Debt Recovery: Range of Estimated Fees

Debt Recovery Costs

Most contractual disputes will involve damages, indebtedness or both. Claims for sums due under an invoice can often be complicated by a variety of defences, which can range from arguments over the meaning of a contractual term to disputes concerning the level of performance rendered in relation to the sum claimed, or cross-claims made by the debtor.  Where a claim is likely to be disputed, or where the other party disputes your claim at any point, we will discuss the work required and provide you with information concerning estimated costs to the extent practically possible, and/or an hourly rate if more extensive work is needed. We provide information on what to expect in relation to litigation costs in our terms prior to you instructing us.

In some cases, there is no attempt made to defend the claim and the debt is considered undisputed. Where proceedings are  issued before payment of an undisputed debt is made, and such proceedings are not defended, we can better estimate the costs involved.  However, it is not possible to be definitive on this until after the issue of proceedings as when the claim is lodged with the court it is an unknown factor as to whether the other party will admit, ignore or defend the claim

Costs are based on our hourly rates, which, depending upon the qualification, experience and seniority of the fee-earner(s) engaged in the work and the type of work involved, will range from £140.00 to £450.00, exclusive of VAT.  For some specific tasks, it might be possible to offer a fixed or capped fee because the time and complexity is understood at the outset, is predictable and is within our control. Such fixed or capped fees are generally calculated with reference to an hourly rate or rates. Please note that, unless you are exempt, e.g. because you are domiciled overseas, you will need to pay UK VAT in addition to the fees, and the estimates for our legal fees given on this page are exclusive of VAT.

Where a claim is made for an undisputed debt and the claim is undefended, we estimate the following costs:

Value of Claim Issue Fee Payable to Court Estimated Legal Fees ((ex.VAT)
Up to £5,000.00 £35.00 to £205.00 £750.00 – £1,500.00
Greater than £5,000.00 but no more than £10,000.00 £455.00 £1,250.00 – £2,500.00
Greater than £10,000.00 but no more than £100,000.00 5% of the value of the claim £2,500.00 – £15,000.00

The adjacent costs estimates represent the typical estimated cost of the preparation and issue of a claim in the County or Hight Court. This includes:

  • Taking your instructions and reviewing documentation;
  • Undertaking any appropriate searches;
  • Sending a straightforward letter of claim, i.e. one that claims a fixed amount as a debt referenced to invoices provided and that may include an interest component;
  • Receiving payment and sending onto you, or if the debt is not paid, drafting and issuing claim;
  • Where no Acknowledgment of Service or Defence is received, applying to the court to enter Judgment in default.
  • When Judgment in default in received, write to the other side to request payment.

Please note, these example costs estimates do not include:

  • Any expenses or disbursements. These are sums that we might be required to pay, on your behalf, to third parties and include, for instance, any search fees or the charges of a professional process server.  These disbursements may include a VAT charge that we would also pass on to you;
  • Substantive advice on the merits or quantum of your claim;
  • A letter of claim in a complex matter in which, for instance, you have alternative bases of claim, and/or claims for damages or seek any other type of order from the court other than an order to pay a debt and any interest. Such a claim is unlikely to be undisputed and, therefore, to be subject to the above estimates;
  • Any other or further pre-action correspondence;
  • Any pre-action applications to court that might be required prior to issue of proceedings;
  • “without prejudice” settlement correspondence or negotiation or alternative dispute resolution;
  • Any costs associated with arbitration or with insolvency proceedings;
  • Enforcement of any judgment. Enforcement includes any enforcement process or action, such as the bailiff, that may be needed to collect your debt;
  • Assessment or agreement of costs or enforcement of assessed or agreed costs.

Further, the estimates do not apply in cases with a value over £100,000.00 or where the claims are defended or disputed at any point.

Estimates do not apply where there are factors that affect their accuracy. Factors that can affect the accuracy of estimates include:

  • A significant change in the nature and extent of your instructions;
  • The debtor, including its lawyers, does not deal with the matter reasonably and expeditiously;
  • There are other parties involved besides the debtor and creditor; and
  • Any other factor that, for reasons outside our control, means that significantly more work required than it is possible for us to anticipate at the time the estimate is provided.

Meet the team

MARK GOLDSTEIN
COMMERCIAL LITIGATION, DIVORCE AND FAMILY LAW

JAMES HILSDON
COMMERCIAL LITIGATION

PETER FITZPATRICK
COMMERCIAL LITIGATION