Debt Recovery Fee Guide

The following information relates to our costs in respect of pursuing unpaid invoices or undisputed debts of a minimum of £10,000. You can recover debts up to £10k by making a Court Claim yourself, either online or by post – see Make a court claim for money: What a court claim is – GOV.UK (www.gov.uk)

If the debts are contested, our costs will fall outside the fixed fee regime below and will be passed to our Dispute Resolution team who will be able to provide you with a further costs estimate to help you recover your debt.

STAGE 1 – CONTACTING THE DEBTOR

The first stage prior to issuing court proceedings is to send a ‘Letter Before Action’ to the Debtor. The Debtor will be advised that court action will be commenced unless payment of the debt is forthcoming from them, usually within 30 days of date of the letter where the Debtor is an individual and 14 days where the Debtor is a company. Where the law permits, we will also apply interest and compensation to the debt. Please note we will require payment of our fee upfront.

 

STAGE 1 COSTS:

7.5% of the debt (plus VAT at the current rate of 20%) plus disbursements* and an additional 15% success fee (plus VAT at the current rate of 20%) on any sums successfully recovered.

 

STAGE 2 – WHAT HAPPENS IF THE DEBTOR DOES NOT RESPOND?

If we do not receive a response from the Debtor, we will contact you to take your further instructions. We will advise you of the best course of action depending on your case, however there are generally two routes available to you:

 

Route 1: Court Claim

This includes the following:

  • Preparing the Claim Form and Particulars of Claim
  • Issuing the Claim at Court
  • Updating you once we receive notification from the Court that the Claim is issued
  • Entering judgment (if the Defendant fails to acknowledge the claim and/or admits the debt is owed)
  • Keeping you updated of any sums received from the Debtor

 

STAGE 2 – ROUTE 1 COSTS:

£900 (inclusive of  VAT at the current rate of 20%) plus disbursements* and a 15% success fee (plus VAT at the current rate of 20%) on any sums recovered from the Debtor.

 

Route 2: Bankruptcy/Insolvency Proceedings

This includes the following:

 

  • Preparing a Statutory Demand and serving it on the Debtor. They then have 21 days to respond before we can issue insolvency proceedings against them.
  • If payment is not received, we would then issue a Bankruptcy Petition (against individuals) or a Winding Up Petition (against companies) and issue it at Court
  • If an Order is granted, we will liaise with the Official Receiver who is appointed to deal with and distribute the Debtor’s assets to the Creditor (you)

 

STAGE 2 – ROUTE 2 COSTS:

Statutory Demand – £600 (inclusive of  VAT at the current rate of 20%) plus disbursements* and a 15% success fee (plus VAT at the current rate of 20%) on any sums recovered from the Debtor. Bankruptcy/Winding Up Petition – £1200 (inclusive of  VAT at the current rate of 20%)) plus disbursements* and a 15% success fee (plus VAT at the current rate of 20%) on any sums recovered from the Debtor.

 

STAGE 3 – ENFORCEMENT

Should we obtain judgment from the Court, we may need to take further steps in order to enforce any judgment for the debt made in your favour. Bear in mind that it is sometimes difficult to enforce a judgment because the debtor has disappeared and/or has no assets to recover the debt. There are however numerous options available to you to explore enforcement of the judgment debt, including but not limited to:

 

  1. Court Bailiff/Warrant of Execution
  2. Sheriff/High Court Enforcement Officer/High Court Write (for judgment debts more than £600)
  3. Attachment of Earnings Order
  4. Order to Obtain Information
  5. Third Party Debt Order
  6. Charging Order

 

STAGE 3 COSTS (per enforcement option):

For enforcement actions a), c), d) and e) £540.00 (inclusive of  VAT at the current rate of 20%)) plus disbursements* and a 15% success fee (plus VAT at the current rate 20%) on any sums recovered.

For enforcement actions b) and f) £780.00 (inclusive of  VAT at the current rate of 20%) plus disbursements* and a 15% success fee (plus VAT at the current rate 20%) on any sums recovered.

 

Non-standard / Additional work – HOURLY RATES

Depending on the complexity of the claim, additional fees may apply at the fee earner’s hourly rate, at the following indicative rates:

Partner                                                                 £360 inclusive of  VAT at the current rate of 20%

Solicitor                                                               £252-318 inclusive of  VAT at the current rate of 20%

Trainee Solicitor / Legal Advisor                £210-240 inclusive of  VAT at the current rate of 20%

Please refer to individual staff profiles Our People – Redkite Solicitors for details of individual qualifications and experience.

 

CIRCUMSTANCES THAT MAY GIVE RISE TO ADDITIONAL FEES BEING INCURRED

  • Should a hearing be required
  • Instruction of Third party
  • Instruction by Multiple Claimants for one Debt
  • Multiple Debtors for one Debt
  • Excessive correspondence

 

SUPERVISION

In addition to the lawyer handling the claim, client files are supervised by a senior member of the team or Head of Department, who has ultimate responsibility for the matter. The supervisor is named in the engagement letter that is sent out to clients at the start of the process.

 

* DISBURSEMENTS IN ADDITION TO THE ABOVE FEES

Our fees specified above exclude any and all disbursements. Disbursements are costs related to your claim that are payable to third parties. We handle the payment of the disbursements on your behalf to ensure a smoother process. These include Court fees, third party fees (such as tracing agents), Counsel’s fees to attend hearings if necessary, and any enforcement fees. Some disbursements may be recoverable by you if you are successful at Court. The following provides a guide to the most common disbursements.

 

STAGE 2

Court Fees (these fees do not attract VAT)

Claim Amount Court Fee
Up to but not exceeding £300 £35
Exceeds £300 but does not exceed £500 £50
Exceeds £500 but does not exceed £1,000 £70
Exceeds £1,000 but does not exceed £1,500 £80
Exceeds £1,500 but does not exceed £3,000 £115
Exceeds £3,000 but does not exceed £5,000 £205
Exceeds £5,000 but does not exceed £10,000 £455
Exceeds £10,000 but does not exceed £200,000 5% of the value of the claim
Exceeds £200,000 or is not limited £10,000

 

Statutory Demand/Bankruptcy/Winding Up Petition Fees (these fees do not attract VAT)

 

Description Fee
Bankruptcy Petition Court Fee £332
Bankruptcy/ Winding UP Petition Court Fee £332
Official Receiver Fee £1500 (individual)

£2600 (company liquidation)

 

STAGE 3

Enforcement Fees (these fees do not attract VAT)

Description Fee
Warrant of Control £91
High Court Enforcement £78 (and a compliance fee of £75 plus VAT at the current rate of 20%) if enforcement is unsuccessful)
Final Charging Order £131
Attachment Of Earnings Order £131
Third Party Debt Order £131
Order to Obtain Further Information £65