Our Debt Recovery team has substantial experience in debt recovery and dispute resolution. We set out information below on our fees for debt recovery, for debts of up to £100,000. Every case is different is different and it is difficult to accurately predict the exact level of fees in all cases. However, we set out below our estimated fees.

Our fees

We set out some information below regarding our fees. Most cases will require the following:

• Liaising with you and taking your instructions on the matter, including:
• Reviewing the debtor’s legal liability to pay you the debt;
• Discussing the debtor’s financial circumstances and their ability to pay the debt;
• Writing a letter before claim to the debtor, demanding payment in compliance with the relevant court protocols;
• Administering payment of the debt or, if the debtor does not pay, starting court proceedings;
• If the debtor does not respond to the court claim, applying for judgment;
• Once a judgment is obtained, demanding the debtor pay the judgment debt;
• Discussing enforcement options, if the debtor does not pay the judgment (and the likely costs of such actions).

We will confirm the hourly rates of the staff who are likely to be working on your matter at the beginning of our instruction. Those rates will range, depending on which members of our team are involved, from £175 (plus VAT of £35) = £210, to, £300 (plus VAT of £60) = £360 per hour.

Legal fees

We cannot accurately predict what our fees will be in any particular dispute, as each case is different. However, based on our experience of these issues, our fees for dealing with the issues we set out above is likely to be:

These costs apply where your claim is in relation to an unpaid invoice which is not disputed and enforcement action is not needed. If the other party disputes your claim at any point, we will discuss any further work required and provide you with revised advice about costs if necessary, which could be on a fixed fee (e.g. if a one off letter is required), or an hourly rate if more extensive work is needed.

Anyone wishing to proceed with a claim should note that:

• The VAT element of our fee cannot be reclaimed from your debtor.
• VAT is charged at 20%.
• Interest and compensation may take the debt into a higher banding, with a higher cost.
• The costs quoted above are not for matters where enforcement action, such as the bailiff, is need to collect your debt.

In our experience, the following factors may increase the complexity of a claim:

• A debtor avoiding service of a claim;
• Complicated legal or factual issues;
• Inconsistent or conflicting accounts of events;
• Multiple parties;
• Fraud or dishonesty;
• A debtor becoming legally represented; and
• Higher value debt.

Those cases which are less complex typically include some of the following:

• Debtors that can be served, but who do not respond to a claim;
• Clients already being familiar with the debt recovery process; and
• Simple factual matters.

Additional fees

It is important you understand that our fees are not the only relevant costs which you will have to pay. Depending on how your matter progresses, you may also have to pay some or all of the following:

• The fees of a tracing agent or process server to locate debtors (from £100 + VAT (£20) = £120 and more for high value cases.
• The fees of a process server to serve the claim on the debtor  £100 +VAT (£20) = £120 to £200 +VAT (£40) = £240
• Court fees – you will need to pay a court fee to start a claim. Court fees generally do not incurr VAT.  This will be calculated in accordance with the size of the debt you are claiming and will range from £35 (for unpaid debts not exceeding £300) to £5,000 (where the unpaid debt is £100,000). There may be other fees to pay during the court process, details of which can be found here [link to court fees page] .
• Counsel’s to attend a hearing at court. As with our fees, these depend on the complexity of the case, the size of the debt and the nature of the hearing. For a trial, Counsel’s fees could range from £1,000 +VAT (£200) = £1,200 to more than £10,000 +VAT (£2,000) = £12,000. An average fee would be £2,000 +VAT (£400) = £2,400
• Other charges from third parties, such as Land Registry fees to obtain documents, or fees charged by Companies House.

What is not included

The fees we refer to above relate to undisputed debts. If a debt is disputed at any stage, it is likely to increase the complexity of the matter and result in further work at additional cost. We will discuss those issues, and costs, with you if those circumstances arise. The fees set out do not include costs for any enforcement process, once a judgement is obtained.

VAT

We will add VAT to our fees at the rate in force at the date of our invoices (at the current rate of 20%). Where we refer to fees on this page, we intend to refer to VAT exclusive fees and VAT should be added to them, where possible we have given in indication of the VAT costs. We will also charge you VAT on most third party expenses we incur, but not all of them. For example, there is currently no VAT payable on court fees, but there is on the fees of a barrister.

Timing

The timescale for dealing with any dispute will vary depending on the factors as set out. In some cases, a compliant debtor may pay up within a matter of days or weeks. In other cases, particularly if a contested trial is necessary, the process can take many months and sometimes more than 1 year, especially if the court system is especially slow. Our experience is that on average those debts that are dealt with before the need to start court proceedings take less than 6-8 weeks to resolve. Those that require court proceedings take on average around 6-8 months to complete.

Pre-Action Protocol for Debt Claims

This was created in 2017 to set out how a business should deal with recovering a debt from an individual before issuing court proceedings.  The aim of the Protocol is to encourage early engagement between the parties and potentially resolve the dispute without the need to start court proceedings, including considering Alternative Dispute Resolution (ADR). 

Click here to access the Protocol [link to Pre-action Protocol for Debt Claims]  

Our team

Debt recovery work is supervised by Louise Elliott who is Head of the Dispute Resolution and Employment.  Louise is supported by other members of our team and when you instruct us we will confirm the work we expect to undertake, and who will work on your matter.

Our Team for more information about our team, their qualifications and experience.