The recovery of a debt can be straightforward but that is not always the case, particularly if there is for example, a need to trace the debtor to begin with. Enforcement in either the High Court or the County Court of Judgments depends very much upon whether the Defendant has the ability to pay the Judgment that has been made against them.
Our costs are based on an hourly rate unless we agree a fixed fee with you. That fixed fee may include specific fees for specific elements of the debt recovery. It is important to appreciate that even when Judgment has been obtained, it may be only the start of a fairly long process of seeking to enforce the Judgment, and we are happy to give you at the appropriate time fixed fees for taking that process forward, if it is necessary.
The Pre Action Protocol for debt claims applies to all businesses (including sole traders and public bodies) which are trying to recover a debt from an individual (including a sole trader). This Protocol does not apply to busines-to-business debts where you are seeking to recover monies from a company or a limited liability partnership, or the matter is covered by another pre-action Protocol, such as construction, engineering or mortgage arrears.
If you are attempting to recover arrears of rent for a property (commercial or residential) then this procedure does not apply.
To start a debt recovery for a business-to-business debt , we can send a Letter of Claim to the debtor requesting payment within seven days. The “Letter of Claim” claims your basic debt together with interest, and your reasonable debt collection costs under the Late Payment of Commercial Debts (Interest) Act 1998. Depending upon the level of debt involved, our charge will be between £150 and £200 with VAT at 20%.
For recovering a debt if you are an individual or a sole trader, we can send the “Letter before Action” requesting payment within seven days. The Letter before Action claims your debt together with interest, and our costs of between £150 and £200 with VAT at 20%.
For more complex commercial recovery, we will provide you with a specific estimate of the costs that would be involved.
If the Protocol applies, then the requirements are more onerous and we can discuss these (and costs) with you at the time of instruction.
For a straightforward non-Protocol claim, if the debtor does not settle the debt within a seven day period, we can issue Court proceedings. This includes preparing and filing a Claim Form together with full Particulars of Claim at Court.
Our cost for issuing the claim will range between £75 and £350 together with VAT at 20%.
In the case of more complex debts, we will provide you with an estimate for an appropriate fixed fee.
For all debts, Court fees apply as set out in the table below:-
|£25 – £300||
|£300 – £500||
|£500 – £1,000||
|£1,000 – £1,500||
|£1,500 – £3,000||
|£3,000 – £5,000||
|£5,000 – £10,000||
|£10,000 – £200,000||
5% of claim (including interest)
It should be noted that the Court calculates an issue fee based upon the total value of the debt together with any interest claimed. The inclusion of interest may possibly push the fee into a higher bracket.
Where a Claim is undefended, we will apply for Judgment in default. This means you will have a Court Order which can then be enforced. Our charge for applying for Judgment in default is £30 together with VAT at 20%.
Depending upon the nature of the Defence from your debtor, we will need to provide you with a full Case Plan, details of the costs that you are likely to incur for the contested case. We will always reserve the right to review that estimate of costs as the case develops. )
The final stage of the debt recovery procedure is to enforce your Judgment. Depending upon the value of your Claim, we would need to instruct either a County Court Bailiff or a High Court Enforcement Officer. In the case of a Bailiff, we would recommend this for debts between £25 and £5,000. The enforcement fee for recovery of money is £77 and £121 for recovery of goods. If however a decision is made to instruct a High Court Enforcement Officer, which can be for any Judgment in excess of £600, there is an enforcement fee of £66. If however the High Court Enforcement Officer’s attempts to recover the debt against the assets of the debtor are unsuccessful, they can charge an abortive fee of £75 plus VAT. Our charges for applications as above are £100 together with VAT at 20%.
If it proves to be impossible to recover your debt either through enforcement by a County Court Bailiff or High Court Enforcement Officer, then it may be necessary to consider other steps of enforcement against the debtor. This can include applying for a Questioning of the debtor in the County Court where they live, or in the case of an Officer of a defaulting company, in their home County Court. Consideration may need to be given of seeking to secure the debt by way of a Charging Order against the debtor’s property. In extreme cases, it may be necessary to consider the possibilities of taking steps for bankruptcy in relation to the debtor which is initiated by service of a Statutory Demand and then the issue of a Bankruptcy Petition. In relation to all additional enforcement steps, we are happy to provide you with a fixed fee together with the disbursements that are likely to be incurred.
Our Debt Recovery Team consists of Sarah Nineham, an Associate Solicitor, who has considerable experience in this field together with Michael Stocken, Solicitor and Senior Partner.