Debt Collection

The Grant Saw litigation department is able to offer a prompt and effective service to recover debts owed to you or your business. 

The guidance below sets out the procedure and this firm’s charges that will apply should we act on your behalf to seek to recover a debt of up to £100,000 that is owed to you or your business. 

If the opposing party disputes your claim at any point, then the fixed fee costs referred to below will not apply and we will provide you with an estimate of costs for continuing to act further for you to pursue the disputed debt.  Those costs could be on a fixed fee basis (for example if a one-off letter is required), or at an hourly rate applicable to the solicitor acting on your behalf if more extensive work is required. 

The debt recovery service this firm offers is broken down into a series of stages. Each of these stages and the applicable costs is discussed in more detail below. 

Stage one – Receiving your instructions and sending a Letter of Claim on your behalf

The first step is to send to the debtor a formal demand for payment known as a ‘Letter of Claim’.  This will need to be sent in compliance with the pre-action protocol for debt claims.  The full wording of the protocol can be found here: https://www.justice.gov.uk/courts/procedure-rules/civil/protocol

In order for us to prepare a Letter of Claim, we will need certain specific details from you.  The easiest way to provide the information we need is to complete this form here and return it to us by email to [email protected]  We can then get started on drafting a letter on your behalf.

Once completed, the Letter of Claim will be sent to the debtor by post and by email (if an email address is provided) within seven days of our receiving from you the necessary information to complete the letter and payment of our fees in advance.  Unless it is clearly stated within your terms of business or other contractual document that applies, we will not be able to recover our costs for preparing the Letter of Claim  from the debtor.

Our cost for completing the Letter of Claim is £300 plus VAT.

Stage two – Dealing with the debtor’s response

The debtor will have a period of up to 30 days from  receipt of the Letter of Claim  to provide their response.  The debtor has a choice as to how he responds to the Letter of Claim.  Our charges for dealing with this stage in the process will be dependent on the debtor’s response.

(a)   If the debtor chooses not to reply and fails to make payment of the debt

We will inform you of the debtor’s failure to respond and you can decide whether you wish to instruct us to issue Court proceedings on your behalf.  Should Court proceedings be successful, you will obtain a County Court Judgment in your favour which you can seek to enforce.  If you wish to instruct us to draft Court proceedings, we will proceed straight to stage three.

The alternative to issuing Court proceedings would be to commence insolvency proceedings against the debtor.  This is usually started by issuing and serving a statutory demand.  Further details regarding this service can be found here.

(b)   If the debtor agrees to the debt but wants to negotiate payment terms

We will pass on to you any proposals received from the debtor and take your instructions.  We will then send a reply to the debtor either agreeing or rejecting the debtor’s proposals. Our cost for this will be £75 plus VAT.

An additional £75 plus VAT will be charged on each further occasion that you instruct us to respond to the debtor following our initial reply to the debtor’s proposals.  We will not be able to seek to recover these costs from the debtor.

(c)    If the debtor admits the debt and will pay now

We will inform you of the debtor’s response and request that the debtor makes payment either directly to you or to this firm. Our fee for this will be £50 plus VAT.

If this firm does receive payment from the debtor and you wish us to make payment to you by telegraphic transfer (by which funds will normally be paid to your account on the day of transfer) there will be a fee payable of £30 plus VAT. 

(d)   If the debtor disputes some or all of the debt

If the debtor disputes all, or any part, of the debt, the debtor is required to set out in writing what sum is disputed and why this is the case.  Furthermore the debtor is required to provide any documentation he is reliant upon in that regard.

If the debt is disputed then we will take your instructions as to whether you wish to proceed to take further legal action concerning the debt or not.  At this time we would provide you with an estimate of costs for our continuing to act for you in relation to the disputed debt. That estimate of costs would be based upon the hourly rate of the solicitor who is acting for you. .

Stage three – Drafting and issuing Court proceedings

If you instruct us to draft and issue court proceedings, we will endeavour to attend to this promptly and within seven days of our receipt of your instructions.

The cost for this will be dependent on the value of the claim, as set out in the table below.  In addition to our fees, you will be responsible for paying the applicable court fee due on the issue of proceedings.

Value of debt and interest

Our fees

Court fee

Set recoverable costs from the debtor

Up to £300

£400.00+ VAT

£35.00

£50.00

£300.01-£500

£400.00+ VAT

£50.00

£50.00

£500.01-£1,000

£400.00+ VAT

£70.00

£70.00

£1,000.01-£1,500.00

£400.00+ VAT

£80.00

£80.00

£1,500.01-£3,000.00

£400.00+ VAT

£115.00

£80.00

£3,000.01-£5,000.00

£400.00+ VAT

£205.00

£80.00

£5,000.01-£10,000.00

£400.00+ VAT

£455.00

£100.00

£10,000.00-£100,000.00

£750.00+ VAT

5% of the value of the claim

£100.00

If court proceedings are issued then we would be entitled to seek to recover a limited set sum in respect of your legal costs, in addition to the payment of the court fee incurred.  This would be sought in addition to the value of the debt claimed.  Those set recoverable costs are referred to in the table above in the fourth column.

