At Pattersons Commercial Law, we understand that cash flow is the lifeblood of any business and that simply turning a blind eye to it can cause more stress and pain when the business or person that owes you money simply runs out and are unable to settle the sums due.
Our debt recovery service is available to Individuals, Partnerships or Limited Companies to be able to efficiently recover sums owed to them. The service has been designed to cater for clients’ individual needs for the particular situation they are in. We will arrange for a dedicated solicitor to review the situation, consider the steps needed to be taken based on the information that you hold and then for the planned works to be undertaken.
The process has been designed to offer a cost-effective method of pursuing money owed to you with the right amount of expertise, experience and logic.
Contact us to talk through your case to see how we can assist.
We will apply an initial set up fee if we have not previously acted for you. This is a standard charge to open the file of papers and to undertake identity checking requirements placed upon us.
Where we are able to do so, we will seek to clarify precisely what the costs will be ahead of undertaking the work for you. This will give you a clear understanding of the costs and steps involved and the timeframes to deal with the matter.
The fees and charges incurred (known as ‘disbursements’) referred to here are our fees for undefended debts in accordance with our fee scales below. The details specified are based on the current court fees (last updated in August 2020). We have also sought to set out details of other fees that may be incurred (and which may vary on a case by case basis). Some fees like agents’ fee for attending a hearing may be subject to change outside our control.
Court fees and certain Land Registry fees are not currently subject to VAT. Where disbursements are subject to VAT, we have sought to set this out. Where fees and disbursements are subject to VAT, this will be so at the current 20% rate.
Stage 1 – Letters before action and Late Payment demands
Our fee to consider your paperwork and send a Pre-Action Letter will depend on the volume of documentation and the time taken to consider this and thereafter draft the letter before action – including any correspondence or phone calls with you to ensure a full understanding of all issues.
In a straightforward case, where your paperwork is in good order, our fees for preparing the Letter Before Action or demand are likely to be in the region of £150 – £200 + VAT.
Within this stage we would outline that the steps that we will be taking are:
- Considering the instructions and reviewing the documentation. You may find it useful to complete our Instruction Form which you can request here.
- Considering the legal status of the debtor and undertaking general checks on them
- Calculating contractual interest payable to you based on your terms and conditions of business
- If there are no terms of business, then we will calculate interest based on the applicable statutory law
- If you seek to claim back Late Payment Compensation* and recovery charges for business-to-business debts, we will ensure that these charges cover our fees.
- Drafting the formal Letter Before Action to the debtor and giving them the relevant period of time to reply (14 or 30 days depending on the debtor’s legal status)
- Collecting the payment from the debtor
- Advice and assistance about the matter throughout
*under the Late Payment of Commercial Debts (Interest) Act 1998 and the Late Payment of Commercial Debts Regulations, you are entitled to charge interest and receive compensation sums from the debtor for business to business debts.
Stage 1 Debt Collection Charges
|Debt owed||Our fees|
|Pay as you go||No recovery, No fee|
|£0 – £1,000||£125 + VAT (additional £35 +VAT for each extra defendant)||20% recovery fee plus VAT on a “no recovery, no fee” basis|
|£1,000.01 – £10,000||£150 + VAT (additional £50 +VAT for each extra defendant)||10% recovery fee plus VAT on a “no recovery, no fee” basis|
|£10,000.01 +||£250 + VAT (additional £100 +VAT for each extra defendant)||5% recovery fee plus VAT on a “no recovery, no fee” basis|
Stage 2 – Court Proceedings
Due to the manner in which we keep our fees low for Stage 1, we would clarify that the service does not permit us to be able to conduct a full review of your matter and determine our views in relation to contractual liability or the legal position of the parties. Nor does it permit us to review or consider disputes between you and the debtor or any disputed matters subsequently raised by the debtor.
Where it is necessary to move to commence Court proceedings, you are entitled to claim the Court fee that you have to pay to issue a claim and also certain “fixed costs”, which are identified within Part 45 of the Civil Procedure Rules, from the debtor. The Court fee and “fixed costs” will form part of the total sum that you would be looking to recover from the debtor in the event that your claim is successful, and the debtor has the ability to pay the sums due under the County Court Judgment.
