Costs information for businesses for the recovery of debts of up to £100,000
Our dedicated debt recoveries service recovers business debts from businesses or individuals. We charge scaled fixed costs for non-disputed or non-defended debt collection processes through the English & Welsh Courts so that you have a degree of cost certainty from the outset.
The costs information below relates to our typical fixed costs for the recovery of unpaid invoices for goods or services which are:
- Owed by businesses or individuals located in England and Wales
- Arise under a written contract and are not disputed by the debtor
- Not governed by the Consumer Credit regulations
- To be pursued through the English courts
If we do not consider that your debt is one to which our fixed fees apply, we will let you know and will provide you with a separate costs estimate for your case. Please note that we reserve the right to agree specific fee terms for specific business clients, depending on their specific needs and circumstances, which may be different to the typical fixed costs set out below.
The costs information below does not, in any event, apply to the following:
- The issue of Statutory Demands for a debt under the Insolvency Act 1986.
- More complicated debts, for example where significant investigation or consideration has to be carried out at the outset or during a claim as to the legal and/or factual basis of the claim.
- The debtor is located in another jurisdiction or the debt has to be pursued in the courts of another jurisdiction.
- The debt is disputed at any point by the debtor.
- The debtor raises a counterclaim against you which it seeks to set-off against the debt.
- Debts covered by the Consumer Credit regulations, The Housing Grants, Construction and Regeneration Act 1996 or is for rent/service charges payable under a lease/tenancy or is subject to any other specific regulatory regime.
- Drawing up a settlement agreement.
- The enforcement of a judgment debt if it is not paid promptly by the debtor.
If your debt is not covered by our fixed costs regime below, we will let you know and we will agree with you a scope of work and an estimate of costs, which will usually be based on an hourly rate.
We explain below the standard debt recovery process and our standard fixed costs in relation to each step.
Stage 1: Pre-action
We are required to send the debtor a letter before action which sets out the details and amount of the claim. If the debt is due from a company, it will usually ask for payment of the debt within 7 days (unless we consider more time is appropriate in the circumstances). If the debt is due from a person, or sole trader, the Pre Action Protocol for Debt Claims requires a minimum of 30 days to be given first, and may be extended further if information is requested or a payment proposal is made.
Our typical fixed fee for a basic standard letter before action is £40 plus VAT charged at 20% (£48 in total) to companies / partnerships and £70 plus VAT charged at 20% (£84 in total) to individuals and sole traders. This assumes you provide us with all the necessary information and documents about the debt, we do not have to conduct a detailed investigation into the background and we do not need to have an initial meeting with you to discuss the case. If we are required to take steps to trace the debtor, a tracing agent’s fee for a desktop-based trace is typically in the region of £70-100 plus VAT charged at 20% (£ 84 - £120) in total), and is usually on a no-trace no-fee basis. If a more detailed trace is required, these costs may be higher. If we are required to conduct a search of HM Land Registry to check a property owned by a debtor, a search fee of £6 plus VAT charged at 20% (£7.20) per property title searched is typically payable.
If, as a result of the letter before action, we are required to communicate with the debtor or a third party, for example to provide further information or documents requested or to consider/negotiate a settlement or instalment plan, then our fixed communication fee set out below will apply to each communication, unless the matter becomes more complicated in which case we reserve the right to charge an hourly rate (although we will discuss this with you first).
Stage 2: Issuing court proceedings against the debtor
If the claim is not resolved at the Pre Action stage and you instruct us to issue court proceedings against the debtor, we will prepare and issue the claim in the County Court Money Claims Centre. The Court will serve the proceedings by post on the debtor. Our fixed fees for issuing a claim are as follows:
| Claim Value |
Our Fee |
Court Fee |
VAT charged
at 20% |
Total |
| £0.01 – £300.00 |
100.00 |
35.00 |
20.00 |
155.00 |
| £300.01 – £500.00 |
105.00 |
50.00 |
20.00 |
170.00 |
| £500.01 – £1000.00 |
125.00 |
70.00 |
24.00 |
214.00 |
| £1000.01 – £1500.00 |
165.00 |
80.00 |
32.00 |
272.00 |
| £1500.01 – £3000.00 |
165.00 |
115.00 |
32.00 |
307.00 |
| £3000.01 – £5000.00 |
165.00 |
205.00 |
32.00 |
397.00 |
| £5000.01 – £10,000.00 |
190.00 |
455.00 |
36.00 |
671.00 |
| £10000.01-£100,000.00 |
250.00 |
5% of debt claimed |
44.00 |
From £764 to £5,264 |
The Court fee element of the above is subject to change. The time it takes to issue the proceedings and serve them on the debtor depends on how quickly the Court processes the case (typically up to two weeks, but it can be longer).
