Commercial Debt Recovery
Our charges for acting in a claim to recover a commercial debt vary depending on a range of factors, including the value of the claim, the complexity of the issues involved and the prospects of recoverability from the debtor. We will always provide our clients with a detailed summary of our potential charges for acting on their behalf throughout the various stages of their claim at the outset of the instruction.
Whilst our charges can vary according to the particular facts of any given claim, to help you better understand our typical level of charges, we provide the following estimate of our average costs for acting in an undisputed commercial debt recovery case with a value of up to £100,000.00. When we say “undisputed” we are referring to cases where there is no argument over your right to be paid – for example, where there has been no allegation of breach of contract concerning goods supplied or no suggestion of any failure by the party bringing the claim to provide an adequate service. If the debtor disputes your claim against them at any point then additional costs are likely to be incurred, in excess of those set out below.
We usually charge according to the time spent on each case. Our current hourly rates are:
David Scarrott (Partner/Solicitor) - £325.00 per hour + VAT
Melanie Burton (Legal Executive) - £325.00 per hour + VAT
Gareth White (Solicitor) - £275.00 per hour + VAT
Luke Arnold (Trainee Solicitor) - £125.00 per hour + VAT
(VAT is charged at 20%)
Commercial debt recovery claims can be broken down into three distinct stages:
Stage 1: Pre-Action Stage
The first stage of a commercial debt recovery action is to review the background to and details of the claim, to advise on the contractual position and to prepare a letter before action to the debtor, issuing two follow up letters as necessary; the first to chase up the debtor for payment and then to give a final warning of the commencement of court proceedings. Our charges are estimated as follows:
|Debt Value||Our fee (inc VAT)|
|Up to £10,000||£1,200 (£1,440)|
|£10,001 to £25,000||£1,700 (£2,040)|
|£25,001 to £50,000||£2,600 (£3,120)|
|£50,001 to £100,000||£3,700 (£4,440)|
Our fee includes:
- Taking your instructions and reviewing documentation
- Providing advice by telephone, video call or email on the recovery of your debt
- Carrying out an insolvency check on the debtor
- Calculation of contractual interest payable (subject to your terms and conditions) and/or statutory late payment interest or compensation
- Sending a letter before action and up to two follow up letters
This stage usually takes 4 to 6 weeks.
Stage 2: Court Proceedings – To Obtain Judgment in Default
If the debtor fails to meet your claim in response to the letter of claim, the second stage is to consider commencing proceedings at court. Our charges for acting in this second stage, which are in addition to those for stage 1, are estimated as follows:
|Debt Value||Our fee (inc VAT)|
|Up to £10,000||£1,800 (£2,160)|
|£10,001 to £25,000||£2,800 (£3,360)|
|£25,001 to £50,000||£3,500 (£4,200)|
|£50,001 to £100,000||£4,000 (£4,800)|
Our fee for Stage 2 includes:
- Drafting and then submitting the claim to court
- Where no Acknowledgment of Service or Defence is received from the debtor, applying to the court to enter Judgment in default
- When Judgment in default is received, writing to the other party to request payment
- If payment is not received within 28 days, providing you with advice on next steps and likely costs to enforce payment
Anyone wishing to instruct us to issue their claim at court should note that:
- The VAT element of our fee usually cannot be reclaimed from your debtor
- Interest claimed may take the debt into a higher banding, with a higher cost
- The costs estimated above do not include where enforcement action, such as the appointment of a bailiff, is needed to collect your debt
- The fees estimated above assume that we do not have to trace the location of the debtor, that the debtor resides in England or Wales and do not include court fees
To start your claim at court, in addition to our fees for acting on your behalf, the Court Service also charges a fee. Court fees vary depending on the amount claimed. Full details can be found via the following link:
This second stage usually takes 4 to 6 weeks from receipt of instructions to draft the claim to obtaining a judgment in default.
Stage 3: Enforcement
Once we have obtained judgment in default, if the debtor fails to pay you in accordance with the court’s order you would have to take further steps to seek to make the debtor pay. There are so many variables when it comes to enforcement, which include a range of factors from the amount claimed to the asset type(s) and resources of the debtor, that we can only give you an indication of the possible estimated potential costs of enforcement in a typical case as follows:
|Enforcement Option||Our fee (inc VAT)|
|Instruct Bailiff||£600 (£720)|
|Order for Questioning||£800 (£960)|
|Attachment of Earnings||£600 (£720)|
|Unopposed Charging Order||£1,700 (£2,040)|
|Statutory Demand||£600 (£720)|
|Bankruptcy Petition||£1,200 (£1,440)|
|Winding Up Petition||£1,500 (£1,800)|
Since enforcement action is particularly case specific, we cannot estimate the time frame for completion of stage 3 but you should expect it to take a minimum of 8 weeks from the enforcement step being instructed.
In some circumstances additional costs, known as disbursements (a cost we incur on your behalf) will apply. This could include the cost of instructing an outside agent to trace a debtor (usually between £100 and £200 plus VAT), instructing a process server to serve documents on the debtor usually between £100 and £200 plus VAT), obtaining copy Land Registry documents (£3 per document) and electronic client identification verification (£2.70 plus VAT) We will always advise you in advance if a disbursement will be incurred and will always seek your approval before incurring any disbursements.
The costs information provided above assumes that your claim is not defended, yet it is common for a debtor to issue a defence to a claim against them. In addition to defending the claim, the debtor could also pursue a counterclaim in response to your claim, were he or she to allege that you have a liability to them exceeding the amount claimed. Contested claims involve a much more work and can take significantly longer to conclude. There may be multiple court hearings before the claim is determined, exchange of documentation will need to take place between the parties, witness statements will need to be prepared and experts may need to be appointed to give evidence. The costs incurred per party in a protracted claim can exceed £75,000 plus VAT.
The court has discretion when determining whether one party should pay the costs of another. The general rule is that the unsuccessful party pays a contribution towards the costs of the successful party, typically 60% – 70%, so there is likely to be a shortfall in terms of costs recovery even if you win your case. The court can make other costs orders and may take into account any offers that have been made between the parties when determining liability for costs. In cases with a value of up to £10,000 there is unlikely to be any award of costs to a successful claimant, except for recovery of court fees and very limited “fixed costs” under Civil Procedure Rule 45.
For information on each team member’s qualifications and experience please visit our team’s profiles by clicking the links below: