Debt Recovery and Pricing Information

Recovering debt is a widespread problem in a business where you have done all the challenging work, and you are still waiting to be paid.

Recovery of debt can take form in many different ways. Depending on the circumstances it may involve engaging in pre-action protocols, issuing a statutory demand, presenting a winding-up petition, issuing court proceedings, obtaining a county court judgment, or issuing bankruptcy proceedings.

We can help to identify the best course of action to achieve the best possible results. We advise businesses and individuals with all stages of debt recovery.

Pricing for debt recovery up to £100,000

This guidance will provide you with information about the basis of our charges for debt recovery work (where the value of the debt is up to £100,000 and the debtor is based in England and Wales). We set out below:

  • The total costs (or an average or a range of costs where it is not possible to provide the total costs)
  • The disbursements you may incur
  • An explanation of the services we provide for the quoted price (in respect of key stages of the debt
    recovery process)
  • Information on the key stages of the debt recovery process (including likely timescales)

Each case is unique, and a range of factors may affect the total cost for the instruction and/or the timescale for the mater to reach conclusion.

Court Claims

These costs apply where your claim is in relation to an unpaid invoice (business to business) which is not disputed, and enforcement action is not needed. If the other party (the debtor) 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.

Anyone wishing to proceed with a claim should note that:

  • The VAT element of our fee cannot be reclaimed from your debtor if you as the client is registered for VAT or on the recovery of the fee ordered by the court.
  • Interest and compensation may take the debt into a higher banding, with a higher cost.
  • The court fee more if it is not issued through Money Claims Online.
  • Not all of our fees are recoverable from the debtor.
  • The costs quoted above are not for matters where enforcement action, such as the bailiff, is
    needed to collect your debt.

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 a claim. Where no Acknowledgment of Service or Defence is received, applying to the court to enter Judgment in default.
  • When Judgment in default is received, write to the other side to request payment.
  • If payment is not received within 14 days, providing you with advice on the next steps and likely
    costs.

Matters usually take 4-8 weeks from receipt of instructions from you to receipt of payment from the other side, depending on whether or not it is necessary to issue a claim. This is on the basis that the other side/debtor/defendant pays promptly on receipt of Judgment in default. If enforcement action is needed, the matter will take longer to resolve.

Pre-issue

1a. Letter Before Action
This stage involves an initial review of documents, drawing the Letter Before Action, considering any response from the debtor and providing advice as to next steps. We aim to send the Letter Before Action to the debtor within five working days of receiving all required information. Depending on whether the debtor is a company or an individual they will have between7-21 days to respond and we will provide our advice to you within five working days of receiving the debtor’s response.

Debt ValueDisbursementOur Fee
(excl VAT)*
Total Fee
Estimate*
Time Estimate
Up to £100,000.00N/A£150.00 to
£390.00
£150.00 to
£390.00
8 weeks from date
of instruction
*(Our fees are subject to VAT. The prevailing rate of VAT is 20%, however please note that it is subject to change, but we endeavour to provide any updates.)

1b. Pre-issue discussions/negotiations
Any negotiations with the debtor after advising on the response to the Letter Before Action (by telephone, post and/or email) and prior to the issue of Court proceedings will be charged at the appropriate hourly rate. We would not anticipate that pre-issue discussions/negotiations would exceed 2-3 hours of time over a period of 4 weeks should they be required.

Debt ValueDisbursementOur Fee
(excl VAT)*
Total Fee
Estimate*
Time Estimate
Up to £100,000.00N/A£390.00 to
£590.00
£390.00 to
£590.00
4 weeks
*(Our fees are subject to VAT. The prevailing rate of VAT is 20%, however please note that it is subject to change, but we endeavour to provide any updates.)

This does not include the cost of monitoring compliance with any repayment plan that may be agreed with the debtor.

2. Post-issue
If the debtor does not respond to the Letter Before Action or disputes the debt and negotiations
breakdown then County Court proceedings can be commenced to encourage the debtor to make payment, to engage further in negotiations or to seek recovery via the court process. Please note that once County Court proceedings are issued then it can take 12 – 18 months for the Court to list the mater for a final hearing. We outline below the other debt recovery methods available (including winding up or bankruptcy proceedings and the service of a Statutory Demand).

2a. Issuing a Claim Form
Issuing a Claim Form via Money Claim Online (on the assumption that the preparation of the claim is straightforward and submitted online via the Court’s Money Claim Online Service).

Debt Value Court Issue Fee Our Fee (excl VAT)* Total Fee Estimate* Time Estimate
Up to £300.00 £35.00 £170.00 £205.00 Within five
working days of
instruction and
receipt of all
required information.
£300.00 to £500.00 £50.00 £170.00 £220.00
£500.00 to £1,000.00 £70.00 £170.00 £240.00
£1,000.00 to £1,500.00 £80.00 £170.00 £250.00
£1,500.00 to £3,000.00 £115.00 £170.00 £285.00
£3,000.00 to £5,000.00 £205.00 £170.00 £375.00
£5,000.00 to £10,000.00 £455.00 £170.00 £625.00
£10,000.00 to £100,000.00 5% value of the claim £170.00 To be confirmed on the value of the claim.

