DEBT RECOVERY LITIGATION
1. Debt recovery litigation for debts up to £100,000
Our overall fees for debt recovery litigation will vary depending upon how complex your case is and what you would like us to do. This guide set out how we calculate our charges and an indication of how much the typical case is likely to cost where the claim is not disputed and enforcement action is not needed.
If you are instructing us to issue claims in volume, we will provide you with a bespoke cost estimate for each stage of the process and the rates set out will be discounted.
If your case is more complicated, the debtor disputes the claim or enforcement action is needed, we will advise you about what further work is required and what further costs may be incurred.
For an estimate tailored to your specific matter, please contact us on firstname.lastname@example.org. We will discuss your matter and needs with you and provide you with a bespoke cost estimate.
1.1. Our charges
Our charges consist of:
- Our professional fees for the legal work, charged at either a fixed rate or, if no fixed rate applies, an hourly rate.
- Costs and expenses paid to others in order to progress your matter, such as fees for a barrister. We handle making these payments on your behalf during the course of your matter, either using money that you have given us in advance, or invoicing them to you together with our fees. These payments are called disbursements.
- VAT is charged on our professional fees at the applicable rate, which is currently 20%. Many disbursements also carry VAT, and we will inform you of the VAT on each disbursement as your claim progresses.
1.2 Calculating our fees
In debt recovery litigation the legal fees may vary depending upon how much work we need to do to recover the debt and at what stage the matter is determined.
If your claim is uncontested and non-technical our fees are fixed, however, if the claim is contested or technical in nature our fees will be based on how much time it takes to deal with your case.
Our standard hourly rates are:
- Senior Partner £310
- Solicitor, department manager, or team leader £250
- Trainee solicitor £190
- Senior paralegal £160
- Paralegal £140
- Administrative Assistant £90
1.3 Uncontested actions
Some cases may be more complicated and require us to charge on a different basis, or may take longer than usual, for each stage of the matter. Please contact us for an estimate tailored to your circumstances. This note provides an indication of the typical fees charged for each stage of the debt recovery process where the claim is not defended and enforcement action is not needed.
a) Letter of claim
A letter of claim 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, and is required by the Pre-action Protocol for Debt Claims. Investigating your claim, obtaining and examining any supporting evidence, and preparing and sending the letter of claim typically takes 1-4 hours depending on the nature of the debt and the documents provided.
Our professional fees for this work are typically in the region of £220 – £880 plus VAT at 20%.
If the debt is straightforward in nature and the supporting evidence is straightforward and readily available our professional fees are typically fixed at £200 plus VAT at 20%.
b) Issue court proceedings
If the debt has not been paid following the letter of action, we will prepare and issue court proceedings on your behalf.
Our typical fees for issuing court proceedings are below (VAT does not apply on court fees):
|Debt value||Court fee||Professional fees||VAT||Total|
|£300 or less||£35||£100||£20||£120|
|£10000-£25000||5% of claim value||£2500||£200||£3200-£3950|
|£25000-£100000||5% of claim value||£4500||£500||£6250-£10000|
This stage typically takes between 1-3 months depending on the nature of the debt.
If the debtor does not defend the proceedings we may be able apply to the court to obtain judgment for you. This would bring the proceedings to an end and give you a court order that you could enforce to recover payment of the debt.
Our typical fees for applying for judgment are below (VAT does not apply on court fees).
|Debt value||Court fee||Professional fees||VAT||Total|
|£5000 – £100000||£0||£70||£14||£84|
This stage typically takes 3 days. Our fees will be higher, with an incurred court fee, if it necessary to make an application for judgment, rather than a request.
If we are successful in obtaining judgment for you but payment is still not received then we will advise you on next steps, what enforcement action is available to you and what the likely costs would be.
1.4 Defended claims and more complex cases
If a debtor submits a defence to your claim or the case is otherwise more complicated, we will charge for our work at the hourly rates set out above for the time which we spend on your case.
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. Please contact us for more tailored guidance on your circumstances.
1.5 Disbursements and other expenses
In a debt recovery matter the most common disbursement is the court fee and the costs for these are listed in the tables above. If the matter proceeds to a court hearing a barrister (sometimes called counsel) or an advocate may be instructed to represent you at the hearing. Barristers typically charge at hourly rates which vary according to their seniority. Advocates typically charge a fixed fee. However, in a typical case an advocate’s fee may be £300-£500 whilst a barrister’s fee may be the in the region of £750-£5000 excluding VAT for each day. We will however guide you on this as and when such costs need to be incurred.
1.6 Legal work involved in the matter
The examples of typical costs above cover all of the work in relation to the following key stages of debt recovery litigation:
- Opening our file and obtaining papers from you.
- Sending a letter of claim.
- Receiving payment and forwarding payment to you or, if the debt is not paid, preparing and issuing court proceedings.
- If no response is received, applying to the court for judgment in default (at the additional costs detailed above).
- If judgment in default is received, writing to the debtor to demand payment.
- If payment is still not received within the specified timescale, providing you with guidance on the next steps and likely costs.
The costs set out above do not include enforcement action, for example instructing bailiffs to go out and collect the debt on your behalf. If this becomes necessary in your matter, we will advise you on the enforcement action available to you and the likely costs at that time.
In an undisputed claim where enforcement action is not required 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.
1.7 Matter time frame
Please see time estimates above for the timescales in each stage of the process.
If a debt claim is not defended, the overall process typically takes about 3 months from sending the letter of claim to obtaining a judgment in default.
Where the debtor has sufficient funds and pays on receiving the judgment in default against them, payment of the debt is typically recovered within 4 months.
If the debt is disputed, defended or enforcement action is required, the matter will take longer than this to resolve, and will involve additional costs which will be discussed with you in advance.
1.8 Staff dealing with your case
Your debt recovery litigation will be handled by a trusted member of our experienced dispute resolution 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, and the work they undertake or supervise, are available here www.harwood.law.
Regardless of who is working on your case the matter will be supervised by Robert Addlestone.