Litigation and Debt Collection
Who will carry out the work?
Who will carry out the work?
Solicitor Director Lisa Pharaoh BA (Hons) qualified as a solicitor in 1993. Lisa has over 30 years of litigation experience. Stephen Elliott, Advanced Paralegal is a CILEX Member and has over 5 years litigation experience. They have extensive expertise in conducting litigation on behalf of Claimants and Defendants in the County and Higher Courts. Lisa maintains supervisory responsibility over the team.
Who will carry out the work?
Who will carry out the work?
Who will carry out the work?
We can advise and represent you throughout every stage of your case whether this be in relation to negotiation, litigation or mediation.
The cost of litigation, debt matters up to £100,000, depends largely upon how the debt came into existence. So, we will need to know the circumstances out of which the debt arose to provide a better indication of the cost of collecting any debt.
Who will carry out the work?
The courts have set procedures which have to be followed. Sometimes the debtor pays up quickly and so the costs of litigation are much less than if court proceedings are required to establish liability for a debt.
Even though proceedings are successful that is sometimes just half the battle. It may be , despite an order or judgment being obtained from the court the debtor still does not pay. In those cases it may be that additional costs are incurred trying to enforce the order
Key stages prior to bringing a claim in the County Court (pre-action)
The first stage is the drafting of a Letter of Claim in compliance with the relevant Protocols and Practice Directions set out in the Civil Procedure Rules. If this fails we may advise Claimants to issue a claim in the County Court and the key stages are set out in the section headed Next Steps.
The Letter of Claim
The Letter of Claim formerly known as a Letter before Action is a final and formal demand for payment. This letter must be sent to the debtor before a claim can be issued in the court.
There is a requirement that the letter contains certain information and this is dependant upon the type of debtor being pursued, for example whether the debtor is a limited company or an individual (which includes sole traders/partnerships).
The preparing and sending a Letter Of Claim to your debtor can be either a fixed fee letter (our Standard Letter Of Claim) or a letter which is drafted to your specific requirements and the exact circumstances after consideration of your paperwork (our Bespoke Letter Of Claim). The latter will be advised in more complex cases
Our Fees are:
Fixed fee : Standard Letter Of Claim
£350 + VAT ~ £420.00
Hourly rate : Bespoke Letter Of Claim
from £500 + VAT
See costs section for hourly rates of our fee earners
- An initial meeting with a member of our team to discuss your specific circumstances.
- Initial information gathering – This will include collecting copies of the invoices, contracts, worksheets etc needed to prove that the sum claimed is owed and the circumstances out of which the debt arose. This will also allow uas to to calculate interest and any compensation you will claim.
- Either preparing a standard Letter Of Claim by adding your details into our standard template letter (fixed fee), or preparing a bespoke Letter Of Claim drafted to your specific requirements and the exact circumstances of consideration of your paperwork. The bespoke Letter Of Claim will be charged on an hourly fee basis.
- Sending the Letter of Claim to the debtor.
- Sending any Response to the Letter of Claim to you.
All work undertaken after this stage "Next steps below" is charged at an hourly rate.
The hourly rate is dependant upon whether the work is undertaken by a solicitor or an Advanced Paralegal - see costs section.
The approach set out above (the consideration of papers and drafting of the Letter Of Claim) is a solicitor’s letter which is used to provide the debtor with an opportunity to settle the debt early with the lowest possible financial outlay. If they have forgotten about the debt or have been ignoring it then it will hopefully spur them into action and they can avoid court proceedings.
It is therefore only after the Letter of Claim is served that we usually understand whether a not a debt will disputed and if proceedings will be necessary. What action is, or isn't, taken by the debtor helps you to decide what option to take. We will be happy to give estimates and agree limits for each stage but we will need to discuss fees with you regularly so you have the choice whether you wish to continue.
It may be that the Letter Before Claim is ignored by a Debtor. You may then decide you have no alternative but to litigate and to commence proceedings in the County Court.
If your debtor disputes the amount they owe, or claims that they don’t owe it at all then again you may then decide you have no alternative but to litigate and to commence proceedings in the County Court.
There may be occasions where the debtor makes a claim against the prospective claimant . This is called a counter claim. If a counter-claim is made against you then we would charge an hourly rate for defending you against this claim. Once again you may then decide you have no alternative but to litigate and to commence proceedings in the County Court.
The above service (Standard Letter of Claim / Bespoke Letter of Claim) does not include any work after we send the debt's response to you. If there is no response within the requisite time then we will let you know.
If a Letter Before Claim does not result in payment of the debt then you may decide to litigate. The next step is to litigate by issuing a formal claim in the County Court. If you decide to litigate then we will charge our normal hourly rates for the work involved as litigation cases can vary widely in length and complexity. See our costs section for the hourly rates of our Solicitors and Advanced Paralegals.
The following work will be required to commence and pursue your claim in the County Court:
- Preparing your County Court claim form. This will include calculating the interest and compensation and discussing with you as necessary.
- Advising you of the court fee and any other fees payable.
