As part of, or in addition to, other services, we are sometimes instructed to recover debts from third parties.
These claims usually fall into 3 stages, each stage of which will vary in cost and duration according to various factors, in particular (a) whether or not the debtor disputes any part of the claim or process and (b) the complexity of the matter at hand. We always try to bring matters to a satisfactory conclusion as quickly as possible, and matters often settle before trial.
The first stage involves pre-action letters and the issue of the claim. Under the new debt recovery pre-action protocol, before a claim can be issued against an individual debtor or a sole trader, a letter of claim will need to be sent a full 30 days before the claim is issued by the court. Our fee will include taking your instructions. The work may involve tracing the individual who is to be served the claim. The work may involve sending letters of demand and offers of settlement before sending the letter of claim or issuing the claim at the court. This stage may, depending on the circumstances, take as little as 6 to 8 weeks to complete, and can be a lot less if needed (but that generally means more expensive).
The second stage involves taking the case forward to the conclusion of trial. This will involve complying with directions given by the court for the exchange of documents that need to be disclosed, the preparation and exchange of witness statements, the preparation for the trial and conduct of the hearing itself. The time for this stage is dependent on a number of factors, in particular the availability of the court if the matter goes to trial, but 12 to 18 months would be reasonable guide.
The third stage is enforcement, which is necessary if the trial has been successful and the creditor has a judgment from the court requiring the debtor to pay, but the debtor is still refusing to pay. Options at this stage include obtaining a charging order against the debtor, obtaining an attachment of earnings order, instructing a High Court enforcement officer, or serving a statutory demand with a view to a bankruptcy petition to follow. The length of time this takes depends very much on the response of the debtor, and requires patience on the part of the claimant (creditor).
Our costs for each of these stages largely depends on the time taken and the complexity of the work. We will also need to make payments on your behalf (which we call ‘disbursements’).
Examples of the disbursements at each stage are set out below. Please note that these examples are indicative and are not exhaustive. The fees are not set by Rylatt Chubb LLP and may change without notice to this website.
Stage 1 disbursements may include:
- Search fees at the Land Registry £3 per Office Copy of the registered title;
- Trace fees for individuals, normal cost £45 + VAT per search;
- Court fee for claim issue, for claims from £15,000 up to £200,000 this will be 5% of the claim value HM Courts and Tribunals Service form EX50
- Counsel’s fees for opinion and/or drafting particulars of claim if the matter is highly complicated, this might be £3,000 + VAT as an example.
Stage 2 disbursements may include:
- Court fee for applications, usually £255 per order;
- Fee to seal court directions order, £100;
- Fee to obtain summary or default judgment (in the event that the debtor does not respond or defend the claim), usually £100;
- The court hearing fee, see EX50;
- Counsel’s fees for trial, if required, this might be £20,000 + VAT for a 2-3 day hearing.
Stage 3 disbursements may include:
- Court fee for debtor to attend court for questioning, £55;
- Court fee to obtain an attachment of earnings order, £110;
- To obtain a writ of control (to begin High Court enforcement officer proceedings), £66;
- Cost of High Court enforcement officer (£75 + VAT if no debt is recovered);
- Court fee to enter a creditor’s petition (to make debtor bankrupt), £280.
Virginia Rylatt and Francis Chubb charge between £300 and £400 per hour, plus VAT. Both Virginia and Francis have significant experience, and between them over four decades of practice, in dispute resolution, including debt recovery. Francis has dealt with over 50 cases involving European Orders for Payment alone.
For an example of a simple and uncomplicated claim, see A SIMPLE CASE – A Debt recovery of £27,000: We charged £2,200 plus VAT and disbursements.