Our team has many years of collective experience in recovering debts, regardless of whether they are owed by individuals or businesses, or to them. This page details the services that we can offer to businesses who are seeking to recover debts up to a value of £100,000, and the typical costs, or range of costs, associated with that. In respect of such services and costs, this page includes, among other matters:
(i) the key stages or steps that are, or might be, involved which we can assist you with;
(ii) an indication of our potential legal fees;
(iii) an indication of the potential costs of disbursements; and
(iv) an indication of who will undertake the work.
In the tables below, we set out details of (i), (ii) and (iii). The information relates to any matter in respect of debts owed to business clients up to a maximum of £100,000. Where relevant, the figures include interest and costs. Debts to sole traders are subject to the Pre-Action Protocol on Debt Claims (“the Debt Protocol”)*, which is imposed by the Civil Procedure Rules 1998*. Debts to other types of business (e.g. incorporated companies or partnerships) are subject to the Pre-Action Conduct and Protocols (“the General Protocol”)*.
This is a letter that must be sent by a prospective claimant to the party which is alleged to owe a debt, requesting the payment of that, and detailing that legal action will be taken if the demand is not satisfied within a reasonable period of time.
For a basic debt matter, the following applies:
(excluding VAT) (£)
|Up to 10,000 (Small Claims)||100||0||120|
|10,001 to 25,000 (Fast Track)||100||0||120|
|25,001 to 100,000 (Multi Track)||200||0||240|
For a more complicated debt matter, the following applies:
(exclusing VAT) (£)
|Up to 10,000 (Small Claims)||320 - 640||0||384 - 768|
|10,001 to 25,500 (Fast Track)||320 - 640||0||384 - 768|
|25,001 to 100,000 (Multi Track)||320 - 1,600||0||384 - 1,920|
Following the letter of claim
There are a number of steps that might need to be taken after a pre-action letter has been sent. We set out those steps in the table below, with corresponding, relevant information. (Please note that the sums that are set out do not include, if necessary, the costs of instructing a barrister to draft any particulars of claim. If that were necessary, the costs are likely to exceed the ranges of fees that are set out. It might be necessary to instruct a barrister to draft particulars of claim in a very complex matter or if it involves (a) novel point(s) of law.)
|Stage||Our Fee (excluding VAT) (£)||Court Fee/Disbursement (£)||Total (£) (Inc. VAT)|
|To review a reply form and/or income and expenditure form received from debtor/response received to letter of claim||100 - 200||0||120 - 240|
|Letter of response to reply form providing relevant documentation requested and/any additional reasonable information requested||160 - 480||0||192 - 576|
If the steps referred to above have not resulted in the monies owed being paid, it might be necessary to take court action to recover any sums outstanding. If such action is necessary, proceedings would have to be issued. This is when the more formal step of issuing a claim form* is taken. The claim form must contain, or be accompanied by, particulars of claim*. Those documents must set out a summary of the facts of the claim against the party that owes the money.
To issue proceedings for claims up to £10,000, the following indicative costs apply, dependent on the amount of the claim:
|Debt Value (£)||Our Fee (exclusing VAT)||Court Fee/Disbursement (£)||Total (£) (Inc. VAT)|
|0 - 300||100||35||155|
|300.01 - 500||120||50||194|
|500.01 - 1,000||140||70||238|
|1,000.01 - 1,500||175||80||290|
|1,500.01 - 3,000||175||115||325|
|3,000.01 - 5,000||200||205||445|
|5,000.01 - 10,000||270||455||779|
To issue proceedings for claims from £10,000.01 to £25,000
|Debt Value (£)||
|Court Fee/Disbursement (£)||
|10,000.01 - 25,000||420 - 1,600||5% of the total amound claimed (including interest and costs)||504 - 1,920|
To issue proceedings for claims from £25,000.01 to £100,000
|Debt Value (£)||Our fee (exclusing VAT)||Court Fee/Disbursement (£)||Total (£) (Inc. VAT)|
|25,000.01 - 100,000||420 - 1,920||5% of the total amount claimed (including interest and costs)||504 - 2,304|
Applying for judgment
If a defendant fails to file an acknowledgment of service or a defence to claim within the relevant time limit, the claimant is entitled to seek judgment against the defendant. This is known as applying for “judgment in default”. The table below sets out relevant, corresponding, information, in respect of such applications.
|Type of judgment sought||
|Court Fee/Disburesement (£)||Total (£) (Inc. VAT)|
|Judgment in default of acknowledgement of service||200||0||240|
|Judgment in default of defence||200||0||240|
|Judgment in default of acknowledgment of service (over £5,000)||300||0||360|
|Judgment in default of defence (over £5,000)||300||0||360|
It is also possible to apply for judgment where the party that owes money admits what is owed. In those circumstances, it is possible for the party that owes the money to apply for “judgment on admission”. The table below sets out relevant, corresponding, information, in respect of such applications.
