Legal Disputes
Debt Recovery
Particularly during a credit crisis, circumstances regularly arise where companies or individuals find themselves in a position where the person or company for whom they have provided a service, or to whom they have advanced credit, fail to pay. We are regularly called upon to assist.
What will we do?
Letter of Claim
The Letter of Claim will outline what is outstanding and the steps the person or company needs to take to avoid further action. It will also typically include a claim for interest and compensation. If the amount outstanding is not paid, we proceed to stage two;
In order to issue a Court claim, a Court issue fee is paid to HM Courts & Tribunal Service. All Court issue fees must be paid on account (see table of disbursements below). We will draft the Claim Form to include the outstanding invoice amount, interest, compensation and fixed commencement costs allowed by the Civil Procedure Rules Rule 45.2 (we will normally draft the Claim Form at the same time as the Letter of Claim).
Issuing Court Proceedings
If the claim is not responded to, we will request Judgment as soon as possible. When requesting Judgment, we will claim further fixed costs permitted by the Civil Procedure Rules Rule 45.4.
If the amount of the Judgment debt has not been paid by the debtor then enforcement action will be needed. Commonly, methods of enforcement include:-
- High Court Enforcement Officers
- Third Party Debt Orders
- Charging Orders
How much could it cost?
In simple circumstances where there is non-payment of an invoice and the claim is undefended our charges range as follows:-
Value of claim less than £5,000 –
| Fee | VAT (20%) | Total | |
| Legal Fees | £300.00 | £60.00 | £360.00 |
| Court Fees (max.) | £205.00 | £0.00 | £205.00 |
Value of claim between £5,000 and £10,000 –
| Fee | VAT (20%) | Total | |
| Legal Fees | £600.00 | £120.00 | £720.00 |
| Court Fees (max.) | £455.00 | £0.00 | £455.00 |
Value of claim in excess of £10,000 –
| Fee | VAT (20%) | Total | |
| Legal Fees from | £2,000.00 | £400.00 | £2,400.00 |
| to | £5,000.00 | £1,000.00 | £6,000.00 |
| Court Fees | 4.5% to 5% of value of claim | ||
For more information in relation to Court fees, please refer to https://www.gov.uk/make-court-claim-for-money-court-fees
In circumstances where the debts are challenged by the debtor (or where you are seeking to defend a claim) we charge on an hourly charging rate, which is between £215 plus VAT (total £258) to £325 plus VAT (total £390). The average hourly charging rate on such claims is £280 plus VAT (total £336).
Our hourly charging rates are set out in our Terms of Business and we would expect to advise you clearly of the amount which is likely to be involved (both our costs and disbursements (payments to others)) before any fees are incurred.
Generally, if settled without the need for Court proceedings or formal mediation, our costs are likely to be:
| Fee | VAT (20%) | Total | |
| Legal Fees | £5,000.00 | £1,000.00 | £6,000.00 |
If formal mediation and/or Court proceedings become necessary, we may charge:
| Fee | VAT (20%) | Total | |
| Legal Fees between | £8,000.00 | £1,600.00 | £9,600.00 |
| and | £20,000.00 | £4,000.00 | £24,000.00 |
Disbursements (payments to third party agencies):
- Court fees (see above);
- Process Server fees often around £400 including VAT (for example, if we issue a statutory demand);
- Counsel’s (barristers) fees can range from £900 including VAT to £24,000 including VAT depending on experience and what is involved and if a Trial is needed.
- Enforcement Process fees – £66.00 to transfer a Judgment to the High Court for enforcement.
We can discuss with you both our costs and your likely liability in the event of an unsuccessful claim where you may need to pay the other side’s costs. We can also discuss with you the fixed costs within small claims.
How long might it take?
A simple claim should be concluded within three to four months. Other claims are likely to take between six to eighteen months depending upon a number of factors including Court availability. You can find more guidance on our Commercial Disputes page.