Debt recovery is the pursuit of an uncontested debt.
We act for individuals and organisations in pursuing and defending debt recovery claims. Whilst we assist in relation to debts of all sizes, this guide is intended to provide details of our likely fees when pursuing a claim for an undisputed debt of £100,000 or less.
Stage One – Pre-Action Protocol Letter
The Civil Procedure Rules, which govern the conduct of litigation in England and Wales, requires efforts to be made to secure any outstanding debt through correspondence. Particularly in cases where a debt is pursued against an individual by a business, it is essential to send a Pre-Action Protocol Letter.
We will draft a standard Pre-Action Protocol Letter which sets out the demand for the outstanding debt on your behalf. This process will extract debt information provided by you, to include (a) the date of the invoice/debt arising, (b) the date the invoice/debt should have been paid, and (c) the rate of interest chargeable under any agreement upon which the debt is based.
We will then carry out the calculation of interest due to include with all relevant information in the Pre-Action Protocol Letter.
We would typically have the Pre-Action Protocol Letter prepared within 2 working days of an instruction to us to proceed, following the coming into force of a client retainer with us.
Our fees letter for preparing this letter will be based on the amount of time we spend preparing the letter, and calculating the interest due, which is typically in the region, (for a case involving 10 invoices with simple interest calculations) of £250 to £400 plus VAT. Typically, this work would take about an hour, and so, with hourly rates of £250 plus VAT to £400 plus VAT applying, this is a broad indication of the costs at this stage.
Stage Two – Commencement of Proceedings
If the Pre-Action Protocol Letter is contested, then the standard debt recovery process will no longer apply, and the matter will be allocated to the appropriate individual in CSK Legal to deal with depend on the nature of the issues raised. Any further work at this point will require a new retainer to be entered into to deal with contested issues.
If the debt is undisputed, then we would prepare a Claim Form and Particulars of Claim. It would take us typically about one working day to prepare a claim form. How long it takes to issue the claim at court depends on the court concerned, and its backlogs, but typically, we would expect a claim to be issued within 3 to 4 weeks of sending it to the court. It may be possible to issue online in some instances, which would be processed by the court almost instantly. Once we receive the claim form back from the court, with a court seal, we would then serve it by post.
Once a claim form is issued, the defendant has 14 days from service upon them of the claim form to file a defence or acknowledge service, such acknowledgment extending the deadline for filing the defence up to 28 days from the date of service of the claim form.
Where no acknowledgment of service or defence is received, we would automatically apply to the court to enter judgment in default on your behalf and without reference to you.
We will prepare a claim form and particulars of claim in relation to an uncontested debt for a fixed fee of £750 plus VAT. There is no additional cost to serve the claim form by post.
There is a cost payable to the HM Courts and Tribunals Service, to issue the claim in court, which is based on the amount of the outstanding debt. The court fees payable change from time to time, but as at October 2023, the fees are as follows:
|Amount of debt
|Up to £300
|5% of sum claimed (£10k max)
Court fees do not attract VAT.
We do not charge a further sum to request Judgment in Default, which we would do automatically, without reference to you, in the event that we receive no response from the defendant.
We will then write to the debtor and enclose a copy of the judgment, demanding payment and threatening enforcement action, at no further charge to you.
If payment is not received as per the judgment terms, which usually requires payment immediately, then we would write to you to advise that enforcement should be considered.
Stage Three – Enforcement
If the debt has not been paid as required by the court, we will write to you and advise that you should consider enforcement options. We will provide you with an standard overview of the enforcement options available, which would include such things as: statutory demand, bankruptcy proceedings, winding up (of a company), third party debt orders, charging orders, and so on. We do not charge you for the provision of this general information.
If you wish to enforce your judgment, then you will need to select an enforcement method. We can advise you which method would be most appropriate for you in any given case, but where we do this, because we receive further instructions from you and consider the underlying options and merits of them, the advise would be charged on an hourly rate basis. Typically, this would take about an hour for us to provide that information, with costs therefore of around £250 plus VAT to £400 plus VAT. We can usually provide specific tailored advice within a two working days of it being requested.
We will then prepare the relevant paperwork to utilise your preferred method of enforcement, and it is possible to use one or more methods at the same time to maximise the prospect of recovery. The preparation of this paperwork would be on an hourly rate basis, and typically, the completion of the relevant application forms to the court takes about an hour, so equating to costs of around £250 plus VAT to £400 plus VAT. We would typically ensure that any enforcement paperwork is prepared within three days of an instruction to us to proceed.
The court has its own fees for enforcement options. These vary depending on the enforcement option, and as at October 2023, are as follows:
Full details of the court fees for all enforcement options and generally may be found here.
The rate of VAT applicable to our costs and expenses (as appropriate) is 20%. VAT is not chargeable on court fees.
We do not believe that there are any services which might reasonably be expected to be included in the prices given above but which are not. It is, for example, not likely that we would wish to instruct counsel to attend to debt recovery matters.
Timing depends entirely upon the process undertaken and the stage at which payment is made. On the assumption that payment is not made and enforcement is required, it could take something in the region of 3 months or so, to secure payment following, for example, the attendance of an enforcement officer from the court. Further, some debts can take the benefit of the breathing space initiative, which can see debt recovery proceedings suspended for a period of time. The typical standards of service from CSK Legal, however, and timing for the various stages are set out in this page in the relevant section.
Where payment is received following a letter or commencement of proceedings, then we would forward this on to you to the account details you provide at the outset of your instruction with us. We would not charge you an additional sum to remit payments save where you require a sum be remitted in excess of £50,000, with such being require the same day, in which case, we may pass on the charge imposed by our bank for a CHAPS fee, typically £30 plus VAT.
Who does Debt Recovery work?
All of the solicitors at CSK Legal Limited carry out debt recovery work. Non-qualified individuals do not carry out any form of debt recovery work.
Full details of the solicitors at CSK Legal carrying out debt recovery work, together with their qualifications and experience, can be found in the overview page of the individuals in the practice here. You have to choice as to whom you with to instruct, subject to their availability and workload, but enquiries should be directed to firstname.lastname@example.org in the first instance and then, if we accept your instruction, the most appropriate individual will be allocated to your instruction.