|Type of judgment sought||Our Fee (excluding VAT)||Court Fee/Disbursement (£)||Total (£) (Inc. VAT)|
|Judgment on admission (debtor's proposal for payment accepted)||250||0||300|
|Judgment on admission (court to decide date/time for payment)||250||0||300|
|Judgment on admission (court to decide date/time for payment) (over 5,000)||350||0||420|
|Judgment on admission (debtor's proposal for payment accepted) (over £5,000)||350||0||420|
Enforcement of judgment debts
If judgment is awarded against a party that owes a debt, and that party does not pay what it is ordered to, the party that is owed the money can seek to enforce the judgment. In the tables below, we set out the types of enforcement action that can be taken and the relevant, corresponding, information, in respect of such actions. Again, the details set out are in relation to debts owed to businesses up to £100,000.
Attachment of earnings
A court can order that a party that owes money has a part of their earnings deducted by their employer until the debt is paid.
|Our Fee (excluding VAT)||Court Fee/Disbursement (£)||Total (£) (Inc.VAT)|
High Court Enforcement
It might be possible to instruct a High Court Enforcement Officer (“HCEO”) to recover money that is owed. They can do that by either collecting money from the debtor or by seizing and selling their assets to settle the debt that is owed.
|Our Fee (excluding VAT)||Court Fee/Disbursement (£)||Total (£) (Inc. VAT)|
If enforcement via the HCEO proves unsuccessful, their abortive fee of £75 plus VAT will become payable.
Third party debt order
A court could order that any third party which holds money on behalf of a party that owes a debt pays that money directly to the party that is owed the money. A third party could be a bank where the debtor is holding money, or a party that is due to pay money to the debtor (such as an employer who is due to make a redundancy payment to the debtor or a solicitor who is due to make an inheritance payment to the debtor).
|Our fee (exclusing VAT)||Court Fee/Disbursement (£)||Total (£) (Inc.VAT)|
In respect of applying for an attachment of earnings order or a third party debt order, or instructing a HCEO, if any dialogue/negotiation with the debtor or any relevant third party is necessary, then any such work will be charged at our hourly rates. The time incurred will be dependent on how the matter progresses.
A charging order is another means that the party who is owed money can seek to enforce a judgment for that debt. A charging order secures the debt against the debtor’s home or other property which could result in an order that the relevant home or property is sold, with the proceeds of sale being used to pay what is owed. Details in respect of the possible stages involved in applying for a charging order, and the corresponding costs, are set out in the table below:
|Stage||Our Fee (excluding VAT)||Court Fee/Disbursement (£)||Total (£) (Inc.VAT)|
|Making an application for a straightforward charging order* that does not involve any third party having, claiming, or attempting to claim, an interest in and/or rights of occupation in the property||600||
100 Court fee
£3 (plus VAT) for each Land Registry search
|820.60 (assuming only one Land Registry search is required)|
|Registering an interim charging order*||20||20 (Land Registry fee)||44|
|Instructing an agent* to attend a final charing order hearing plus the agent's fees for attending the hearing.||400||250 - 750 (plus VAT)||780 - 1,380|
|Registering the final charging order* (if it is made at the hearing).||20||20 (Land Registry fee)||44|
If the application for a charging order becomes anything other than straightforward, any work that we undertake will be charged at our hourly rates.
In terms of registering a final order, if the matter is defended or it is necessary to engage in dialogue with the debtor, then any work that we undertake will be charged at our hourly rates. The time incurred will be dependent on how the matter progresses. In addition, a hearing that is defended would also attract a higher agent’s fee for attendance and the time spent at the hearing.
What do our fees include?
Our fees include:
- Taking your instructions and reviewing documentation
- Receiving payment and sending onto you. There may, however, be an appropriate CHAPS fee to pay in respect of an immediate electronic payment.
- Providing you with advice on next steps and likely costs, if payment is not received within any relevant timescale (please see below)
Any businesses wishing to proceed with a debt recovery claim should note that interest and compensation may take the debt into a higher banding, with a higher cost.
Who will undertake the work?
The majority of the debt recovery work that we undertake for clients is carried out by Lisa Stephenson who may be assisted by a solicitor or trainee solicitor. Whoever undertakes the work, they will always be supervised by either James Henson, partner, or Elizabeth Turner, senior associate.
How long will a debt recovery matter take?
It is not possible to be precise about how long a debt recovery matter might take. In our experience, it will usually take between 14 and 30 days from sending an initial letter of claim to receipt of a response or payment from the other side. The General Protocol requires a letter of claim sent to a debtor to allow a “reasonable” period of time for a response and/or payment, which is usually about 14 days from the date of the letter of claim. Under the Debt Protocol, a minimum period of 30 days must be allowed for a response to the letter of claim.
