Although we specialise in undertaking complex litigation and dispute resolution on behalf of our clients, occasionally they ask us to undertake BAU debt recovery against disputed and (more unusually) undisputed debts.
Where we are asked by our clients to recover debts or debt portfolios on their behalf we will work with that client to build a bespoke fee structure for that recovery work.
With any piece of litigation it is very difficult to provide complete certainty in terms of costs because the Court process can be complicated and the costs can increase as a consequence of the detail of the debt and the actions of the other party.
However, in order to provide as much clarity as we can, we set out below the range of our expected costs for Court claims up to £100,000 where the Claim is undisputed. We have assumed that Court proceedings are necessary, where they are not, the costs will be less than set out below. The variations are dependent on the value of the claim as Court fees for claims worth less than £10,000 are staggered.
If the other party 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 needed), or an hourly rate if more extensive work is needed.
For debt value up to £5,000
Court fee £19-£108
Our fee (incl. VAT) £180.00 - £416.00
Total £199.00 - £522.00
For debt value £5,001 - £100,000
Court fee £135
Our fee (incl. VAT) £408.00 - £720.00
Total £543.00 - £852.00
Anyone wishing to proceed with a claim should note that:
- Cost recovery in an undisputed claim is limited to Court fees and fixed solicitors fees of £0-£289.35, depending on the value of the claim, the method of service and the circumstances of the Decree.
- If a claim becomes disputed we will of course advise you of the likely costs that will be incurred and agree substantive costs with you before they are incurred. However, defended cases are difficult to predict and even for claims worth less than £50,000, the costs are likely to be in the region of £5,000-£25,000.
- Cost recovery in a disputed claim is limited and we will of course advise you of the likely costs recover should you be successful.
- The VAT element of our fee cannot be reclaimed from your debtor.
- Interest and compensation may take the debt into a higher banding, with a higher cost.
- The costs quoted above are not for matters which are defended or where enforcement action is needed to collect your debt.
Key stages of the transaction
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 claim.
- Where no Acknowledgment or Defence is received, applying to the court to enter Decree in default.
- If payment is not received, upon receipt of Decree providing you with advice on next steps and likely costs.
How long will it take?
Matters usually take 14 days – 4 months 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 and the speed at which the Court is able to process your application. This is on the basis that the other side pays promptly on receipt of Decree in default. If the claim is defended or enforcement action is needed, the matter will take longer to resolve.
Louise Gould, Legal Director in our Dispute Resolution team, based in Glasgow. Read Louise's profile for more information about her areas of expertise and contact details.
John Paul Sheridan, Partner in our Dispute Resolution team, and head of our Scotland office, is based in Glasgow. Read John Paul's profile for more information about his areas of expertise and contact details.