Debt Recovery Fees
Here at Mitchell Wilde we offer a debt recovery service. The costs set out below apply where your claim is in relation to an unpaid invoice which is not disputed and enforcement action is not needed. 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 required), or an hourly rate if more extensive work is needed.
Our general fees for obtaining a County Court judgment in undisputed debt claims are set out below.
Often we advise our clients that a County Court judgment is not the best way to collect a business to business debt, and that there are quicker methods, which have a very high success rate.
To send an initial letter before action relating to unpaid invoices (where the contractual position is clear), and to report back:
|First letter before action||£70 plus VAT|
|Debt pre-action protocol letter/second letter before action||£100 plus VAT|
To issue a claim form and report back:
|Value of your claim||Our fees||Court fee|
|Up to £5000||£500 plus VAT||£25- £205|
|£5,000-£10,000||£500-750 plus VAT||£455|
|£10,000-£100,000||£750-1000 plus VAT||5% of claim value|
Our fees include
- Taking instructions and reviewing invoices (but not advising on possible contractual or other disputes)
- Sending a letter before action
- Receiving payment and sending it on and, where payment is not made, drafting and issuing claim form
The above quoted fees do not include:
- Where no Acknowledgment of Service or Defence is received, applying to the court to enter Judgment in default; or
- When Judgment in default is received, writing to the other side to request payment.
If at any point we enter into correspondence with the debtor or are instructed to carry out work outside of the standard debt recovery structure as detailed above, for example when intention to defend the claim is received or a defence is filed, our charges will be based upon the time spent on the matter, generally at the rate of £225 plus VAT per hour.
Late Payment fees and interest
Where appropriate, in the case of business-to-business debts, we will look to recover interest pursuant to the Late Payment of Commercial Debts (Interest) Act 1998 (“the Act”) which is currently set at 8% above the Bank of England base rate. Interest is due from the date the account became overdue until the date of payment. Where the above interest is claimable we will also seek to recover any fixed sums due under the Act. Fixed sums are calculated on each debt (i.e. each unpaid invoice) as follows:-
Where the debt value is less than £1,000 the fixed sum claimable is £40
Where the debt value is between £1,000 – £10,000 the fixed sum value is £40
Where the debt value is between £10,001 or more the fixed sum is £100
Reasonable costs of collection (“costs”) are also claimable where Late Payment of Commercial Debts (Interest) Act 1998 applies. These are claimed at 5% of the debt balance with a minimum charge of £50. Where interest and fixed sums are recovered, these will be paid to you. Where costs of collection are recovered, they will be charged to you in addition to any fixed sums payable.
Defended Debts of Over £10,000 and Claims of Over £50,000 but not Exceeding £100,000
For details of Court issue fees payable, please see above. If a defence to the claim is filed, the claimant must also pay a trial fee, which are either £545 or £1090, depending on the ‘track’ the claim is allocated to.
Typically, a defended fast track claim can cost £8,000 to £10,000 plus VAT and disbursements such as Counsel’s fees.
Typically, a defended multi track claim can cost £20,000 to £30,000 plus VAT and disbursements (such as counsel’s fees).
In our experience, pre-action work including trying to negotiate a settlement and preparing to issue proceedings can take up to 3 to 4 months. Defended cases are usually concluded within 12 to 18 months of the date of issue of proceedings.
Our hourly rate for defended debts is £225 plus VAT per hour.
Where insolvency proceedings are to be pursued, we will agree the basis upon which our costs of the proceedings will be charged, before proceedings are commenced.
The court fees and trial fees quoted above are correct at the date of typing, however they are subject to change in accordance with HMCTS guidance.
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