If information is requested by the debtor then, subject to the type of information requested, it should be provided. If court proceedings are necessary then a debtor has 14 days to acknowledge receipt of the court papers and a further 14 days thereafter to file a defence or pay the debt/make proposals to pay.
What if a debtor disputes or defends a claim for a debt?
If a debtor disputes or defends a claim for a debt, it ceases to be a debt recovery claim and would have to be dealt with by our commercial disputes team. In such circumstances, our normal hourly rates would apply. As such, the cost would be determined by the amount of time spent on dealing with the matter and the relevant hourly rates.
Disputed/defended claims for debts usually arise as a result of disputed issues of fact, often around the ‘quality’ of the goods or services provided to the debtor. They can often be quite complex and sometimes require expert evidence or the assistance of a barrister. More often than not, they will include a counterclaim which a debtor raises as a ‘set off’* to the debt being claimed. A disputed/defended debt claim is subject to a much more involved and extensive legal process at higher cost and expense to determine its outcome and we would discuss this with you were the situation to arise and were the claim to move out of the debt recovery category.
What are our hourly rates?
Our hourly rates are set out below:
|Partner||£220.00 plus VAT|
|Senior Associate||£185.00 plus VAT|
|Solicitor||£130 to £180 plus VAT|
|Trainee Solicitor||£105.00 plus VAT|
|Paralegal||£100.00 plus VAT|
|Acknowledgment of service||an acknowledgment of receipt by a defendant of a claim form which is sent to the court|
|Agent||someone who is appointed as our representative to attend at court|
|Civil Procedure Rules 1998||sets out the rules for cases (such as debt recovery) brought in the civil courts after 26 April 1999|
|Charging order||a court order which secures the debt against the debtor’s home or other property that they own|
|Claimant||the party bringing a claim|
|Claim form||the document which sets out the brief details of the case of the claimant (i.e. the party which is owed the debt); the claim form might include particulars of claim* or they might be provided at a later date|
in certain circumstances, a business that is owed a debt can claim compensation which is in addition to the debt, and interest, that is owed
|Counterclaim||a claim made by a defendant against a claimant in response to the claimant’s claim which is included in the same proceedings as the claimant’s claim|
|Creditor||the party to who/which money is owed|
|Debtor||a business or person that owes another party, money|
|Defendant||the party against which/whom a claim is brought|
|Final charing order||an order made by the court which makes an interim charging order, final|
|Income and expenditure form||a form that is completed by a debtor (in response to a Debt Protocol letter of claim) who is making an offer of repayment and which sets out details of their income and expenditure|
|Interim charing order||this is granted to stop a debtor* from selling their home or other property before the final charging order* can be made|
|Interest||the interest that can be claimed for the late payment of a debt owed to a business is determined by what is stated in any relevant contract; if there is nothing in the contract, interest can be claimed at either 8% or 8% above the Bank of England Base Rate (dependent on the relevant statutory interest rate claimed)|
|Issuing proceedings||the formal process of starting court proceedings which includes filing the claim form* and particulars of claim*|
|Judgment in default of acknowledgment of service||
judgment which is awarded to the claimant where the debtor (i.e. the defendant) has not sent to Court an acknowledgment of service* of a defence to a claim (or any part of the claim) and the relevant time for doing so has expired
|Judgment in default of defence||judgment which is awarded to the claimant where the debtor (i.e. the defendant) has failed to file their defence and the relevant time for doing so has expired|
|Judgment on admission||judgment which is awarded to the claimant where the debtor (i.e. the defendant) has admitted that all (or part) of the money claimed, is owed by them|
|Letter of response to the reply form||the response that the claimant must provide to the reply form|
|Particulars of claim||the document which sets out the case of the claimant and specifying the facts relied upon|
|Pre-Action Conduct and Protocols||explains the conduct and sets out the steps that the court would normally expect parties to take before commencing proceedings for particular types of claims|
|Pre-Action Protocol on Debt Claims||this will apply if a business (or individual) considers that they are owed money and is considering starting court action to recover it; it describes the way that the parties are expected to behave and the actions that they should take before a court claim for the payment of the debt is started|
|Registering an interim charging order||
the process by which Her Majesty’s Land Registry is notified that an interim charging order has been made against a debtor’s property; the property cannot be sold without the relevant creditor knowing about it
|Reply form||the form which a debtor must complete (in response to the Debt Protocol letter sent to them).; Amongst other matters, the form asks the debtor whether they agree that the debt is owed and whether they intend to repay it|
|Set off||the right of a debtor to reduce the debt by monies owed to them by the creditor|