Personal and Business Legal Services in Solihull

Debt Recovery for Businesses

Debt Recovery for Businesses – Up to the value of £100,000

The costs in recovering outstanding debts vary depending on the value of the outstanding amount. In the majority of cases you will have already spent time and money chasing your debt, and our aim is to provide you cost effective advice to recover the unpaid debt as soon as possible.

On the basis the debt is uncontested, we can offer a cost effective process to recover the debt as quickly as possible.

Initiating Court Proceedings

The most effective way of recovering an unpaid debt is to issue a Letter Before Action against the Debtor. This will set out in clear terms the debt owed and the consequences should the Debtor fail to pay. At the point a Letter Before Action is sent the debt is past due and interest will have begun to accrue on the unpaid amount. If you are recovering a debt from a business there will also be a late payment penalty due by way of compensation. Interest and any compensation due from the Debtor will be set out in the Letter Before Action and added to the total debt.

If no response is received from the Debtor following the Letter Before Action or the Debtor disputes the debt, the next step will be to send a Claim Form to Court. The Claim Form will be issued by the Court and a copy sent to the Debtor. If the Letter Before Action has been ignored it is usually the case that the Debtor will also ignore the Claim Form. Should this be the case we can then apply for Default Judgement on your behalf for the amount of the debt, plus interest and costs. The Court will then make a Court Order that the Debtor is responsible for the amount set out in the application for Default Judgement.

If the Debtor chooses to defend the claim this will result in contested proceedings. The Court will list a future hearing and along with directions, such as filing of witness statements and any expert evidence used to support the claim. Whilst it is usually the case that only one hearing is necessary the Court may list additional hearing(s) depending on the nature of the dispute.

Obtaining a Court Order

When you have obtained a Court Order for the debt, whether this is following an application for Default Judgment or through contested Proceedings, you will have to consider how to enforce the Court Order if the debtor still refuses to pay. Please contact the Dispute Resolution Team and we shall provide you further information about the methods of enforcement and the costs involved.

Costs of a Letter Before Action

Our charge for issuing a Letter Before Action for an uncontested debt is £100 + VAT.  If we are instructed to pursue a number of unpaid debts, we will discuss a reduced cost per letter, with you.

Costs for Issuing a Claim Form

Our charge for issuing a Claim Form is £175 + VAT.

You will also be required to pay us the Court fee to issue your Claim Form. The amount of the Court fee is dependent on the size of the debt. For debts of up to £10,000 the Court fee will range from between £35 – £455. If the debt to be recovered exceeds £10,000 the Court fee will be 5% of the debt.

Costs applying for Default Judgement

Our charge for apply for Default Judgement is £50 + VAT.

Contested Proceedings

If the debtor defends the claim, then the work required to deal with the matter will be more involved.  The total costs will depend on the complexity of the issues raised, whether any Expert Evidence is required and the value in dispute.

Our charges preparing for a hearing will be in the region of £500 + VAT to £2,500 + VAT. The work involved preparing for a hearing is dependent upon the value of the Claim, the complexity of the issues, the number of Court Directions to observe and other intrinsic factors.

There will be additional costs for you to consider in addition to our charges, these include Counsel’s fee to represent you at the hearing and any expert evidence needed from third parties. If there are additional hearings listed then the cost estimate as above should be used as a guideline.

In matters were the debt sought is less than £10,000, other than recovery of the Court fee you are unlikely to be able to recover the entirety of your legal fees in addition to the debt.  We will provide you with advice at an early stage whether the costs associated with recovering the debt through the Courts would be commercial, given the level of debt.

Debt Recovery matters will be dealt with by one of our qualified Dispute Resolution Solicitors, or a combination:

Nicholas Thomas (PQE 10+ years) £225 + VAT per hour

Stephanie Howard (PQE 3 years) £175 + VAT per hour

Lee McAuliffe (PQE 2 years) £175 + VAT per hour

Our experienced support staff will also work on the matter for at relevant points.  Support staff are charged at £130 + VAT per hour.

As with all matters, we would be happy to arrange an initial free discussion in order to understand your position and to provide more tailored estimates of costs.  Please call our Dispute Resolution Team on 0121 270 2700 to discuss your requirements.