Debt Recovery

Our debt recovery team

 

At Smith and Wells we appreciate that cash flow is vital.

Our experienced debt recovery specialists aim to provide you with a swift and cost-effective Debt Recovery Service, by writing to your Debtor to request payment by a specified date. If payment is not made, we can then issue proceedings on your behalf.

Our prices for our debt recovery process are set out below and show the costs usually incurred at the different stages of our work (see below).

We aim to offset our fees against costs and interest recovered from your Debtor and are happy to offer you a tailored quote and discuss your options.

Stages:

1 – Letter Before Action/Late      Payment Demand

2 – Issuing the claim

3 – Judgment

4 – Enforcement

 

Stage 1

Letter Before Action:

In simpler debt-recovery claims where an invoice has not been paid and the debt is not disputed, we will obtain your instructions and prepare and issue a Letter of Claim to your Debtor demanding payment. This will give the Debtor 7 days to pay the debt. We will forward you a copy of the letter and any response or payment received from the Debtor.

We offer a fixed fee for this 7-day letter service at: £25.00 plus VAT per letter (£30.00 inc. VAT).

Late Payment Demand:

An alternative to a Letter Before Action is a Late Payment Demand. This permits you to claim interest under the Late Payment of Commercial Debts (Interest) Act 1998, at a rate of 8% above the Bank of England base rate.

In addition, the Late Payment of Commercial Debt Regulations 2002 allows you to charge compensation if an invoice is overdue. The compensation you are permitted to charge is as follows:

SIZE OF UNPAID DEBT	COMPENSATION ARISING FROM LATE PAYMENT
Up to £999.99	£40.00
£1,000 to £9,999.99	£70.00
£10,000 or more	£100.00

 

Please note that you are unable to rely on these regulations if your Terms and Conditions already make provision for interest or compensation.

We offer a fixed fee for a Late Payment Demand at: £50.00 plus VAT per letter (£60.00 inc. VAT).

Telephone chasing of Debts:

Once the Pre-Action letter has been sent, we recommend that this firm telephones the Debtor on your behalf where possible. We can verify that the Debtor is still trading and has not moved address; we can check that we have the correct details and attempt to filter out cases where there is a genuine dispute or where litigation may not be the best way forward to resolve the claim; we can if appropriate negotiate payment arrangements with your Debtor and a telephone call may save the costs and delay involved in Court proceedings.

Telephone chase calls cost: £20.00 plus VAT per call (£24.00 inc. VAT).

 

Stage 2

Issuing the Claim:

In the event that the Debtor does not pay, we can start legal proceedings by issuing a claim for the unpaid debt in the County Court, together with interest, any compensation due and fixed costs.

Please note: For Debts in excess of £25,000.00 we may provide you with a separate quotation based on the fee earner’s usual hourly rate.

Key points:

• We will also claim fixed costs which are added to the debt and claimed back from the Debtor, in addition to any interest owing and or compensation.
• You will be required to pay the Court fee and our fixed costs to Smith and Wells prior to the proceedings being drafted and issued.
• In respect of complex or disputed debts, we reserve the right to apply a different scale of charges, calculated on an hourly rate basis.

Court fees and our charges for claims in relation to undisputed debts:

Value of Debt (including interest)	Court fee (not subject to VAT)	Smith and Wells fee (plus VAT)	Total fee (inc. VAT)
Up to £300.00	£35.00	£100.00 (£120.00 inc. VAT)	£155.00
For debts between £300.00 & £500.00	£50.00	£100.00 (£120.00 inc. VAT)	£170.00
For debts between £500.00 & £1,000	£70.00	£100.00 (£120.00 inc. VAT)	£190.00
For debts between £1,000 & £1,500.00	£80.00	£165.00 (£198 inc. VAT)	£278.00
For debts between £1,500.00 & £3,000.00	£115.00	£200.00 (£240.00 inc. VAT)	£355.00
For debts between £3,000.00 & £5,000.00	£205.00	£200.00 (£240.00 inc. VAT)	£445.00
For debts between £5,000.00 & £10,000.00	£455.00	£275.00 (£330.00 inc. VAT)	£775.00
For debts between £10,000.00 & £15,000.00	5% of the value of the claim	£300.00 (£360.00 inc. VAT)	£860 – £1,110 depending on the value of the claim
For debts between £15,000.00 & £100,000.00	5% of the value of the claim	£350.00 (£420.00 inc. VAT)	£1,170- £5,420 depending on the value of the claim

 

Note: for debts over £100,000.00 we will provide a tailored cost estimate.

If the claim is disputed by your debtor, then this firm’s hourly rates will apply. Our current hourly rates range from £150 plus VAT to £300 plus VAT dependent on the experience of the person dealing with your case.

 

Stage 3

Judgment:

Our aim is to obtain Judgment and payment as quickly as possible. In the event that your Debtor fails to acknowledge or defend the claim or admits to the claim, we can request Judgment on your behalf.

Any Judgment obtained will:

• Remain on the public record for 6 years (unless paid within 28 days)
• Usually affect the Debtor’s credit rating

On requesting Judgment there is no court fee, but we will charge a fixed fee for our work. This will be added to the debt and recovered from the Debtor where possible (although we cannot recover any VAT element). We charge a fixed fee for this process of £50.00 plus VAT (£60 inc. VAT).

 

Stage 4

Enforcement:

If you obtain Judgment and the debtor fails to pay you have various options to enforce the Judgment. Details of the related Court fees and our costs are set out below.

Enforcement Option	Court Fee	Smith and Wells fee (Plus VAT)	Total Fee (inc. VAT)
Warrant of Control – County Court	£110.00	£75.00	£200.00
Re-issue Warrant of Control	£33.00	£30.00	£69.00
Writ of Control (for judgment debts in excess of £600) – High Court	£66.00	£75.00	£156.00
Charging Order	£110.00	£200.00	£350.00
Attachment of Earnings Order	£110.00	£100.00 + £75.00 for each attendance at a hearing	£320.00
Third Party Debt Order	£110.00	£150.00	£290.00

 

N.B. All fees in respect of enforcement proceedings are payable on account

We will use our expertise to advise you on the most suitable method and discuss with you the applicable fees.

 

Insolvency Proceedings:

You may also start Insolvency Proceedings if the debt remains unpaid. In the case of an individual if the debt is more than £5000 (bankruptcy) or in the case of a company if the debt is more than £750 (winding up petition) we can give you specialist advice and costings on Insolvency Proceedings.

• Optional Extras:
• Processing and administering instalment payments at a cost of £15 plus VAT (£18 inc. VAT) per instalment.
• Advice on options on enforcing the judgment at a cost of £75 plus VAT (£90 inc. VAT) (where applicable).
• Any additional work not included above will be charged at our usual hourly rate.

 

Defended Claims:

In cases where a debt is or becomes defended, our charges are calculated by reference to the hourly rate of the fee earner who is dealing with the matter, together with any VAT and any disbursements (such as Court fees) which we as a firm must incur on your behalf.

The hourly rates depend upon the status of the fee earner and their experience:

• Trainee Solicitors/ Legal Assistants – £150 – £165 per hour plus VAT
• Solicitors, Legal Executives, Paralegals – £190 – £250 per hour plus VAT depending on experience.
• Principal or Partner – £275 – £300 plus VAT per hour

We will always try to ensure that each case is handled at the most cost-effective level. In some cases, we will be able to agree fixed fees with you. The fee earner with conduct of your case will discuss this with you where appropriate.