERY

These costs apply where the claim is in relation to a single, unpaid, business invoice which is not disputed of up to £100,000. Our charges are calculated based on hourly rates, plus disbursements. Disbursements are payments which we make to third parties arising in the course of providing our services. VAT is charged at the prevailing rate, currently 20%, on our hourly rates and some disbursements. For recovery of a straightforward, undisputed debt the only likely disbursement you will incur is a court fee (no VAT chargeable), payable at Stage 2 of the debt recovery process (see below).

STAGE 1 – LETTER OF CLAIM

This involves sending a Letter of Claim to the debtor requesting payment of the debt, plus interest and other charges (if applicable). The timescale (provided the debtor pays promptly) is likely to be in the region of 2 – 3 weeks from our receipt of your instructions to receipt of payment. The likely fee for Stage 1 is £1125 to £1500 plus VAT (at 20%) and disbursements.

The fee estimate for Stage 1 includes:

Taking your instructions and reviewing documents
Basic investigation/confirmation of the correct identity and address of the debtor.
Sending a Letter Before Action.
Receiving payment (or any other response) and sending on to you.

STAGE 2 – ISSUE A COURT CLAIM

Following a Letter of Claim, if payment is not made, the next stage is to initiate court proceedings against the debtor. The debtor has set time limits to respond to the claim and, if they fail do so, a request can be made for Judgment to be entered against the debtor in default. The timescale for initiating a claim up to the point of obtaining default judgment will depend largely on the speed in which the court processes the claim and any request for Judgment. Usually this process will be in the region of 4 – 6 weeks from our receipt of your instructions to start the claim. Once default Judgment is obtained, sending a letter to the debtor requesting payment to avoid enforcement action. The likely fee for Stage 2 is £750 to £1500 plus VAT (at 20%) and disbursements. The table below sets out the appropriate fee payable to the court.

Value of your Claim
Court Issue Fee (No VAT chargeable)


Up to £300
£35

£300.01 to £500
£50

£500.01 to £1,000
£70

£1,000.01 to £1,500
£80

£1,500.01 to £3,000
£115

£3,000.01 to £5,000
£205

£5,000.01 to £10,000
£455

£10,000.01 to £200,000
5% of the value of the Claim

More than £200,000
£10,000

Court issue fees are correct at the time of publishing this note, but are subject to change. Please go to the following link to ascertain the current court issue fee applicable: https://www.gov.uk/court-fees-what-they-are.

Anyone wishing to proceed with a claim should note that:

The VAT element of our fee cannot be reclaimed from your debtor if you are already registered for VAT.
Interest and compensation may take the debt into a higher banding, with a higher cost.
The costs indicated above are not for matters where enforcement action, such as bailiffs, is needed to collect your debt.
Costs you incur may exceed the costs, if any, awarded in your favour. You may not be able to recover any costs from the debtor.

The fee estimate for Stage 2 includes:

Taking your instructions and reviewing documentation.
Basic investigation/confirmation of the correct identity and address of the debtor.
Drafting court papers, sending them to court for issuing, arranging for service of the papers on the debtor (if applicable), all in accordance with the Civil Procedure Rules.
Where no Acknowledgment of Service, or Defence, is received within the relevant time limits, then applying to the Court to enter Judgment in default.
When Default Judgment is obtained, writing one letter to the debtor explaining that unless payment is made, enforcement action will follow.
Keeping you updated throughout.
Receiving payment (or any other response) and sending on to you.
If payment is not received within 1 – 2 weeks after the post-judgment letter, then giving you basic advice on the available next steps and the likely costs involved.

WHAT IS NOT INCLUDED

The above fee estimates for Stages 1 and 2 exclude any other steps, or work, not mentioned above. For example, they do not include:

Any enforcement action that may be needed where a Judgment is obtained but the debtor still does not pay, ie. even after Stage 2 is exhausted. This might involve instructing the Court Bailiff or a range of other possible enforcement options.
Any additional work required because the debt is not straightforward or involves complex issues.

FEES WHERE THE DEBT IS NOT STRAIGHTFORWARD OR INVOLVES MORE COMPLEX ISSUES

If the debt is not straightforward, or involves issues making it more complex, our fees will be higher than the above estimates. We will identify them at the outset where possible although they may not be apparent until some point during the above processes. In these cases, we will discuss any further work required and provide you with a revised estimate of fees as necessary. These additional costs will be based on our hourly rates.

Examples of issues where the debt is not straightforward or involves more complexity, include:

There are extensive documents relating to the debt, for example, a large contract that has to be considered, or the paperwork/information you provide to us is incomplete, unclear or not in order.
Difficulties identifying or locating the correct debtor.
The debtor responds to the Letter of Claim raising unforeseen issues, which require further investigation and/or advice and/or further pre-action correspondence.
The debtor asks for time to pay and/or we are required to negotiate a payment plan.
The debtor disputes the debt for any reason, or makes a counterclaim.
The debtor does not follow the correct process or protocol.
Procedural issues arise which require additional investigation, communications or an application to the court.
There are any insolvency issues, for example, we have to investigate and/or advise you on the debtor’s ability to pay.
Any limitation (legal time limit) issues.
There is a foreign element, for example, the debtor is based abroad or the debt is based on a contract governed by a different country’s law or jurisdiction.