(the prevailing rate of VAT is 20% however please note that it is subject to change, but we endeavour to provide any updates)

2b. Defence
If the Defendant files a Defence to the claim then the mater may be passed to a Solicitor in our Dispute Resolution team, at which point you will be provided with a quote for our fees so that you can consider whether the mater would be economical for you to pursue and advised as to prospects of success based on the information contained within the Defence. The following Court Fee would apply if the mater proceeded to a final hearing:

Debt Value Court Fee Time Estimate
Up to £300.00 £25.00 12 to 18
months to
reach a final
hearing
£300.00 to £500.00 £55.00
£500.00 to £1,000.00 £80.00
£1,000.00 to £1,500.00 £115.00
£1,500.00 to £3,000.00 £170.00
More than £3,000.00 £335.00

2c. Judgment
If the debtor does not respond to the claim within 14 days of service of the Claim Form or admits to the whole claim, then you can request that the Court enter Judgment against the debtor. We would normally expect the Court to enter Judgment against the debtor within 1- 2 weeks form the date that Judgment is requested.

Debt Value Disbursement Our Fee (excl VAT)* Total Fee Estimate* Time Estimate
Up to £100,000.00 N/A £120.00 £120.00 1-2 weeks from date of request

*(Our fees are subject to VAT. The prevailing rate of VAT is 20%, however please note that it is subject to change, but we endeavour to provide any updates.)

This does not include the cost to deal with any application to set aside judgment the debtor may issue. Any cost associated with that will be charged on an hourly rate basis and the mater will be passed to a Solicitor in our Debt Recovery team.

3. Enforcement
If the debtor fails to make payment of any Judgment against them, it can be enforced using the following methods:

Enforcement Action Disbursements Our fee (excl VAT)* Total Fee Estimate* Time Estimate
Charging Order Land Registry Search Fee
Court Fee
Registering Interim Charging Order
£3.00
£110.00
£40.00
£210.00 £363.00 Approx. 12 weeks
County Court Bailiffs Court Fee £83.00 £210.00 £293.00 Approx. 6 to 12 months
High Court Enforcement Court Fee for obtaining Writ of Control (valid for 12 months)
Abortive fee if Unsuccessful
£71.00
£75.00**
£210.00 £291.00 to £356.00 Approx. 3 to 9 months
Application for Third Party Debt Order Court Fee £119.00 £210.00 £329.00 Approx. 3 to 6 months
Attachments of Earnings Order Court Fee £119.00 £210.00 £329.00 Approx. 3 to 6 months
Application to call the debtor into Court for questioning Court Fee
Bailiff service of Order
£59.00
£119.00
£210.00 £388.00 Approx. 3 to 6 months

*(Our fees are exclusive to VAT. The prevailing rate of VAT is 20%, however please note that it is subject to change, but we endeavour to provide any updates.)
**(Exclusive to VAT. The prevailing rate of VAT is 20%, however please note that it is subject to change, but we endeavour to provide any updates.)

Please note that the above fees are on the assumption that the debtor does not contest any enforcement action taken. Increased fees (on an hourly rate basis) may apply where the debtor contests the enforcement action taken and the Court lists the mater for a hearing. Enforcement action usually takes in the region of 3-6 months.

Please also note that the above fees do not include costs to negotiate with the debtor if, after the commencement of enforcement action, they wish to reach an agreement on payment. In those circumstances any negotiations will be charged at the appropriate hourly rate. We would not anticipate that such negotiations would exceed 2-3 hours of time over a period of 4 weeks should the debtor engage and be forthcoming with information about their financial circumstances.

We cannot guarantee that enforcement action will lead to payment of the judgment debt, which will depend upon the asset position of the debtor.

4. Insolvency Proceedings
This is an alternative method of debt recovery. It can be used either instead of the issuing of a County Court claim or as an alternative to the enforcement methods set out above once judgment is secured. It will only be appropriate to utilise the insolvency methods outlined below to seek to recover sums owing if the debt claimed is not disputed.

Costs will vary depending on the action taken:

Insolvency Action Disbursements* Our Fee* Total Fee Estimate* Timescale
Statutory Demand Process server fee to personally serve the Statutory Demand: £175.00 £570.00 to £955.00 £745.00 to £1,130.00 We aim to instruct the Process Server to serve the Statutory Demand within five working days of receiving all required information.
Bankruptcy Proceedings Process Server fee to personally serve the Statutory Demand: £175.00
Bankruptcy Search: £2.00
Court Issue Fee: £302.00
Official Receiver Deposit (refundable if the petition is dismissed or withdrawn): £1,500.00
Process server fee to personally serve the Bankruptcy Petition: £175.00
Advocate Fee to attend hearing of undisputed Bankruptcy Petition: £115.00
£1,425.00 to £2,000.00 £3,694.00 to £4,269.00 Once a Statutory Demand is issued it can take between 2 – 3 months for a bankruptcy hearing to take place.
Winding-Up Proceedings Company Winding-Up Search: £5.25
Court Issue Fee: £302.00
Official Receiver Deposit (refundable if the petition is dismissed or withdrawn): £2,600.00
Advertising in London Gazette: £109.20
Process Server Fee to personally serve the Winding-Up Petition: £175.00
Advocate Fee to attend hearing: £250.00
£1,425.00 to £2,000.00 £4,866.45 to £5,441.45 Once a Petition is issued, it can take between 2 – 3 months for a winding-up hearing to take place.

*(All fees are exclusive to VAT. The prevailing rate of VAT is 20%, however please note that it is subject to change, but we endeavour to provide any updates.)

Each cost estimate above does not include any cost that may be associated with dealing with one of the following courses of action that may be commenced by a debtor to seek to delay or defeat the insolvency process:

a) An application to set aside the Statutory Demand.
b) An application to obtain an injunction to restrain the presentation, or advertisement, of a Winding-Up Petition.

If either of the above courses of action are pursued by the debtor, costs will be charged on an hourly rate
basis, and we will provide you with an estimate of our fees.

FRONT ROW LEGAL LTD – 30 October 2023

 
 
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