Stage 3: Entering Judgment in default or on admission
After being served with the Court proceedings, the debtor is required to acknowledge service by sending a form to the Court within 14 days, in which it indicates whether it admits or disputes some or all of the debt. If the debtor admits some/all of the debt, it may ask the Court for an opportunity to pay the admitted sum by instalments and for this purpose provide details of its income and outgoings to assist an assessment of what the debtor can afford to pay. You will be asked whether you agree or dispute the debtor’s instalment proposal and the Court will then decide what is appropriate and make an order. If the debtor disputes any part of the debt, it will then have a further 14 days to prepare and serve a Defence to the claim. If it fails to file an Acknowledgment of Service or a Defence in time, you can apply for judgment in default to be entered for the debt claimed and fixed costs.
Our fixed fees for seeking judgment in default or in relation to a payment proposal on an admitted debt are as follows:
| Step/Claim Value |
Our Fee |
Court Fee |
VAT charged
at 20% |
Total |
| (a) In default of acknowledgement of service being filed by debtor |
|
|
|
| £0.01 – £5000.00 |
26.00 |
– |
5.00 |
30.00 |
| £5000.01 + |
36.00 |
– |
7.00 |
42.00 |
| (b) In default of defence being served by debtor |
|
|
|
|
| £0.01 – £5000.00 |
31.00 |
– |
6.00 |
36.00 |
| £5000.01 + |
42.00 |
– |
8.00 |
48.00 |
| (c ) On debtor’s admission (and accepting debtor’s offer of payment terms) |
|
|
|
| £0.01 – £5000.00 |
46.00 |
– |
9.00 |
54.00 |
| £5000.01 + |
62.00 |
– |
12.00 |
72.00 |
| (d) On debtor’s admission (but rejecting debtor’s offer of payment terms) |
|
|
|
| £0.01 – £5000.00 |
62.00 |
– |
12.00 |
72.00 |
| £5000.01 + |
77.00 |
– |
15.00 |
90.00 |
The Court fee element is subject to change. In most cases, the Court decides whether to grant judgment on the papers before it, without the need for a hearing. However, sometimes the Court may decide that a hearing is more appropriate before it decides on, for example, an appropriate instalment plan. The above fixed fees do not include any such hearing. In that scenario, we would provide you with an estimate of costs, which will depend on in which court the hearing takes place, whether evidence is required to be prepared for it and how long it is estimated to take.
If judgment is granted, the Court will usually serve the judgment on the debtor by post. The above fees assume the Debtor then pays the judgment debt promptly. They do not therefore include advising you on options for enforcing the judgment in the event that it is not paid nor taking enforcement action. The minimum amount of time it can take to apply for judgment in default is, in theory, 14 days after the Claim Form has been deemed served (if the debtor has not acknowledged service or admits only some of the debt) or 28 days if a defence is not served. However, in practice it ultimately depends on how quickly the Court processes the paperwork and supplies us with a copy of the Acknowledgement of Service, statement of means or Defence filed by the debtor, which is out of our control and can range from a few days after these periods to a few weeks. Applying for judgment in default or on admission, is not an option where the debtor serves a defence.
