Low Value Debt Recovery Service

WE ARE REQUIRED BY THE SRA TO PROVIDE THE FOLLOWING COSTS INFORMATION IN RELATION THE SPECIFIC SERVICES OUTLINED BELOW.

FOR INFORMATION ABOUT THE FULL RANGE OF SERVICES WE OFFER, PLEASE CLICK HERE. FOR INFORMATION ABOUT HOW WE CHARGE FOR OUR OTHER SERVICES PLEASE CONTACT THE RELEVANT TEAM.

For debts under £100,000, we offer a tailored low value debt recovery service.

This service is carried out by our Litigation & Dispute Resolution Team, which is well versed in recovering disputed and undisputed debts.

Value Added Tax (VAT)

All references to ‘VAT’ are intended to refer to Value Added Tax. That is an additional sum ordinarily levied for services provided and is calculated on a % basis of the sum being invoiced (as applicable, at the relevant invoice date). Currently, the VAT rate is 20%.
VAT is not payable if you (or your company) are located outside of the United Kingdom.

Fees Information

We offer flexibility as to how you pay for our services. We can agree fixed fees or, if you prefer, we can charge on an hourly basis (see below our charge out rates).

Typically, for recovery of an undisputed debt for a value under £100,000 we will charge in the region of £2,500 to £15,000 (plus VAT) and any appropriate Court fee (see below) (excluding enforcement and any work post-winding up/bankruptcy).

The length of time it takes to recover an undisputed debt depends, in part, on the attitude that the debtor takes to paying back the debt. However, typically, it will take:

• 3 to 6 months to obtain a judgment in your favour (through issuing and serving a claim, where no acknowledgement of service or defence is filed and/or served and subsequently applying for default judgment).
• 3 to 4 months to obtain an order the debtor be wound up/made bankrupt. (Note, you can only apply for a company to be wound up if it owes you over £750, and you can only apply for an individual to be made bankrupt if they owe you £5,000 or more)

If you obtain a judgment in your favour, the debtor will then have a short period (usually 14 days) within which to pay the debt. If they don’t do so, you would be entitled to take enforcement action (e.g. through taking control of the debtor’s goods, a charging order over the debtor’s assets, or an attachment of earnings order).

If an order is made that a debtor be wound up/made bankrupt, the debtor’s assets will be collected by a liquidator/trustee in bankruptcy and distributed between the creditors. This can be a time-consuming process and, typically, creditors will only recover a percentage of the debt that they are owned. Sometimes, a debtor will not recover any money at all.

Recovery of a disputed debt may cost more than recovery of an undisputed debt, but we will always seek to ensure our fees are commensurate with the value you are seeking to recover. We do this by ensuring that the bulk of debt recovery work is carried out by our more junior lawyers, under the careful supervision of our more senior lawyers and partners.

Please note, if you succeed in recovering your debt, you will typically be entitled to recover a proportion of your legal fees and disbursements from the debtor (depending on which track your claim is allocated to).

Disbursements

Please see below a non-exhaustive list of the disbursements you may need to pay, in order to recover a debt:

• Process Server Fees

For undisputed debts, the best first step will often be to serve a statutory demand on the debtor.

We will usually instruct a process server to serve the statutory demand. Typically, process server’s fees will be in the region of £250 plus VAT (depending on the type of service you require i.e. standard or priority service).

• Counsel’s Fees

Depending on the value of the debt (and whether it is disputed or not), we may wish to instruct Counsel (i.e. a barrister) on your behalf (and with your approval) to assist with tasks such as drafting pleadings and conducting advocacy in the courtroom.

Counsel’s fees vary. However, we will always seek to ensure that Counsel’s fees are commensurate with the value you are seeking to recover.

Please note, VAT would be payable on Counsel’s fees.

Charge-out rates

The hourly rates we charge for debt recovery work (assuming that no fixed-fee is agreed) range between £175 and £485 per hour (plus VAT), depending on the level of experience of the fee earner dealing with the work.