As a guide, we set out below our typical fees for recovering an undisputed debt for less than £100,000.
These fees do not include VAT, disbursements (i.e. fees payable to third parties) and agency or barrister’s fees (if necessary).
They are based on the assumption that the debt is undisputed and that the recovery action is straightforward.
They are provided on the basis of the usual number of hours typically spent on the matter by our fee earners. The time spent depends on the number of documents provided, whether any further information is required as well as the complexity of the matter (i.e. whether the dispute involves legal or factual issues which require more detailed analysis).
You can help us to reduce the number of hours spent on a matter by providing us with all the relevant documents at the outset.
Typically, in order to advise in relation to a debt recovery matter, we would require the following documents:-
(1) The invoice(s) giving rise to the debt;
(2) The underlying written contract (if any) or correspondence evidencing an agreement;
(3) Correspondence chasing the payment of the debt / raising any dispute in relation to the debt; and
(4) Purchase Order(s) (in relation to the sale of goods).
Our Hourly Rates
Our hourly rate for debt collection matters are as follows:
Head of Litigation £450
Junior Partner £350
Senior Associates £325
Where possible we will use more junior fee earners (supervised by a partner) to keep costs at a minimum.
Our hourly rates are reviewed annually. These rates are for 2017 – 2018 and may be subject to change from time to time.
Issuing a Claim at Court
Letter of Claim
The first step to take before issuing a Money Claim in Court is to send a Letter of Claim to the debtor in accordance with the pre-action protocol for debt Claims (if applicable).
Typical fee: £750
Typical timescale: The debtor should be given 30 days to reply if the Debt Recovery Protocol is applicable, or 14/21 days if it is not.
We will also advise you in relation to claiming interest on your debt and, in certain cases, compensation under the Late Payment of Commercial Debts (Interest) Act 1998 (as amended by the Late Payment of Commercial Debts Regulation 2013).
If our pre-action letter provokes a response from the debtor and we enter into negotiations / correspondence on your behalf, our hourly charges (above) plus VAT will apply.
Should the debtor not pay despite receipt of our Letter of Claim, the next step may be to issue a Money Claim against the debtor.
Typical fee: £1,500
Typical timescale: 1-2 week(s) to draft, file and serve the Claim
Should it be necessary to instruct counsel to draft the necessary documents, their fee would be in addition and would need to be confirmed by counsel’s clerk.
A Court fee will also be payable in order to issue the Claim and will depend on the amount claimed:-
Claim amount Paper form fee Online Claim Form
Up to £300 £35 £25
£300.01 to £500 £50 £35
£500.01 to £1,000 £70 £60
£1,000.01 to £1,500 £80 £70
£1,500.01 to £3,000 £115 £105
£3,000.01 to £5,000 £205 £185
£5,000.01 to £10,000 £455 £410
£10,000.01 to £100,000 5% of the Claim 4.5% of the Claim
If the debtor fails to file a Notice of Intention to Defend the Claim or a Defence, we will make an application for Default Judgment.
Typical fee: £350
Typical timescale: after 14 days (if no Notice of Intention to Defend the Claim is filed), or after 28 days of the service of the Claim (if a Notice of Intention to Defend is filed but no Defence (nor any request / application for an extension of time is made)).
Recovery of legal costs
If Default Judgment is entered against the debtor, the Court will award you fixed costs (which will be added to the Judgment debt). However, these fixed costs are nominal (usually around £130 – however, please note that the amount does depend on a number of factors).
The fixed costs regime applies unless the court orders otherwise. Accordingly, we may advise that you apply to Court for a different Costs Order. The appropriate Order will then, ultimately, be a matter for the Court's discretion.
If your Claim is disputed and you are ultimately successful at Trial, then (provided your debt is for more than £10,000), you may be entitled to recover a proportion of legal costs from the debtor. The Court does have a broad discretion in relation to what costs order to make (which will depend on several factors). Fixed costs apply to certain parts of the legal proceedings if the debt is for between £10,000 and £25,000.
Disputed / Complex Claims and Claims for more than £100,000
If your debt is for more than £100k, is disputed or is complex (i.e. there are legal or factual issues which require a more detailed analysis), our fees would be more than the typical fees stated above and we would be pleased to provide you with a fee estimate for our work.
If despite, obtaining Default Judgment, the debtor does not pay, there are several ways to enforce a Judgment including:
- Warrant of Execution whereby a High Court Enforcement Officer (previously known as a Bailiff) attends the debtor’s property to seize assets up to the value of the Judgment Debt.
- Charging Order whereby the debt is secured as a charge against the debtor’s property.
- Third Party Debt Order whereby, should the debt be owed money by a third party, this debt is ordered instead to be paid to you.
- Attachment of Earnings Order whereby the debtor pays a proportion of his / her monthly income to you in instalments in satisfaction of the debt.
- Insolvency Proceedings.
The method of enforcement and our charges for enforcement action will depend on the debtor’s circumstances (e.g. if the debtor owns property or is employed). Should it be necessary to take enforcement action against the debtor, we would be pleased to provide you with a fee estimate for this work.
The timescales for enforcement action will vary depending on the specific facts of a case and the method of enforcement.
NB: the above fees and costs are provided as at December 2018 and may be subject to change. We review our hourly rates annually. The Court and other third parties also regularly review their charges / fees and so are also subject to change.
Claire Sansome is a Senior Associate in the team and has over 4 years’ experience in this area.
Bhavini Khatri joined the debt recovery team in September 2018 and continues to gain experience in this area.