PRICES AND SERVICE INFORMATION – DEBT RECOVERY OF UP TO £100K
We understand that the estimated costs of debt recovery can be one of the most significant factors to consider when deciding whether or not to pursue a claim. The very nature of litigation makes it difficult to know how a matter will proceed and, therefore, the likely costs to be incurred.
We hope that our explanation of the process and of our charging structure will assist you in deciding whether or not to bring your claim.
How will you calculate your fees?
Our debt recovery work is conducted by a litigation executive whose hourly rate is £185 plus VAT.
Our fees are charged in units of 6 minutes and by reference to time spent on your matter. This includes time spent:
Reading, drafting and working on documents;
Considering, and responding to, incoming emails and letters;
Attending you or third parties on the telephone and drafting an attendance note;
Preparation and attendance at meetings as well as drafting meeting attendance notes; and
Travelling to and from the office, for example, to attend meetings or court.
A breakdown of fees incurred on your matter is always available on request.
How much will it cost?
Stage 1: Letter before Action: Our fees for reviewing the paperwork, providing you with initial advice and drafting the Letter before Action are usually no more than £370 plus VAT (equivalent to two hours of time).
Stage 2: Issuing Proceedings: Our fees for issuing proceedings and successfully obtaining Judgment in Default are usually in the region of £600-£750 plus VAT. This is on the assumption that the matter remains straightforward and undefended.
In the event that a defence is filed or the matter otherwise becomes contentious, then our fees will exceed the estimates which we have provided. Likewise, if it becomes necessary to carry out additional work on your behalf, such as entering into further correspondence with your opponent, then our fees will also increase. We will provide you with a revised estimate of costs as soon as this appears to be the case.
The estimates above do not include any advice or work carried out in relation to enforcement action. There are various methods of enforcement but not all of them will be appropriate in each case. We will, therefore, need to advise you on this aspect nearer the time and in the event that enforcement action becomes necessary.
We will always advise you on the likely fees at each stage and keep you regularly updated as the matter progresses.
Likely additional expenses
Throughout your matter, it may become necessary to incur various expenses (disbursements), for example, in relation to court fees and counsel’s fees.
A non-refundable court fee will be payable on the issue of proceedings. The amount payable is determined by the value of the debt and on whether proceedings are issued through the court or using the court’s ‘Money Claims Online’ service.
Further disbursements may become payable at a later stage (for example, in the event that the matter becomes contested) and may have to be incurred at short notice due to certain time limits.
We will always ensure that you are regularly updated.
Can I recover my legal costs from my opponent?
Litigation can become very expensive, particularly where the matter becomes contested, and it is very unusual for a party to recover all of the costs incurred. The general rule is that, if your claim is successful, you may be entitled to recover some of your costs from your opponent. Conversely, you may be required to pay some of your opponent’s costs in the event that your claim is unsuccessful.
In particular, where your claim is a ‘Small Claim’ (i.e. if the total value of your claim is no more than £10,000), you will not be able to recover any of your costs from your opponent, with the exception of fixed costs (such as the court issue fee), even if your claim is successful. The same would also be the case for your opponent who, even if they are successful, would be unlikely to recover over and above their fixed costs from you.
There is a risk that the costs of litigation may become disproportionate to the sums which you are seeking to recover and that the claim may become uneconomical to pursue. You should always bear in mind that there is no guarantee that you will recover any costs at all and that you will, therefore, be responsible for any shortfall.
We will always highlight the costs risks to you at the outset of any matter and will ensure that you are kept fully updated throughout.
How long will it take to recover the sums owing to me?
Stage 1: Letter before Action: The Letter before Action will allow your debtor between 21-30 days to make payment in full or provide a satisfactory proposal for payment. In the event that your debtor does not respond or make payment, we will take your instructions as to whether you wish to issue proceedings.
Stage 2: Issuing Proceedings: Once the proceedings have been issued and served on your debtor, the debtor will have 14 days to respond. This timescale can be extended to 28 days where the debtor files an acknowledgment of service.
In the event that a response or payment is still not received, we will ask the court to order Judgment in Default. If the court considers that you are entitled to Judgment in Default, the court will order the debtor to make payment and send a copy of the order made to the parties.
The process will take longer in the event that a defence is filed, although it is difficult to predict how long this will be because no two cases are the same. The court estimates that claims for £10,000 or less will usually last less than six months and that claims worth over £10,000 (which are often more complicated) are likely to take longer than six months.
The above timescales are simply estimates given on the assumption that all of your documentation is in order, that we do not require any additional information from you in order to proceed with your claim and that we do not experience any delays with the court.
You should note that, even if you do successfully obtain Judgment against your debtor, there is no guarantee that your debtor will make payment, in which case, enforcement action may become necessary. We can advise you on the various methods of enforcement and the likely timescales of each. We would add, however, that enforcement action still may not be successful in the event that your debtor does not have the money to pay you.
Who can I speak to if I require more information?
Feel free to contact Isobel Sanders on 01273 525766 if you would like to discuss your matter in greater detail.