We will require payment of the court issue fee for your claim at the time that the claim is issued.
Our fees and disbursements on issuing a claim form are set out in the table below, together with details of the “fixed costs on issue” that are confirmed to be recoverable from the debtor. We would also set out that our fees set out below are payable by you irrespective of the sums that are recovered from the debtor as part of the sum due under the judgment.
If you have not done so already, we would require you to complete our Information Form to allow for the process to be conducted efficiently.
|Amount Claimed||Our fees (excl VAT)||Court Issue fee||Recoverable Fixed Costs|
|£25.00 – £299.99||£250.00||£35.00||£50.00|
|£300.00 – £499.99||£250.00||£50.00||£50.00|
|£500.00 – £999.99||£250.00||£70.00||£70.00|
|£1,000.00 – £1,499.99||£250.00||£80.00||£80.00|
|£1,500.00 – £2,999.99||£250.00||£115.00||£80.00|
|£3,000.00 – £4,999.99||£300.00||£205.00||£80.00|
|£5,000.00 – £9,999.99||£350.00||£455.00||£100.00|
|£10,000 – £199,999.99||£500.00||5% of the value of the claim||£100.00|
|Amount of Claim||Court fee||Example claim value||Example Court fee payable||Fixed costs on claim|
|£10,000 – £199,999.99||5% of the claim value||£75,000.00||£3,750.00||£100.00|
|Amount Claimed||Our fees (excl VAT)||Court Issue fee||Recoverable Fixed Costs|
Stage 3 – Entering Judgement
There is no Court fee payable to enter a Default Judgment in the absence of a Defence being lodged by the debtor.
Our fees for entering judgment in default are £35.00 plus VAT.
On entering judgment in the absence of a Defence having been lodged by the opponent, you can claim the “fixed costs on entry of judgment” set out in Part 45 of the Civil Procedure Rules. The sums stated will also form part of the sum that will be claimed against the debtor under the judgment from the Court.
The amount of recoverable “fixed cost on entry of judgment” which you can claim will depend on the amount of the claim and stage at which judgment is entered as set out in the table below.
|In default of an Acknowledgement of service|
|£25.00 – £5,000.00||£22.00|
|In default of a Defence|
|£25.00 – £5,000.00||£25.00|
|By an admission of liability proposals accepted|
|£25.00 – £5,000.00||£40.00|
|By an admission of liability proposals rejected|
|£25.00 – £5,000.00||£55.00|
Stage 4 – Enforcement Default Judgement
Where Judgement has been entered as in Stage 3 above, and a County Court Judgement has been obtained, but payment is still not received from the debtor, there are a number of methods of enforcement available to be taken against the debtor. Only the fixed costs and court issue fees are recoverable at this stage from the Defendant upon a successful outcome.
We would also state that at this stage there are a number of options available to you depending on the level of the debt and all information known about the Defendant. We will discuss the best option with you and advise on the appropriate steps based on the information that you know.
Our fees are based on the following:
|Enforcement action||Our fee||Court fee||Additional requirements|
|Oral Examination (Order to obtain information from a debtor)||£275.00 + VAT||£55.00||Process servers fee (approximately £100 – £125 + VAT)|
|Warrant of Control (County Court Bailiffs)||£250.00 + VAT||£83.00|
|Application for Third Party Debt Order||£450.00 + VAT||£110.00|
|Application for a Charging Order||£450.00 + VAT||£110.00||£60.00 Land Registry fees|
|Attachment of Earnings Order||£250.00 + VAT||£110.00|
High Court Enforcement action
Where the County Court Judgement exceeded £600.00 in value, it is possible to instruct High Court Enforcement Officers (HCEO) to attempt to recover the debt owed on your behalf.
|Description||Our fees||Court fee|
|Instructing High Court Enforcement Officers||£150 + VAT||£66.00||If debt is recovered successfully from the debtor then no further fee payable.
If debt is not recovered successfully then a compliance fee of £75 plus VAT is paid on instructing the HCEO