Stage four – Requesting County Court Judgment

After the court issues proceedings, it will send court documentation to the debtor.  The debtor will then have a period of 14 days from his receipt of court papers. The debtor is then entitled to either file an Acknowledgment of Service, a Defence or an Admission (Part Admission).  In the event that he does not file either a Defence or an Acknowledgment of Service, we will request that the Court enter a County Court Judgment against the debtor.

(a)    If the debtor files an Acknowledgment of Service

If the debtor files an Acknowledgment of Service within 14 days of receiving the claim, he will have 28 days from receipt of the claim to file and serve a Defence.  If he fails to do so then we will request a County Court Judgment at that stage.  Our costs for requesting Judgment are detailed in the table below.

(b)    If the debtor files a Defence

If a Defence is filed and served, we will inform you of this and provide you with an estimate of our costs for continuing to act on your behalf in relation to the disputed debt.  Those costs will usually be calculated with reference to the hourly rate of the solicitor who is acting on your behalf in relation to the debt claimed.

(c)    If the debtor files an Admission or Part Admission

The debtor is entitled to file an Admission or Part Admission following his receipt of court proceedings.  Should that occur, we will seek to obtain a County Court Judgment based on the Admission or Part Admission that the defendant has filed. 

Our fees for seeking to enter judgment on your behalf are set out in the table below.  Again there is a set amount of recoverable legal costs which we can seek to add to the debt owing to you.

Debt + interest

Our fee

Recoverable legal costs

Up to £5,000

(1)     £25.00 plus VAT on seeking judgment following the defendant failing to acknowledge service

£22.00

 

(2)     £30.00 plus VAT on seeking judgment following the defendant failing to file a defence

£25.00

Over £5,000

(1)     £35.00 plus VAT on seeking judgment following the defendant failing to acknowledge service

£30.00

 

(2)     £40.00 plus VAT on seeking judgment following the debtor failing to file a defence

£35.00

Enforcement of a County Court Judgment

Once a County Court Judgment has been obtained there are a variety of enforcement methods that can be used to seek to recover your debt.  Full details of  the enforcement options available to you are outside the scope of this guide.  However, we will be happy to discuss these options with you and provide you with a cost estimate for proceeding on this basis as and when requested. 

The options available to seek to enforce a County Court Judgment include:-

(1)   Instructing a bailiff (either County Court or High Court) to enforce judgment.

(2)   Seeking to obtain a charge over the debtor’s property.

(3)  Seeking to obtain a Third Party Debt Order.  A Third Party Debt Order requires a bank/building society which holds funds on behalf of the debtor to make payment to the creditor directly.

(4) Seeking an Attachment of Earnings order. This process requires the debtor’s employer to pay the debt out of his salary.

(5)   Requiring the debtor to attend Court for questioning concerning his assets.

(6)   Proceeding to make the debtor bankrupt or insolvent (see below).

There will be additional Court fees payable in respect of proceeding with any one of the above options.

Insolvency Proceedings

Statutory demand

A statutory demand can be served on the debtor if there is an undisputed debt owing of at least £750 (if the debtor is a company) or £5,000 (if the debtor is an individual or sole trader). A statutory demand will put the debtor on notice that you will initiate insolvency proceedings against them if the debt is not paid.   If the debt is not paid within a period of 21 days of service of a statutory demand, or the debtor has not applied to set aside the statutory demand, you would be entitled to petition for the debtor company to be wound up or an individual debtor to be made bankrupt. 

If the debtor is made bankrupt or is wound up, you would then be entitled to seek to recover the debt owed to you from the bankrupt’s estate or the liquidated company’s assets following the appointment of an Insolvency Practitioner   Our cost for preparing a statutory demand will be as follows:

Value of debt

Our fee

£750-£49,999.99

£1,000 plus VAT

£50,000.01-£100,000

£1,500.00 plus VAT

You are obliged to use all reasonable endeavours to bring the statutory demand to the debtor’s attention, which includes, wherever possible, serving it on them personally. We therefore recommend that the statutory demand is served using a process server. The process server’s fee will be approximately £100-£150 plus VAT.  Additional fees may be required if there is some difficulty in serving the debtor or more than one attempt at service is required. 

If the statutory demand is challenged by the debtor or we are required to correspond with the debtor further, such costs will usually be calculated with reference to the hourly rate of the solicitor who is acting on your behalf.

