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Debt Recovery (Against Businesses)

Debt Recovery (Against Businesses) 

Our debt recovery pricing structure assumes that your claim is a standard and undisputed debt arising from unpaid invoices.

In cases of greater complexity, or if the matter becomes disputed, we will need to discuss your options with you going forward as this type of claim will not fall under our pricing structure. If you proceed to instruct us on a complex or disputed debt, we will you charge using our hourly rates:

  • Principal Lawyer – £250.00 – £275.00 + VAT
  • Senior Associate – £217.00 – £250.00 + VAT
  • Associate – £190.00 + VAT
  • Solicitor – £160.00 + VAT
  • Paralegal/Trainee Solicitor – £118.00 + VAT

To verify the likely fees of the options available to you, please click on the below options?

Who owes you money?

Business 


1. Standard procedure 

The standard debt recovery process involves sending the Debtor a Letter of Claim seeking payment, issuing a claim against the Debtor if payment is not received and requesting Judgment in default. Upon obtaining Judgment, you can then seek to enforce if payment is not forthcoming.

Letter of Claim (£30 – £90 inclusive of VAT) 

We will write a Pre-Action Protocol compliant Letter of Claim to the Debtor seeking payment of the outstanding amount and any interest and fixed court costs you can claim from the Debtor (within a minimum of 30 days for an individual or sole trader). This stage may involve taking instructions from you on the amount of the debt, your payment terms and the interest to be applied (either contractual or statutory interest).

The first time you instruct us, we will charge you a fixed fee of £75 plus VAT. Subsequent instructions will be charged at a reducing rate as follows:

Number of instruction in a rolling 12 month period Our Fees VAT Payable Total Cost
2 – 10 £75.00 £15.00 £90.00
11 – 20 £50.00 £10.00 £60.00
21 + £25.00 £5.00 £30.00

N.B. The Debtor will have an opportunity to dispute the debt at this stage.

Issue Claim (£354.00 – £594.00 inclusive of VAT)

If the debt is not contested and no response is received from the Debtor, we will issue a claim against the Debtor on your behalf. The costs of issuing a Claim are as follows:

Value of Claim Our fees VAT payable Total Cost Fixed Recoverable Costs
2 – 10 £295.00 £59.00 £354.00 £50.00-£80.00
11 – 20 £395.00 £79.00 £474.00 £100.00
21 + £495.00 £99.00 £594.00 £100.00

A proportion of our charges (the “fixed recoverable costs”) can be recovered from the Debtor in the event your claim is successful.

In addition to our charges above, you will also have to pay a court fee to issue your Claim, which is also recoverable from the Debtor. The Court Fee is calculated on the value of the Claim, as follows:

Value of your claim Court fee
Up to £300 £35.00
Greater than £300, but no more than £500 £50.00
Greater than £500, but no more than £1,000 £70.00
Greater than £1,000, but no more than £1,500 £80.00
Greater than £1,500, but no more than £3,000 £115.00
Greater than £3,000, but no more than £5,000 £205.00
Greater than £5,000, but no more than £10,000 £455.00
Greater than £10,000, but no more than £200,000 5% of the claim value
Greater than £200,000 £10,000.00

Again, the Debtor will have an opportunity to dispute the debt at this stage by filing a Defence to the Claim with the Court.

Request Judgment in Default (£60 inclusive of VAT)

If the Debtor fails to pay or respond to the Claim you can apply for Judgment in Default. Our charges for applying to the Court for Judgment in Default are as follows:

Value of Claim Our Fees VAT Payable Total Cost Fixed fee recoverable
Up to £100,000 £50.00 £10.00 £60.00 £22.00-£55.00

When applying for Judgment in Default, depending on what actions, if any, have been taken by the Debtor you can recover a further proportion of our charges (the “fixed recoverable costs”) from the Debtor in the event Judgment is obtained.

Once Judgment is received we can discuss its enforcement with you.


2. Alternative procedure 

Formal Demand (£180 – £462 inclusive of VAT and other expenses)

The first step in a Winding Up Petition is to send a formal demand to the Debtor’s registered office demanding of the debt. This can be done either by a Letter of Intention or Statutory Demand.

A Letter of Intention requests payment within a period of time set by you although we would usually advise this should be a minimum of 7 days. The shorter the period for payment provided in the Letter of Intention, the more aggressive the approach. However, if too short a period is given the Courts may be reluctant to view non payment within the specified period as evidence of the Debtor’s inability to pay its debts as they fall due (i.e. insolvency).

Some clients prefer to send a formal Statutory Demand before presenting a Winding Up Petition. A Statutory Demand provides the Debtor with a period of 21 days in which to make payment to you or apply to set the Statutory Demand aside. If the debt is unpaid, and no application to set aside the Statutory Demand is made, you can rely on non payment by the Debtor as evidence of its inability to pay its debts as they fall due. Statutory Demands need to be personally served on the Debtor, usually by a process server.

