Our Debt Collection service usually begins with a letter before action being sent to the debtor.
Most clients have already sent several reminders to the debtor before they consider instructing a solicitor.
Many debt collectors like to threaten insolvency or bankruptcy by sending a statutory demand and delivering it in person via a process server. This can be intimidating, but in our experience, this is not a cost-effective approach, unless you actually intend to follow through with your threats. Furthermore, if the debt is disputed, the debtor could challenge a statutory demand which if successful could lead to a costs order being made against you.
You should also bear in mind that if your debtor does become insolvent or bankrupt at any stage of the process then you are unlikely to recover anything anyway.
Court Judgements and Enforcements
Before issuing court proceedings, you should consider whether the debtor has the assets to pay your debt. If not, then obtaining a court judgment against them may be ineffective in recovering any money from them. However, if you do obtain judgment then there are several different enforcement options available to you, which we discuss here: Understanding Enforcement Options
As Solicitors, we have an advantage over debt collection agencies in that we have experience acting for both debtors and creditors, from the initial letter before action right through to the enforcement procedures, including bankruptcy and insolvency. We will advise you regarding the various legal remedies available to you to recover your money and which ones are most appropriate and cost-effective for your specific matter.
Debt Collection from £50 plus VAT
We therefore usually recommend that we send just one solicitors’ letter by first class post threatening legal action. For most debts as little as 7 days notice can be given and for this service we will charge you £50 + VAT. We usually recommend that this letter is not sent using registered post or other signed for delivery service as documents are often deemed to be delivered provided you can provide evidence of posting. In other words, you do not have to prove that there were received only that they were posted. After that, if no payment is received within the time limit we normally advise you to issue court proceedings.
If the debt is between a business and an individual, or a sole trader, a pre-action protocol applies and you are required to provide the debtor with certain specific information and allow 30 days for a response to be received before issuing proceedings. We will advise you if this applies to your debtor and will ensure that the required information is provided to the debtor.
These costs apply where your claim is in relation to an unpaid invoice which is not disputed and enforcement action is not needed.
If the other party disputes your claim at any point, we will discuss any further work required and provide you with revised advice about costs if necessary, which could be on a fixed fee (e.g. if a one off letter is required), or an hourly rate if more extensive work is needed.
|Value of Claim (including interest)||Type of Claim||Paper Claim Form Fee||Online Claim Form Fee||Initial Advice (Fixed Fee)||Full Representation (plus VAT)|
|Up to £300||Small Claim||£35||£25||£95||£250-£750|
|£300.01 to £500||Small Claim||£50||£35||£95||£250-£750|
|£500.01 to £1,000||Small Claim||£70||£60||£95||£250-£750|
|£1,000.01 to £1,500||Small Claim||£80||£70||£95||£250-£750|
|£1,500.01 to £3,000||Small Claim||£115||£105||£95||£250-£750|
|£3,000.01 to £5,000||Small Claim||£205||£185||£95||£250-£750|
|£5,000.01 to £10,000||Small Claim||£455||£410||£95||£250-£750|
|£10,000.01 to £25,000||Fast Track||5% of the claim||4.5% of the claim||£95||£500-£3,000|
|£25,001-£100,000||Multi Track||5% of the claim||4.5% of the claim||£95||£1000- £10,000|
|£100,000.01- £200,000||Multi Track||5% of the claim||Unable to issue online||£95||£1000- £10,000|
|More than £200,000||Multi Track||£10,000||Unable to issue online||£95||£1000- £10,000|
Anyone wishing to proceed with a claim should note that:
- The VAT element of our fee cannot be reclaimed from your debtor.
- Interest and compensation may take the debt into a higher banding, with a higher cost.
- The costs quoted above are based on the debt being undisputed and enforcement action, such as the bailiff, is needed to collect your debt not being required.
Our fee includes:
- Taking your instructions and reviewing documentation
- Undertaking appropriate searches
- Sending a letter before action
- Receiving payment and sending onto you, or if the debt is not paid, drafting and issuing claim
- Where no Acknowledgment of Service or Defence is received, applying to the court to enter Judgment in default
- When Judgment in default in received, write to the other side to request payment
- If payment is not received within 7 days, providing you with advice on next steps and likely costs
Our fee does not include:
- Pre Action Correspondence with the debtor or their solicitor
- Service of the Claim Form by any method other than first class post (for example via personal service or where the debtor lives abroad)
Matters usually take between 6 weeks – 10 weeks from receipt of instructions from you to receipt of payment from the other side, depending on whether it is necessary to issue a claim and the progression of the claim.
This is on the basis that the other side pays promptly on receipt of Judgment in default.
If enforcement action is needed, the matter will take longer to resolve and future fees will be involved, see Understanding Enforcement Options
For all other debts, initial advice can be given via a one-hour fixed fee meeting for £95 including VAT. Thereafter, we will give you an estimate and we will not exceed that estimate without getting your permission first. If appropriate, we will offer you a fixed fee for a fixed amount of work. We also offer Pay As You Go Legal Service, whereby you only pay for the legal services you actually want.
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Justin Sadler supported me through the process of agreeing a compromise / settlement agreement with my employer. He was very understanding both of my position and of what the legal position was. He asked lots of questions to make sure he understood the fact pattern and then put my case forward to get the best deal possible. I was very happy with the overall outcome and the significantly increased offer we received from the employer. I would happily use Justin again and would recommend the use of him and his team.
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