Debt recovery: our fees explained
We understand that recovering outstanding debts is crucial to your business. Our dedicated debt recovery team at Switalskis is here to help you resolve these matters efficiently and cost-effectively. This guidance will provide you with clear pricing information for our debt recovery services (where the value of the debt is up to £100,000 and the debtor is based in England and Wales).
Each case is unique and a range of factors may affect the total cost for the instruction and/or the timescale for the matter to reach conclusion.
This stage involves an initial review of documents and advising you on the recoverability of the debt. At this stage, we send a letter before action (LBA) to the debtor, consider any response and provide advice as to next steps.
Any negotiations or discussions with the debtor after advising on the response to the letter before action and prior to the issue of Court proceedings will be charged at the appropriate hourly rate. We would not anticipate that pre-issue discussions/negotiations would exceed 2-3 hours of time if they are required.
This does not include the cost of monitoring compliance with any repayment plan that may be agreed with the debtor. If this service is required we will provide a separate fee quote for this.
If the debtor fails to respond or pay following the pre-action stage, we will issue court proceedings on your behalf. Once Court proceedings are issued it can take 6-12 months for the Court to deal with the matter to a final hearing. If the debtor fails to respond then the process can be quicker. There are alternative methods to issuing Court proceedings, utilising insolvency proceedings, we cover these separately below.
The costs involved in issuing Court proceedings are charged by stage of the process as follows:
| Debt value | Court fee | Our fee (excl. VAT*) | Total fee estimate |
|---|---|---|---|
| Up to £300 | £35 | £300 | £335 |
| £300-£500 | £50 | £300 | £350 |
| £500-£1,000 | £70 | £300 | £370 |
| £1,000-£1,500 | £70 | £300 | £380 |
| £1,500-£3,000 | £115 | £300 | £415 |
| £3,000-£5,000 | £205 | £300 | £505 |
| £5,001-£10,000 | £455 | £300 | £755 |
| £10,001-£100,000 | 5% value of the claim | £300 | £TBC on value of claim |
*our fee is subject to VAT. The prevailing rate of VAT is 20%.
If the debtor files a defence to the claim then the matter will be handled as a dispute. At this stage you will be provided with a quote for our fees based on our hourly rates so that you can consider whether the matter would be economical for you to pursue. We will also advise you as to the prospects of success based on the information contained within the defence. The hourly rates for our team are set out below and the following Court Fees would apply if the matter proceeded to a final hearing:
| Debt value | Court fee | Time estimate |
|---|---|---|
| Up to £300 | £25 | 12 – 18 months to reach a final hearing |
| £300.01-£500 | £55 | 12 – 18 months to reach a final hearing |
| £500.01-£1,000 | £80 | 12 – 18 months to reach a final hearing |
| £1,000.01-£1,500 | £115 | 12 – 18 months to reach a final hearing |
| £1,500.01-£3,000 | £170 | 12 – 18 months to reach a final hearing |
| Over £3,000 | £335 | 12 – 18 months to reach a final hearing |
If the debtor does not respond to the claim within 14 days of service of the claim form or admits to the whole claim then you can request that the Court enter judgment against the debtor.
This does not include the cost to deal with any application to set aside the judgment the debtor might make. Any costs associated with that will be charged on an hourly rate basis and a fee quote will be given to you before any work is commenced.
If the court rules in your favour and the debt remains unpaid, we can assist with enforcing the judgment. This may include applying for a warrant of control, charging order, or instructing bailiffs. We will provide you with advice on the different options and make a recommendation as to the most appropriate option for your debt prior to commencing this stage. The options are set out in the table below:
| Enforcement action | Disbursments | Our fee (excl. VAT) | Total fee estimate* | Time estimate |
|---|---|---|---|---|
| Charging Order | Land Registry Search Fee £3 court fee £110 Registering Interim charging order £40 | £500 | £653 | Approx. 12 weeks |
| County Court Bailiffs | Court Fee £83 | £500 | £583 | Approx. 6 - 12 months |
| High Court Enforcement | Court Fee for obtaining Writ of Control (valid for 12 months) £71 Abortive Fee if unsuccessful £75** | £500 | £571-£646 | Approx. 3-9 months |
| Application for Third Party Debt Order | Court fee £119 | £500 | £619 | Approx. 3-6 months |
| Attachment of Earnings Order | Court fee £119 | £500 | £619 | Approx. 3-6 months |
| Application to call the debtor into Court for questioning | Court Fee £59 Bailiff service of order £119 | £500 | £678 | Approx. 3-6 months |
*our fees are exclusive of VAT. The prevailing rate of VAT is currently500 20%.