The costs of these initial stages are as follows:-

Our fees (exc. VAT) VAT payable Total Cost
Letter of Intention £150.00 £30.00 £180.00
Statutory Demand £300.00 £60.00 £360.00

 

Other expenses Process Server’s Fees* (exc. VAT) VAT payable Total Cost
Personal Service of Statutory Demand £85.00 £17.00 £102.00

*includes certificate of service and assumes Debtor is based in UK mainland.

N.B. The Debtor will have an opportunity to dispute the debt at this stage.

WINDING UP PETITION

STAGE 1: Preparing and issuing Winding Up Petition (£3,782.00 inclusive of VAT and other expenses)

If payment is not forthcoming within the time limit specified in the Formal Demand, then we would prepare and issue a Winding Up Petition on your behalf. The Winding Up Petition would need to be personally served on the Debtor at its registered office.

When issuing a Winding Up Petition a Court Fee is payable together with a deposit to the Official Receiver.

Our fees (exc. VAT) VAT payable Total Cost
Preparing and Issuing Winding Up Petition £1500 £300.00 £1800.00

 

Other expenses fees (exc. VAT) VAT payable Total Cost
Court Fee to Issue £280.00 Nil £280.00
Process Server’s Fees £85.00 £17.00 £102.00
Official Receiver’s Deposit £1,600 Nil £1,600.00

If the Debtor pays the debt following service of the Petition we would not agree to withdraw the Petition until such time as your legal costs were recovered in full, unless otherwise instructed by you.

The Debtor will have an opportunity to dispute the debt at this stage and can do so up to and including at the hearing of the Petition.

STAGE 2: Negotiations (£600.00 inclusive of VAT)

Once the Petition has been issued, you will have an opportunity to negotiate payment of the debt with the Debtor. We would advise that if agreement for payment cannot be achieved within 7 days, to proceed to the next stage. Our typical charges for seeking to negotiate payment by the Debtor during the 7 day period are as follows:-

Our fees (exc. VAT) VAT payable Total Cost
Negotiations £500 £100.00 £600.00

The above quotation is not a fixed fee. If it becomes clear that negotiations are going to be protracted, then we will provide you with a revised fee quote at that stage.

STAGE 3: Advertising the Petition (£674.58 inclusive of VAT and other expenses)

There is a risk that, if no proposals have been put forward by the Debtor after service of the Petition, the Debtor could be insolvent and unable to pay you what you are owed. This may mean that the chances of you recovering your debt are remote. If payment is not forthcoming it is a matter for you to decide whether or not you wish to go ahead and advertise the Petition or withdraw the Petition.

It is the threat of advertising the Petition that will hopefully force the Debtor to pay the debt. Upon advertising of the Petition in the London Gazette it is likely that the Debtor’s bank accounts will be frozen effectively causing the Debtor to cease trading.

The cost of advertising the Petition is as follows:

Our fees (exc. VAT) VAT payable Total Cost
Advertising the Petition £500 £100.00 £600.00

 

Our fees (exc. VAT) VAT payable Total Cost
Gazette Advertisement Fee £62.15 £12.43 £74.58

Our charges include dealing with any payment proposals received from the Debtor after advertisement of the Petition.

STAGE 4: Hearing of the Petition (£702.00 – £890.00 inclusive of VAT and other expenses)

If you are minded to wind up the Debtor, we would instruct a barrister to attend on the hearing of the Petition on your behalf.

Our fees (exc. VAT) VAT payable Total Cost
Instructing Barrister to represent you at Hearing £500.00 £100.00 £600.00

 

Our fees (exc. VAT) VAT payable Total Cost
Gazette Advertisement Fee £85.00-£200.00 £17.00-£40.00 £102.00-£240.00

The Debtor can still use the Petition hearing as an opportunity to dispute the debt. If the Debtor can show that it has reasonable prospects of disputing the debt, the Court is likely to adjourn the Petition so that the dispute can be resolved, often in a separate set of Court proceedings.

The above fee quotes are on the basis that there is only one hearing. If there are additional hearings or the hearing is adjourned, we will provide an estimate of further fees which would be incurred at that stage.

*This is an indicative cost and actual fees will be subject to quotation.

Withdrawing the Petition (£650 inclusive of VAT and other expenses)

The Petition can be withdrawn at any stage after it has been issued.

In the event that no payment proposals are received from the Debtor and it seems likely that the Debtor will go into liquidation it is possible for you to withdraw the Petition before the final hearing. Withdrawal of the Petition attracts a Court Fee of £50.00, however, the Official Receiver will refund your deposit of £1,600.00.

Our fees (exc. VAT) VAT payable Total Cost
Withdrawing the Petition £500.00 £100.00 £600.00

 

Our fees (exc. VAT) VAT payable Total Cost
Court Fee to withdraw Petition £50.00 Nil £50.00
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