Debt Recovery – Costs Information

Our Fees

Our Litigation Department is headed by Michael Sawali, Solicitor, whose hourly rate is £250 plus VAT.

The overall cost of your matter will depend upon a number of factors, including the value and complexity of the claim, whether the debt is disputed, the amount of documentation involved, whether court proceedings are required and whether the matter proceeds to a final hearing.

Where possible, we will provide you with an estimate of the likely costs at the outset and keep you informed if that estimate is likely to change as your matter progresses.

Value Added Tax (VAT)

VAT is currently charged at 20% and will be added to our legal fees and to those expenses and disbursements where VAT is applicable.

Please note that the VAT element of our legal fees will not normally be recoverable from your debtor.

Disbursements and Additional Expenses

In addition to our legal fees, you may be required to pay disbursements and other expenses incurred in connection with your matter.

These may include:

• Court fees
• Counsel’s fees
• Expert’s fees
• Search fees
• Process server or enforcement agent fees
• Other third-party expenses reasonably required for your case

Court fees will depend upon the nature and value of the claim. Current court fees can be found on the GOV.UK Civil and Family Court Fees (EX50) page.

Counsel’s fees will depend upon the complexity of the case, the work required and the seniority of Counsel instructed. As a general indication, Counsel’s fees may range from approximately £500 plus VAT to £10,000 plus VAT or more in particularly complex cases.

Where Counsel or an expert is required, we will normally discuss the anticipated cost with you before the expense is incurred.

Undisputed Debt Recovery

Our standard debt recovery costs apply to claims for unpaid invoices or other debts which are not disputed and where enforcement action is not required.

If the debtor disputes the claim, files a Defence or Counterclaim, or the matter otherwise becomes contested, additional work will be required. We will discuss this with you and provide you with an updated estimate of the likely costs before undertaking significant additional work.

Depending upon the circumstances, additional work may be undertaken for an agreed fixed fee or at our applicable hourly rates.

What Our Debt Recovery Service Includes

Depending upon the circumstances of your matter, our work may include:

• Taking your instructions and reviewing the relevant documentation
• Carrying out appropriate searches
• Preparing and sending a Letter Before Claim
• Dealing with correspondence from the debtor
• Receiving payment and accounting to you for the sums received
• Preparing and issuing court proceedings where payment is not made
• Applying for Judgment in Default where no Acknowledgment of Service or Defence is filed
• Writing to the debtor requesting payment following Judgment
• Advising you on the available enforcement options and likely additional costs if payment is not received

Matters Not Included in Our Standard Fees

Unless expressly agreed otherwise, our estimated fees do not include:

• Appeals
• Enforcement proceedings
• Additional or interim hearings
• Applications arising during the proceedings
• Challenging or appealing court decisions
• Extensive work involving expert witnesses
• Counsel’s fees
• Court fees and other disbursements
• Work arising from a Defence or Counterclaim which materially changes the scope or complexity of the case

If additional work becomes necessary, we will discuss the likely costs with you.

Indicative Costs for Disputed Debt Claims

The figures below are indicative only. The actual cost will depend upon the circumstances and complexity of the particular case.

Claims up to £10,000

Claims with a value of up to £10,000 will commonly be allocated to the Small Claims Track, although allocation is ultimately a matter for the Court.

Our anticipated legal fees are generally:

£2,000 – £5,000 plus VAT

We estimate that such matters may involve approximately 8 to 20 hours of work.

This may include:

• Taking instructions and reviewing evidence
• Pre-action correspondence
• Preparing the Claim Form and Particulars of Claim
• Reviewing any Defence
• Completing the Directions Questionnaire
• Dealing with Small Claims Mediation where appropriate
• Preparing witness statements and supporting evidence
• Preparing for and attending the final hearing

Claims Between £10,000 and £25,000

Depending upon the value and complexity of the case, claims within this range may be allocated to the Fast Track.

Our anticipated legal fees are generally:

£5,000 – £10,000 plus VAT and disbursements

We estimate that such matters may involve approximately 20 to 40 hours of work.

Fast Track cases will generally involve more extensive case preparation and procedural requirements than Small Claims matters and may include disclosure, witness evidence, expert evidence where permitted and preparation for trial.

Claims Over £25,000

Higher-value or more complex claims may be allocated to the Intermediate Track or Multi-Track, depending upon the value, complexity and circumstances of the case.

Our anticipated legal fees are generally:

£15,000 – £30,000 plus VAT and disbursements

We estimate that such matters may involve approximately 60 to 120 hours of work.

More complex cases may exceed these estimates. If this becomes likely, we will advise you and provide an updated costs estimate.

The Court Process

1. Pre-Action Stage

We will take your instructions, review the available evidence and advise you on the claim.

Where appropriate, a Letter Before Claim will be sent to the debtor in accordance with the applicable pre-action requirements, providing an opportunity to respond and/or make payment before proceedings are commenced.

The period allowed for a response will depend upon the circumstances of the claim and the applicable pre-action rules or protocol.

2. Issuing Court Proceedings

If the matter is not resolved during the pre-action stage, we will advise you about issuing court proceedings.

A Claim Form and Particulars of Claim will be prepared and issued through the Court.

The defendant will then have the applicable period under the Civil Procedure Rules within which to respond to the claim.

3. Judgment in Default

If the defendant fails to acknowledge or defend the claim within the applicable time limit, it may be possible to apply for Judgment in Default.

If Judgment is obtained, we will write to the defendant requesting payment.

If payment is not made, we can advise you on the available enforcement options and the likely additional costs involved.

4. Defended Claims

If a Defence or Counterclaim is filed, the Court will determine how the case should be managed and to which track it should be allocated.

Depending upon the track and complexity of the proceedings, the Court may give directions dealing with matters such as:

• Disclosure of documents
• Witness statements
• Expert evidence
• Alternative dispute resolution or mediation
• Costs and case management
• Preparation for trial

5. Trial

If the dispute cannot be resolved by agreement, negotiation or mediation, the matter may proceed to a final hearing or trial.

The time required to reach trial will depend upon the Court, the track to which the claim is allocated, the complexity of the proceedings and the availability of the parties and witnesses.

As a general indication, Small Claims and Fast Track proceedings may take several months to more than a year to conclude. More substantial or complex proceedings may take considerably longer.

How Long Will an Undisputed Debt Recovery Matter Take?

An undisputed debt recovery matter may typically take approximately 10 to 20 weeks from receiving your instructions to obtaining payment, depending upon whether court proceedings are required and how promptly the debtor responds.

This estimate assumes that the debtor pays following a Letter Before Claim or, where proceedings are necessary, following Judgment in Default.

If the claim is defended or enforcement action is required, the matter is likely to take longer.

Important Information About Recovering Costs

Before commencing court proceedings, you should be aware that:

• The VAT element of our fees will not normally be recoverable from the debtor.
• Interest and any applicable compensation may increase the overall value of the claim and potentially affect the applicable court fee and how the claim is dealt with.
• The legal costs you incur are not necessarily recoverable in full from the other party, even if your claim succeeds.
• Different rules concerning recovery of legal costs apply depending upon the track to which the claim is allocated.
• Enforcement action is not included within the above estimates and will involve additional fees and expenses if required.
• There is always litigation risk, and obtaining a Judgment does not guarantee that the debtor has the means or assets to satisfy it.