**exclusive of VAT. The prevailing rate of VAT is currently 20%.
Please note that the above fees are on the assumption that the debtor does not contest any enforcement action taken. Increased fees (on an hourly rate basis) may apply where the debtor contests the enforcement action taken and the Court lists the matter for a hearing.
Please also note that the above fees do not include costs to negotiate with the debtor if, after the commencement of enforcement action, they wish to reach an agreement on payment. In those circumstances any negotiations will be charged at the appropriate hourly rate. We would not anticipate that such negotiations would exceed 2-3 hours of time over a period of 4 weeks should the debtor engage and be forthcoming with information about their financial circumstances.
We cannot guarantee that enforcement action will lead to payment of the judgment debt, that will depend upon the asset position of the debtor.
The following costs may apply depending on the specifics of your case:
Our pricing is based on the following assumptions:
If any of these assumptions do not apply, we will provide a bespoke quote tailored to your circumstances.
Insolvency proceedings are an alternative method of debt recovery, if you do not wish to issue Court proceedings. It can be used either instead of issuing court proceedings or as an alternative to the enforcement methods set out above once judgment is secured. It will only be appropriate to utilise the insolvency methods outlined below to seek to recover sums owing if the debt claimed is not disputed. The costs will vary depending on the action taken:
| Insolvency action | Disbursments* | Our fee (excl. VAT) | Total fee estimate* | Timescale |
|---|---|---|---|---|
| Statutory Demand | Process server fee to personally serve the Statutory Demand £175 | £750 | £923 | We aim to instruct the Process Server to serve the Statutory Demand within 5 working days of receiving all required information. |
| Bankruptcy Proceedings | Process Server fee to personally serve the Statutory Demand £175, Bankruptcy Search £2, Court Issue Fee £302, Official Receiver Deposit (refundable if the petition is dismissed or withdrawn) £1,500, Process server fee to personally serve the Bankruptcy Petition £175 | £2,000 | £4,145 | Once a Statutory Demand is issued it can take between 2 – 3 months for a bankruptcy hearing to take place. |
| High Court Enforcement | Court Fee for obtaining Writ of Control (valid for 12 months) £71 Abortive Fee if unsuccessful £75** | £500 | £571-£646 | Approx. 3-9 months |
| Application for Third Party Debt Order | Court fee £119 | £500 | £619 | Approx. 3-6 months |
| Attachment of Earnings Order | Court fee £119 | £500 | £619 | Approx. 3-6 months |
| Application to call the debtor into Court for questioning | Court Fee £59 Bailiff service of order £119 | £500 | £678 | Approx. 3-6 months |
*all fees are exclusive of VAT. The prevailing rate of VAT is 20%.
Each cost estimate above does not include any cost that may be associated with dealing with one of the following courses of action that may be commenced by a debtor to seek to delay or defeat the insolvency process:
If either of the above courses of action are pursued by the debtor, costs will be charged on an hourly rate basis and we will provide you with an estimate of our fees.
Our debt recovery team include a Solicitor and a Client Co-ordinator, both of whom have a vast range of knowledge and extensive experience with debt recovery work. The Team is supervised by a Director.
Sarah Naylor: Director and Head of Department
Lyn Shepherd: Client Co-Ordinator
* The prevailing rate of VAT is currently 20%.
If you’re looking to navigate the complexities of business law with a trusted legal partner by your side, get in touch with Switalskis today. Call us on 0800 138 0458 or contact us through the website.