Issuing a winding up petition

If you are owed £750 or more from a company and you instruct us to present a winding up petition against the debtor company our fixed fee for drafting, filing and serving a winding up petition is as follows:

Value of debt

Our fee

£750-£49,999.99

£1,250 plus VAT

£50,000.01-£100,000

£1,500.00 plus VAT

Additionally you would be required to pay the following costs and disbursements:

  • £280 Court fee;
  • £1,600 Official Receiver’s deposit.
  • £20.00 + VAT – Search Fees
  • £84.60 London Gazette advertising fee
  • £100 - £150 + VAT Process Server’s fee
  • £300 - £600 + VAT for counsel’s fees per hearing.  

Once the winding up petition has been filed at court and served on the debtor, we will need to prepare for the hearing. This will include advertising the petition in the London Gazette, liaising with any supporting creditors, notifying the court of their intention to appear at the hearing. and instructing counsel to attend the hearing. The cost of carrying out this work will usually be calculated with reference to the hourly rate of the solicitor who is acting on your behalf.

If the winding up petition is challenged by the debtor or we are required to correspond with the debtor further, such costs will usually be calculated with reference to the hourly rate of the solicitor who is acting on your behalf.

Issuing and obtaining a bankruptcy petition

 If you are owed £5,000 or more from an individual or sole trader and you instruct us to present a bankruptcy petition against the debtor, our fixed fees for drafting, filing and serving a bankruptcy petition are as follows:

Value of debt

Our fee

£5000.00-£49,999.99

£1,250 plus VAT

£50,000.01-£100,000

£1,500.00 plus VAT

Additionally you would be required to pay the following costs and disbursements:

  • £280 Court fee;
  • £990 Official Receiver’s fee
  • £20.00 + VAT – Search Fees
  • £100 - £150 + VAT Process Server’s fee
  • £300 - £600 + VAT for counsel’s fees per hearing. 

Once the bankruptcy petition has been filed at court and served on the debtor, we will need to prepare for the hearing. This will include, liaising with any supporting creditors, notifying  the court of their intention to appear at the hearing, and instructing counsel to attend the hearing. The cost of carrying out this work will usually be calculated with the reference to the hourly rate of the solicitor who is acting on your behalf.

If the bankruptcy petition is challenged by the debtor or we are required to correspond with the debtor further, such costs will usually be calculated with reference to the hourly rate of the solicitor who is acting on your behalf.

The Debt Recovery team at Grant Saw

Your debt claim will be handled by one or more of the Grant Saw Debt Recovery Team.  Our team has over 50 years collective experience in delivering high quality debt recovery work. 

The team comprises of the following persons:

(1)   Sarah-Kate Jackson

Sarah-Kate is head of the firm’s litigation department and a partner in the firm.  She is a solicitor who qualified in 2006.  Sarah has regularly advised clients on debt collection matters since qualifying.

Sarah-Kate’s full profile is here: https://www.grantsaw.com/our-people/sarah-kate-jackson/  .

(2)   Mike Clary

Mike is a solicitor and partner within the firm’s litigation department.  He qualified as a solicitor in 2000.  Mike is regularly instructed by clients to act on their behalf to recover debts owed to them or their business. 

Mike’s full profile is here: https://www.grantsaw.com/our-people/michael-clary/

(3)   Claire MacMahon

Claire is a solicitor within the firm’s litigation department. Claire trained at Grant Saw and qualified as a solicitor in 2008.  She has acted successfully for many clients recovering debts owed to them.

Claire’s full profile is here: https://www.grantsaw.com/our-people/claire-mac-mahon/

(4)   Bimal Kotecha

Bimal is a solicitor with the firm’s litigation department.  He qualified as a solicitor in 2012.  Bimal has particular expertise in bankruptcy and insolvency matters and is regularly instructed by clients to recover debts owed to them via insolvency procedures.

Bimal’s full profile is here: https://www.grantsaw.com/our-people/bimal-kotecha/

(5)   Angus Young

Angus is a solicitor within the firm’s litigation department.  He qualified as a solicitor in 2014.  Angus has acted for businesses and individuals in seeking to recover debts owing to them since he qualified. 

Angus’ full profile is here: https://www.grantsaw.com/our-people/angus-young/

(6)   Adina-Leigh Collins

Adina-Leigh is a solicitor within the firm’s litigation department.  She qualified as a solicitor in 2015.  Adina specialises in insolvency litigation.  She is regularly instructed by creditors to seek to recover debts due to them via insolvency proceedings.

Adina’s full profile is here: https://www.grantsaw.com/our-people/adina-leigh-collins/

(7)   Georgia Beales

Georgia is a paralegal within the firm’s litigation department.  Georgia regularly assists the above-mentioned solicitors in all aspects of the debt collection process.

Georgia’s full profile is here: https://www.grantsaw.com/our-people/georgia-beales/

*The costs referred to within this guide are fixed costs and will apply where your debt relates to an unpaid invoice or debt which has a value of up to £100,000 which is not disputed.