Correspondence/Communication fees in Stages 1 to 3
During stages 1 to 3, we may be required to communicate with the debtor, their representatives, or third parties about the matter, and also with you to take your instructions on any matters arising. This may happen, for example, where the Claim Form is returned unserved, or the debtor seeks more information about the debt, or more time to comply or they make payment/settlement proposals for agreement. Provided that the debt remains undisputed, our fixed fees for each additional communication by or to us are as follows:
| Communication type |
Our Fee |
Court Fee |
VAT charged
at 20% |
Total |
| Payment/letter/email in |
10.00 |
– |
2.00 |
12.00 |
| Telephone call in/out |
12.00 |
– |
2.40 |
14.40 |
| Letter/email out |
15.00 |
– |
3.00 |
18.00 |
The above fixed fee does not cover the preparation of a more complicated settlement agreement, or a consent order for the court’s approval. If this is required, we can provide an estimate of costs which will be based on hourly rates.
Stage 4: The debtor serves a Defence
If the Debtor serves a Defence to the claim and the debt becomes a contested debt which will then ordinarily proceed to a trial, our fixed fees will no longer apply. In that event, we will provide you with a separate estimate of costs for future work which will be based on an hourly rate. The time it can take to proceed all the way to a trial cannot be accurately predicted as it depends which court deals with it, how busy that court is and what procedural steps the court decides to require the parties to complete before a trial. If you lose your claim, you will usually be ordered to pay some/all of the debtor’s legal costs of defending your claim, unless your claim is in the Small Claims Court (i.e. under £10,000).
Stage 5: Enforcement of an unpaid judgment
We can also take steps to enforce a judgment against a debtor. There are a range of potential enforcement methods which can be considered, including instructing bailiffs, applying for charging orders over property owned by the debtor, or seeking an attachment of the debtor’s earnings. We can advise you on an enforcement strategy and we can provide fee estimates for this work which will be based on an hourly rate.
Total costs
It is difficult to provide an accurate range of total costs or average costs as it depends on the amount of debt claimed, how it proceeds and the extent of communication with the debtor. No case is the same. On the basis of a standard non-contested debt, using the fixed fees above:
- The total costs of pursuing a debt under £300 to a judgment in default of the debtor acknowledging service, assuming no trace, search or communication fees, could be £240.20 including VAT charged at 20%.
- At the other end of the scale, the total costs of pursuing a debt of £100,000 to a judgment on admission but where an instalment option is offered and rejected, so that the Court needs to decide it on paper, and assuming a trace fee, search fee and 3 communications charges are incurred, could be £5,731.52 including VAT charged at 20%.
- In both scenarios, the number of communications that are required can increase the total fixed fees; similarly, if a court hearing is required. The above costs ranges do not include enforcement of the judgment.
Other important information to know
- The fixed fees above are based on you providing promptly all relevant information, documents and instructions that we may request from you in respect to the debt claimed.
- The expenses (e.g. trace fees, search fees, court fees) are subject to change as it depends on external suppliers. There may be other expenses that become necessary to incur in exceptional cases (e.g. process server fees where personal service on the debtor is required; advocacy fees if there is a hearing), in which case we will obtain an estimate for your prior approval.
- Our fees are payable by you regardless of whether the debt is recovered in full or in part.
- If you are successful in your claim and obtain judgment, the debtor may be ordered to pay some (but not all) of the costs you have incurred with us. The VAT element of our fee cannot usually be reclaimed from your debtor. If you are registered for VAT, the VAT element of our fees may also not be reclaimable from the debtor in any event.
- We will generally require payment up front for court fees to be incurred.
- We invoice our fees monthly in arrears unless your credit rating is such that we request money on account of future costs to be incurred. Our invoices are payable on receipt.
- If proceedings are issued and the matter is defended, the dispute will have to be determined by the Court at a trial, which may take many months. In that case, we would be able to provide you with a costs estimate for future work. If you lose the case and your claim is for more than £10,000, it is likely that you will ordered to pay some of the debtor’s costs. If you decide to unilaterally discontinue your claim, you may be ordered to pay the other side’s wasted costs unless otherwise agreed with them.
Our Team
The partner with overall management responsibility for the Commercial Dispute Resolution team is Ramona Derbyshire. Biographies of the relevant members of the team, including their qualifications and experience, can be found here.
