Bespoke Debt Recovery Service

Both debt collection agencies and law firms can help to recover bad debts. It is often assumed that debt collection agencies are more suitable for small debts while law firms are more suitable for larger debts. However, any amount of bad debt may become a disputed debt or a complex problem requiring expert advice from experienced lawyers.

We offer a specialist service, managed by a partner with over 15 years of experience in insolvency and restructuring, which means that we are fully equipped to provide pragmatic and commercial advice from the outset and throughout the process.

1. Pre-Action Investigation and Advice: where appropriate, we will conduct an initial review of your claim, including a preliminary investigation, cost assessment and advice on the recovery options.
2. Pre-Action Correspondence: we will send the required pre- action correspondence which fully complies with the requirements of the pre-action protocol.
3. Issuing a claim: if the debt is not paid and/or arrangements are not made to settle the debt after pre-action correspondence we advise you on your options and if appropriate, will prepare and lodge a claim with the Court. If the claim is defended, we will attempt an acceptable resolution, or advise on the merits of proceeding to a court hearing. We will arrange representation at the hearing and provide appropriate advice and support throughout.
4. Obtaining Judgment and Enforcement actions/options: if you successfully obtain judgment against the debtor, we will advise on the best and most cost-effective enforcement options available to you and assist in enforcing with a view to obtaining payment.

As most outstanding debts are straightforward and will be successfully recovered early in the debt recovery process, we aim, though our pre-action correspondence, to ensure debts are paid at an early stage of the process for the lowest cost.  If the matter becomes complex because it is defended on meritorious grounds and/or a counterclaim is pursued, we will immediately advise you of this and the additional charges and expenses involved in continuing to pursue recovery of the debt. These additional charges are likely to be less than if the debt was originally handled by a debt collection agency as our firm will already be familiar with the matter.

Any written agreements/contracts between you and the debtor which show the nature of the debt, terms of payment and any supporting documentation will provide us with a better understanding of the debt.  If you have communicated with the debtor, evidence of this will be required. By providing all necessary documents and correspondences, we can assess and provide you with advice on what action should be taken.

We work on a fixed fee schedule which is dependent on the value of the claim for each part of the Debt Recovery Process. Please see Your Debt Recovery Package for the costs of each stage of the debt recovery process. Where the case is complex and/or high value, a separate fee estimate will be provided.

It is recommended that as soon as a debt falls overdue, you reach out to the customer to resolve the debt. This can involve sending out reminders, contacting them by email and providing a time frame for the debtor to make payment, before taking legal action. If the debtor is unable to pay the debt in full, it is worth considering payment plans which both parties would agree upon.

Your contract may state an interest rate which will continue to accrue until the debt is paid. If not, commercial debts are covered by the Late Payment of Commercial Debts (Interest) Act 1998, which provides a statutory interest rate of 8% plus the Bank of England base rate for business-to-business transactions. You can charge a business a fixed sum for the cost of recovering a late commercial payment on top of claiming interest from it. This fixed sum is dependent on the amount of debt, for example where the debt is less than £1,000 you can charge £40.

The value of the claim determines which court pursues and recovers the debt. For small to medium value claims, these are heard in the County Court. High value claims are pursued in the High Court.

Claims valued at less than £10,000are generally allocated to the Small Claims Track, which is designed to be a more informal process and accessible for litigants in person.

Claims valued between £10,000 and £25,000 will usually be allocated to the Fast Track and heard in the County Court and therefore involve a more formal process in recovering your debt. Expert evidence is limited to one expert per party and the hearing should last no more than one day. The amount of costs that may be recovered from the losing party in these matters is fixed.

Since 1 October 2023, claims valued between £25,000 and £100,000 may be allocated to an Intermediate Track if the trial is not expected to last longer than three days and expert evidence is limited to two per party. Claims on this track are also subject to the new fixed recoverable cost rules, limiting the amount that may be recovered from the losing party.

Debt claims valued over £100,000 are allocated to the Multi Track and are heard in the High Court. This is a formal and complex procedure which involves multiple expert witnesses, and the hearing can last for more than one day. Fixed recoverable costs do not apply to claims heard on this track.