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DEBT RECOVERY - COSTS INFORMATION FOR RECOVERY OF UNDISPUTED BUSINESS TO BUSINESS DEBTS OF UP TO £100,000

Bad debt can be one of the most damaging aspects of business and recovering it can be a drain on time and resources. We understand this and are happy to talk to you about your unpaid invoices to give you practical and commercial advice on how to reduce the risk of bad debt before it occurs or, if it has occurred already, give you practical and commercial advice on how to recover your debts.

We understand that our clients like transparency and control as to fees so we provide tailored quotes as soon as we have an understanding of the situation you are in – the value of the debt, the position of the debtor, the length of time that has elapsed since invoicing and the steps that have been taken already to chase the debt and any payments that have been made, etc.

Quality does not necessarily come at the cheapest cost. We do not, as some firms do, price our costs as a percentage of the value of the debt to be recovered.

We have set out this guide of our pricing for debt recovery services, however the best way to get an accurate indication of price is to speak to us on 01643 707777 to give us a full appreciation of your situation and requirements.

County Court proceedings

Stage 1 – Pre-Action

·         Range of costs

£150 to £750 plus VAT depending on the complexity and value of the matter including taking your instructions, undertaking appropriate searches, sending a letter before action to the debtor requesting payment before proceedings are issued and reporting to you on any response received. Costs will be based on time costs charged at an hourly rate of between £100 and £250 plus VAT depending on the level of fee earner dealing with your matter (our guideline rates are £100 per hour for a trainee solicitor, £150 per hour for an associate solicitor, £170 per hour for a senior associate solicitor, £250 per hour for a partner - all hourly rates are quoted exc. VAT)

·         Assumptions

The assumptions upon which this estimate is given are: (a) that we have all of the documents and that you will cooperate in providing further information; (b) that your debtor is correctly identified and his whereabouts are known; (c) that the debt is not subject to dispute, set off or counterclaims.

·         Timescales

The usual timescales for this phase are between 1 – 4 weeks.

Stage 2 – Proceedings

·         Range of costs

£150 to £1,500 plus VAT depending on the complexity and value of the matter including drafting and issuing proceedings, where no acknowledgment of service is received applying to the court for judgment in default, obtaining judgment and providing you with advice on the next steps including likely costs if payment is not received. Costs will be based on time costs charged at an hourly rate of between £100 and £250 plus VAT depending on the level of fee earner dealing with your matter (our guideline rates are £100 per hour for a trainee solicitor, £150 per hour for an associate solicitor, £170 per hour for a senior associate solicitor, £250 per hour for a partner - all hourly rates are quoted exc. VAT)

·         Disbursements

A court fee of between £25 and £455 will be payable to issue proceedings for debts of up to £10,000 depending on the value of the debt and whether the claim is issued online or by paper (for further information see here).

For debts over £10,000 up to £100,000 the court fee is 4.5% or 5% of the value of the claim depending on whether the claim is issued online (4.5%) or by paper (5%).

·         Assumptions

The assumptions upon which this estimate is given are: (a) that we have all of the documents and that you will cooperate in providing further information; (b) that your debtor is correctly identified and his whereabouts are known; (c) that the debt is not subject to dispute, set off or counterclaims.

·         Timescales

The usual timescales for this phase are between 2 – 6 weeks.

Anyone wishing to proceed with a claim should note that:

·         Fixed fees operate in this area and there are limits of how much of our costs you can recover from the debtor (see relevant CPR rule here). For a debt of £100,000 where the court serves the claim form and judgment is entered on admission the recoverable costs would be just £140 whereas our costs may be significantly more than this.            

·         The VAT element of our fee can never be reclaimed from the debtor.

·         Interest and compensation or late payment fees may take the det into a higher banding, with a higher cost.

·         The costs quoted above are not for matters where enforcement action such as the bailiff, is needed to collect your debt. For more information on the methods of enforcement see our Blog on Endorcement dated 03 August 2018.

 

Insolvency proceedings

·         Range of costs

£150 to £5,500  plus VAT depending on the complexity and value of the debt including taking your instructions, undertaking appropriate searches, sending a threat to liquidate or statutory demand, bringing a winding up petition. Costs will be based on time costs charged at an hourly rate of between £100 and £250 plus VAT depending on the level of fee earner dealing with your matter (our guideline rates are £100 per hour for a trainee solicitor, £150 per hour for an associate solicitor, £170 per hour for a senior associate solicitor, £250 per hour for a partner - all hourly rates are quoted exc. VAT).

·         Disbursements

A petition fee of £280 will be payable to issue the winding up petition. A process server fee of around £100 will also usually be payable as will an advertisement fee of around £90 and counsel’s fees of between £150 - £500 plus VAT for attending the winding up hearing.

·         Assumptions

The assumptions upon which this estimate is given are: (a) that we have all of the documents and that you will cooperate in providing further information; (b) that your debtor is correctly identified and his whereabouts are known; (c) that the debt is not subject to dispute, set off or counterclaims.

·         Timescales

The usual timescales for this phase are between 2 – 10 weeks.