Undisputed Business Debt Recovery | Company to Company

As with all of our pricing, we provide transparency and certainly of the costs you may incur. 

Below are our costs for seeking recovery of undisputed business debts on a single instruction basis (if we are asked to handle multiple debts we will adjust our fees accordingly). Dependant on the type of work and the stage of the process, we will either work on a fixed fee or on an hourly rate basis. When an hourly rate is more appropriate, our focus is always on transparency.

We will provide you with a view of the approximate overall cost for the matter from the outset, and keep you closely updated as work progresses.

 


 

Letters before action.

We charge a fixed fee of £150 plus VAT for sending the debtor a letter claiming payment in writing and sending you a copy of the response received.

To prepare that initial letter we need from you:

1. Name and address of the debtor.

2. Amount owed.

3. Evidence as to how that debt has arisen and whether interest or other charges have been added.

Court Action.

There are two processes you can use to try to recover an undisputed debt:

1. Court Claim

2. Insolvency Action

 

Court Claim.

When to use?

Court action is commenced by filing at court a claim form with details of the claim and payment of the court fee. The court fees are set out below.

The court send out the Claim to the debtor. The debtor has 14 days to respond (or if they file an acknowledgment of service). If they don’t respond, you can apply for judgment in default.

The main benefit of using the court action process is that it gives you access to the court’s enforcement methods. The most likely to be of benefit are:

1. Third party debt order – where a third party who has access to the debtor’s money is ordered by the court to pay you (usually used against a debtor’s bank).

2. Charging order – where the debt is secured against the debtor’s assets (property, shares, vehicles or other assets).

3. Bailiff – where the court bailiff seeks to recover assets to the value of the judgment (up to £5,000).

4. High Court Enforcement Officer (HCEO) – for debts exceeding £600 we can instruct for you a HCEO to transfer the claim to the High Court and seek the recovery of assets. A HCEO have greater powers of seizure than a bailiff.

 


 

Our Costs and Court Fees.

Due to the varying complexity of the work at this stage, we will adopt an hourly rate charge for this work. Our fees listed below are an indication of the maximum fee we anticipate based on the varying debt values. We will ensure we provide you with a clear view of the total cost and agree this with you ahead of undertaking the work.


Debt Value


Our Maximum
Fee (excl VAT)


Court Fee


Total (excl VAT)

< £300.00

£100

£25

£125-135

£300 - £499.99

£100

£35

£135-150

£500 - £999.99

£150

£60

£210-220

£1,000 - £1,499.99

£200

£70

£270-280

£1,500 - £2,999.99

£250

£105

£355-365

£3,000 - £4,999.99

£300

£185

£485-505

£5,000 - £9,999.99

£350

£410

£760-£805

£10,000 - £14,999.99

£700

4.5%

Court Fee Dependent

£15,000 - £49,999.99

£1,050

4.5%

Court Fee Dependent

£50,000 - £99,999.99

£3,000

4.5%

Court Fee Dependent

> £100,000

£6,000

TBC

Court Fee Dependent

 

What's included in the fee?

1. Taking your instructions and reviewing your documentation

2. Undertaking any appropriate company searches (not a credit report or investigative reports)

3. Where no defence is filed at court, applying to the court to enter judgment in default

4. When judgement in default is received, writing to the debtor requesting payment

5. If payment is not received within 14 days, providing you with our recommendation on which enforcement method to use.

Things to note.

1. The Court fee can be recovered if successful in your claim, but the legal costs are not recoverable in claims of £10,000 or less. Such claims are allocated to a part of the court that deals with smaller claims on what is called “the small claims track” where legal costs are unrecoverable except in exceptional circumstances.

2. If you are registered for VAT, the VAT element of our fee cannot be reclaimed from your debtor.

3. Interest and any compensation under the Late Payment of Commercial Debt (Interest) Act 1998 may take the debt into a higher banding, with higher costs.

4. The above costs are not for matters where enforcement action, such as the bailiff, is needed to collect your debt.

5. It is useful to assess the prospect of the debtor making payment. We can obtain credit reports and instruct investigators to report on the debtor’s ability to pay, which is an additional service.

6. If the debtor disputes the debt, you may be unable to remove yourself from the claim unless you compromise the claim, succeed at trial or discontinue the claim (which usually requires you to pay the debtor’s costs).

7. The above costs do not include entering into discussions or negotiations with the debtor – we can do so, and in this situation, we will always discuss and agree our cost with you before proceeding.

8. We can deal with debts in excess of £100,000 – see below.

9. It usually takes between 4-6 months from the letter before action to enforcement of the judgment. Of course, if the debtor chooses to pay the debt earlier a shorter time frame may apply.

 


 

Insolvency Action.

When to use?

The undisputed amount of the debt must exceed £750.

This process often places greater pressure on the debtor to make payment. Strictly speaking success is the winding up of the debtor and appointment of a liquidator but, because of the consequences of that, most debtors settle before being wound up.

It can be used as an alternative to the court claim or used after obtaining judgment (most use it as the alternative).

There is no requirement for the service of a statutory demand (see below), but it helps to serve one as it gives you another opportunity to extract payment by placing pressure on the debtor.

(b) Our Costs and Court Fees

Due to the varying complexity of the work at this stage, we will adopt an hourly rate charge for this work. Our fees listed below are an indication of the maximum fee we anticipate based on the varying debt values. We will ensure we provide you with a clear view of the total cost and agree this with you ahead of undertaking the work.

What's included?

1. Taking your instructions and reviewing the documentation

2. Undertaking any appropriate company searches (not a credit report or investigative reports)

3. Preparation of all documents to progress the stages.

4. Correspondence to the debtor at key stages to seek recovery before the claim progresses.

Things to note.

1. As soon as a genuine dispute of the debt has been put forward by the debtor, this process should not be pursued.

2. If the debtor is wound up, the debt and the costs paid will form a debt in the liquidation. Payment is made on a pro-rata basis alongisde all unsecured creditors from the liquidated assets of the debtor. In some cases this can mean no recovery of your debt or a very small percentage and often this will be delayed.

3. If you are registered for VAT, the VAT element of our fee cannot be reclaimed from your debtor.

4. The above costs do not include entering into negotiations with the debtor – we can do so, and in this situation, we will always discuss and agree our cost with you before proceeding.

5. It is useful to assess the prospect of the debtor making payment. We can obtain credit reports and instruct investigators to report on the debtor’s ability to pay, which is an additional service.

6. It usually takes between 4-6 months from the letter before action to the winding up of the debtor. The matter can be resolved earlier if we can extract payment from the debtor.

 


 

Risk share.

Depending on the number of debt claims that you bring to us for our assistance, or whether we are prepared to share the risk with you, we may be willing to forego our usual charges and agree a different remuneration basis. That would be one based on either different rates or a percentage of the amount recovered (plus disbursements).

We can (and do) recover debts greater than £100,000, but we’ll agree bespoke terms with you for those matters.

 


 

If you would like to find out more about our fees or service, and how we can support you with your needs, please do not hesitate to contact us.