Debt Recovery costs

 

If your business is owed payment on invoices, it will be having a detrimental impact on your cashflow and financial stability.  We understand that swift and firm action is required in order to recover those debts and allow stability to return.

When working with us to recover your debts there are three stages:

1). Pre- action
2). Court judgment
3). Enforcement

Stage One - Pre action

Once you instruct us to recover your debt, we will discuss with you the details of your claim and review any documentation.  Based on your circumstances, i.e. the size of the debt and the opponent in question, we will advise you on the best course of action.  If appropriate, we will write the initial letter of claim to the debtor to notify them that we intend to begin proceedings to recover the debt.

The time this stage takes will depend on the opponent; if they are an individual they have 30 days to respond to this initial letter, however they do have the right to extend this by another 30 days.  If it is a company they have 7 days to respond with no opportunity to extend the time.

Stage Two - Court Judgment

If, after the initial letter, we do not receive a response or they do not admit the debt is owed, we can, subject to your instructions, proceed to Court proceedings.

When applying to the Court, we will complete the claim form and submit it to the County Court Money Claims Centre (CCMCC).  We will then receive the issue number as well as the notice of issue and the date when the proceedings were served against your opponent – this stage can take up to eight weeks subject to the Court.  The opponent then has 14 days to respond to the claim. 

There are two possible outcomes at this stage; they can admit to the debt at which point the Court would make a judgment for payment.  We will then write to the other side requesting payment.  If they do nothing, the Court would make a default judgment. 

Stage Three - Enforcement

Where payment is not made and enforcement proceedings are due, we can discuss your options as there are several different enforcement methods. 

Our Fees - Single debt to be recovered

Our hourly rates for single debts to be recovered are £190 plus VAT.  The amount charged to recover your debt will depend upon the amount of time spent.

As an example, for Stage One, the fee is likely to be no more than one hour of work at the above hourly rate.

To progress to the end of Stage Two and secure a judgment in an uncontested matter, the additional fee is likely to be no more than three hours of work at the above hourly rate.   Circumstances that may increase this fee can be found in the Disputed Claims section below.

Court fees are also determined by the value of your claim and are currently set at:

 Claim value

 Issue Fee

 Up to £300

 £35

 £300 to £500

 £50

 £500 to £1,000

 £70

 £1,000 to £1,500

 £80

 £1,500 to £3,000

 £115

 £3,000 to £5,000

 £205

 £5,000 to £10,000

 £455

 £10,000 and above

 5% of claim value

 

 

Our Fees - Multiple debts to be recovered

Where you have a number of regular debts to be recovered (numbering at least 20 new instructions per month) then we are able to offer pricing in the following way:

Stage One – Pre action

For this initial stage, there is a fixed fee price of £50 plus VAT to send the initial letter to the other side to notify them of the debt owed.  If, after this letter has been sent, there is no response from the opponent and you decide you do not wish to proceed then there are no other charges payable.  If we recover payment there is then an additional 10% payment to us of the monies recovered, up to £500. 

Stage Two – Court judgment

Our fees to complete Stage Two are as below:

 Claim value

 Our fee on successful outcome

 Our fee on unsuccessful outcome

 Up to £1,000

 £200

 £150

 £1,001 to £3,000

 £300

 £200

 £3,001 to £10,000

 £400

 £250

 £10,0001 and above

 £750

 £375

Please note our fees as shown are exclusive of VAT, which would need to be paid on top.

Court fees are also determined by the value of your claim and are currently set at:

 Claim value

 Issue Fee

 Up to £300

 £35

 £300 to £500

 £50

 £500 to £1,000

 £70

 £1,000 to £1,500

 £80

 £1,500 to £3,000

 £115

 £3,000 to £5,000

 £205

 £5,000 to £10,000

 £455

 £10,000 and above

 5% of claim value

Stage Three – Enforcement

We would charge a £75 fixed fee per enforcement (plus VAT).  The High Court Enforcement Officer would also charge fees in the event of an unsuccessful recovery, which would be an abortive fee of £75 (plus VAT).

For all claims there may also be interest and Late Payment Compensation payable; if this is the case you will keep the interest that is paid, while we will keep the Late Payment Compensation which is payable as below:

 Debt amount

  Compensation payable*

 Under £1,000

 £40

 Under £10,000

 £70

 Over £10,000

 £100

*Please note this amount is payable per invoice.  For example, if you are due payment on 4 invoices of £400, totalling £1,600, your Late Payment Compensation would be £160 (4 x £40) opposed to £70.

Costs example

As you can see, the total cost of attempting to recover your debts is variable depending on the size of your claim.  In order to summarise, we have provided a working example below based on an undisputed claim with a total debt of £2,500 from one invoice.  While this debt is from one invoice, it is one of a series of debts to be recovered over a month, therefore the multiple debts to be recovered fee structure applies.  The Court fees in this case, which are payable by you, would be £115 and would be recoverable on a successful outcome:

If successful recovery of the debt after the initial stage only:

  • £50 fixed fee (plus VAT)
  • £250 (plus VAT) – 10% uplift of the total debt
  • Total payment = £360 (including VAT)

In this situation you will have recovered your debt and retained £2,140 of the same.  You would also retain any interest on the payment, while we would retain the Late Payment Compensation of £70.

If successful recovery after judgment is made by the Court:

  • £300 charge based on successful outcome (plus VAT)
  • Total payment = £360 (including VAT)

In this situation you will have recovered your debt and retained £2,140 of the same.  You would also retain any interest on the payment, while we would retain the Late Payment Compensation of £70.

If successful recovery only after enforcement is required:

  • £300 charge based on successful outcome (plus VAT)
  • £75 enforcement fixed fee (plus VAT)
  • Total payment = £450 (including VAT)

In this situation you will have recovered your debt and retained £2,050 of the same.  You would also retain any interest on the payment, while we would retain the Late Payment Compensation of £70.

Our Fees - Bulk Instructions

Where you have a bulk of regular instructions (numbering at least 50 new instructions per month) then we are able to offer a bespoke pricing package based on the multiple instructions model, but at a lower rate at every stage. Please contact Brian Kirby, Head of Debt Recovery, to discuss your requirements.

Disputed Claims

After the issue of proceedings the debtor may dispute the claim and make a counter claim, at which point additional fees would be applicable based on our hourly rate structure set out below. 

Helen Porter is the Partner of our Litigation and Dispute Resolution department, while Brian Kirby is Head of Debt Recovery, supported by Hayley Steer.  In the majority of cases you will be working with Brian and Hayley, however there are additional members of the department who can assist in specific cases, for example if the matter also involves property or the debt is disputed.

 Team member

 Hourly rate (excluding VAT)

 Helen Porter 

 £250

 Torion Bowles 

  £230

 Brian Kirby 

 £190

 Daniel Coleman 

 £180

 

If your business is owed payment on invoices and you are interested in finding out more about how we can secure payment swiftly, you can contact Brian Kirby by calling 023 8071 7421 or email briankirby@warnergoodman.co.uk.

"Brian could not have been more helpful, professional and he gave us the right advise from start to finish."

“It is always a pleasure dealing with Warner Goodman, and Brian is always very helpful and polite – as well as dealing with our instructions within a day of receiving them.  Excellent service.”

“All of your staff who we’ve had dealings with are extremely approachable & helpful.  Brian Kirby is excellent, he is totally professional, but also pragmatic. He handles things speedily & efficiently. It is a great pleasure to work with him.”

To speak to one of our experts please call us