Debt recovery

There is an enormous difference between an unpaid invoice and a bad debt. Invoices may remain unpaid for various reasons, and these are outstanding debts which many businesses have to try to navigate.

If outstanding debts are not addressed promptly, they may become uncollectable, affecting business cashflow and profits. Critical to recovering debt is ensuring that it is done cost effectively, efficiently, successfully and at a price proportionate to its value. This is, fundamentally, our approach to debt recovery.

We understand that businesses have different types of debt collection needs, and we have therefore developed different services to offer you the most appropriate way to recover debt:

Our expertise

Pricing Transparency

Our charges

We offer a wide range of fee arrangements for our debt recovery services, which depend upon the profile of the debts you wish to instruct us to collect, and in particular the complexity and nature of the debts (for example unpaid invoices or default under loan agreements and personal or corporate guarantees, and/or whether any counterclaim is anticipated), the number of potential defendants, the number of invoices or debts within each claim, the previous collections history and the likely volume of instructions.  Please contact Shannon Leering or Gemma Baker to discuss the options we may be able offer to suit your particular circumstances.

The charges set out below relate to our typical charges for low volume debt recovery instructions for a debt of up to £100,000 against a single debtor in England or Wales where there is no counterclaim. These charges are made up of:

1. our fees for the legal work; and
2. ‘disbursements’ - disbursements are costs related to your matter that are payable to other people, such as court fees or fees for bailiffs. We handle the payment of the disbursements on your behalf to ensure a smoother process.

Where VAT is referred to below please note that this will be charged at the applicable rate, which is currently 20%.

Our fees

In debt recovery work, the legal fees often vary depending upon how much work we need to do to recover the debt. We therefore usually to charge fees for each stage of the recovery process and only charge clients for the parts they need.

Where we refer to charges based on our hourly rates, these depend upon the seniority of the lawyer and range from £150 (for unqualified staff) to £350 (for a partner or equivalent) plus VAT.

1) Letter before action

A Letter Before Action (LBA) is a letter which formally demands payment from the person who owes you money (the Debtor). This is the first step for any debt recovery process before starting court proceedings. This stage normally takes up to 7 days for us issue the LBA depending upon the nature of the debt.  The LBA will usually demand payment in 30 days if the Debtor is an individual or 7 days in other cases (in accordance with the relevant Court rules).

We charge for this work on the basis of our hourly rates plus VAT. There are not usually disbursements for this stage.

Indicative fees for this stage based hourly rates range from £750 to £1,750 (plus VAT) and includes:

• Undertaking appropriate searches;
• In claims for more than £10,000, a preliminary review of the case;
• Sending the LBA; and
• Receiving payment and sending onto you, where applicable.

Some cases may be more complicated and require us to charge on a different basis and may take longer than usual. Contact us for a fee proposal tailored to your circumstances.  

If the Debtor responds, disputing the claim or seeking to negotiate a settlement, it may be necessary to engage in additional correspondence which will be charged on our hourly rates plus VAT, but we will provide an estimate as to the likely costs, depending upon the response received from the Debtor.

2) Issue Court Proceedings

If the debt has not been paid following the LBA, we will draft and issue court proceedings on your behalf. Our typical fees for issuing a court claim are below:

Court fees do not have VAT.

The sums shown as Fixed Recoverable Fees and the Court fees will be added to the claim and potentially recoverable from the Debtor in addition to the debt and applicable interest. 

This stage normally takes up to 7 days for us to send the papers to the Court to be issued.  Depending upon the nature of the debt, the Court usually takes between 1 and 6 weeks to issue and serve the proceedings. Once served, the Debtor will have 14 to 28 days to respond to the proceedings.

Some cases may be more complicated and require us to charge on a different basis and may take longer than usual. Contact us for a fee proposal tailored to your circumstances.

3) Enter Judgment

If there is no response, we may be able apply to the Court to ‘obtain Judgment in Default’ for you. This means you would have a court order which you can enforce to reclaim your money from the Debtor. Our fees for this stage would be:

The sums shown as Fixed Recoverable Fees will be added to the claim and potentially recoverable from the Debtor in addition to the debt and applicable interest, and other fixed recoverable costs. 

There are not usually any disbursements at this stage.

If we are successful in obtaining judgment for you but payment is still not received then we will advise you on the next steps at that time, such as enforcement action and what the likely costs would be (see below).

This stage normally takes 2 working days for us to request judgment. The Court usually takes 1 to 6 weeks to enter judgment depending upon the nature of the debt.

Some cases may be more complicated and require us to charge on a different basis and may take longer than usual. Contact us for a fee proposal tailored to your circumstances.  

4) Defended/disputed claims and more complex cases

If a Debtor submits a defence to your claim or the case is otherwise more complicated, we will normally charge you an hourly rate for the time which we spend on your case. The hourly rate depends upon the experience of the fee earner handling the matter:

Timescales for defended and more complex cases are more difficult to predict. Sometimes matters can be resolved within a matter of weeks but others can take much longer. Contact us for more tailored guidance on your circumstances.

Disbursements

You will need to pay for Disbursements in addition to our costs as described above. In a debt recovery matter the most common disbursement is the Court fee and the cost for these are listed above.

If we need to go to a Court hearing then a barrister (sometimes called ‘Counsel’) is often used to deal with the hearing. This is not common in undisputed debt recovery work. Barrister’s fees tend to be in the region of £750 to £3,000 per day plus VAT. We will however guide you on this as and when such costs need to be incurred. 

Other costs to consider

The costs set out above do not include enforcement action such as for bailiffs to go out and collect the debt on your behalf.

Key stages of your case

The costs described above cover all of the work in relation to the following key stages a debt recovery process:

• Discussing your case with you and, where appropriate, reviewing documents you provide;
• Performing relevant checks and searches;
• Sending a letter before action (see above);
• Receiving payment and forwarding payment to you or, if a debt is not paid, drafting and issuing court proceedings;
• If no response is received, applying to the Court for Judgment in Default, subject to the additional costs for doing so as detailed above being paid;
• If Judgment in Default is received, writing to the Debtor to demand payment; and
• If payment is still not received within the specified timescale, providing you with guidance on the next steps and likely costs.

It would not normally be necessary to undertake other work or incur costs other than those described above. However, we would be very happy to provide you with a more tailored quote for all stages of your particular case once we know about your specific circumstances.

How long will my case take?

Please see time estimates above for the timescales in each stage of the process.

In terms of the overall time the debt recovery will take, if a debt is not disputed, we find that it typically takes up to 20 weeks (in the case of an individual Debtor) or up to 16 weeks (in any other case) from sending the LBA (see above) to receive a Judgment in Default.  A debtor with sufficient funds to do so will very often pay upon being sent the Judgment in Default and so matters can quickly be resolved after obtaining a Judgment in Default (within about 2 to 4 weeks after the receiving the Judgment).

If the debt is disputed, defended or enforcement action is required, the matter will ordinarily take longer than this to resolve and involve additional costs which will be discussed with you in advance.

Who will be dealing with my case?

Your case will be handled by a trusted member of our experienced team. We have a number of qualified lawyers in the team as well as experienced paralegals specialised in this area of law. Once we know who will be handling your case for you we will introduce you to them and provide you with full details of their background and qualifications. Full details of the experience and qualifications of our team are available on our website including the types of work normally undertaken.  

Regardless of who is working on your case the matter will be supervised by one of our partners. For routine low volume debt recovery work, this will usually be Iain Colville (solicitor with over 20 years’ experience dealing with disputes), Gemma Carson (solicitor partner with over 20 years’ experience dealing with disputes) or Gemma Baker (non-lawyer partner).