- Submitting the claim form and particulars of claim to the courts and paying the issue fee on your behalf (you will have paid the court fee to us beforehand).
- The debtor should submit an Acknowledgement of Claim to the court which will either accept the debt or dispute all or part of the debt. We will review the Acknowledgement once we have received it and then we will advise you upon its contents and the effects upon the procedure and your claim.
- If the debt is accepted then the debtor has a limited time to pay the debt off.
- If they do not pay the debt off after they accept it then we will enter judgement to obtain a CCJ against them on your behalf.
- We will respond to any correspondence received and if they ask for a payment plan or more time to pay we will negotiate on your behalf acting in accordance with your wishes at all times.
- If a CCJ is entered then we will instruct bailiffs to collect the debt on your behalf.
- We will instruct High Court Enforcement officers on your behalf it the debt is over £600. This is because they have greater powers and are more effective than court-appointed bailiffs.
- We will work with the Bailiffs and will correspond with them on your behalf keeping you informed at all times. This is particularly important if payment plans or terms of settlement are offered.
- We will pay to you any payments received from the debtor or the bailiff.
During your Debt Recovery case we may need to make some payments to 3rd parties on your behalf. These are commonly called “disbursements” and we will add them onto your bill without any mark up. Disbursements will still be payable in our no recovery no fee package as they are not our fees and are necessary to progress your case.
For Debt Recovery cases, these costs could include:
- Court claim issue fees – these scale with the size of the debt you are claiming. Claims up to £100,000 will normally be issued online and the fees range from £35 (where the amount claimed is less than £300) up to 5% of the value of the claim (where the amount claimed exceeds £10,000 but does not exceed £200,000) . Claims over £100,000 will cost 5% of the debt, capped at £10,000 (no VAT on fees)
- Tracing fees – if we need to trace a missing debtor, tracing agents typically charge from £65 upwards (VAT may be charged dependant on the firm used)
- Process serving fees – if we need to serve documents in person a process server will generally cost around £120 (VAT may be charged dependant upon the firm used)
- Bailiff fees – it costs £71 to instruct High Court Enforcement Officers. They pay this to the court to obtain a Writ of Control which enables them to take on the debt. They then charge staged fees to the debtor depending on how long it takes to recover the money – longer means more expensive. If they recover money their fees are added onto the debt and paid off by the debtor. If they are unable to recover any money they will charge an “abortive fee” which is £75+VAT for most bailiff firms
Fixed price option
In some cases we can offer a fixed-price option as set out above for Standard Letter of Claim only.
Other factors which we must take into consideration when advising you on the total cost of any claim include how long it will take us to complete the case and how complex the work is.
We have provided information as to what makes a case simple or complex at the end of this section. As every case is different we are not able to set out an exact anticipated total cost for each case but we can provide you with an average cost.
Factors that are indicative of a more straightforward case
Factors that are indicative of a more straightforward case
Factors that are indicative of a more straightforward case
The work that is undertaken by us has an impact on the total cost of the case. The more straightforward the case is the less it will cost to be to bring or defend. The factors which could make a case straightforward for both parties are:
- Where the claim is clear and concise
- Where there are few documents in existence which are relevant to the case. This therefore reduces reading time
- Where documentation relating to the case is straightforward and needs no "special attention" such as redaction (content blacked out) for legal reasons
- Where the volume of correspondence is required between the parties and their legal representatives , other legal professionals, witnesses, experts and the tribunal is straightforward and isn't voluminous
- Where there are few additional applications to make or to draft or hearings to prepare for
- Where there are few attendances before the court
- Where the respective positions and claims of the parties are clear and require no amendment
- Where both parties have the benefit of legal representation with knowledge of court procedure.
- Where there are few witnesses involved in the case.
- Where no experts are required.
Factors that could increase the level of cost
Factors that are indicative of a more straightforward case
Factors that are indicative of a more straightforward case
The work that is undertaken by us has an impact on the total cost of the case. The more complex the case is and the more work that we have to do increases the cost.
The factors which could make a case more complex for both parties are;
- Where it is a complex and complicated claim
- Where a large amount of information and documentation is in existence which is relevant to the case and needs to be considered.
- Where documentation needs to be redacted (words blacked out) for legal reasons
- Where a large volume of correspondence is required between the parties and their legal representatives , other legal professionals, witnesses, experts and the court.
- Where it is necessary for a party to give more information about the claim
- Where the case of either party requires amendment to better reflect the party's case.
- Where the court requires the parties (usually just its legal representatives) to attend a hearing either at the court or on the telephone.
- Where a party has no knowledge of the process, is having difficulty conducting their case and/or is without the benefit of legal representation.
- Where there are a large number of witnesses involved in the case.
- Where experts are required
- As expected, the cost will increase as the days required to resolve the dispute increases.
Timescales
We will advise you of the time required to draft a Letter Before Claim in our client care letter. This will be dependant on your, and our previous commitments and the volume of the material you have to support your claim. It will also depend upon whether you have chosen a Standard Letter of Claim or a Bespoke Letter of claim and the time you require to approve the draft.
Usually, if the Letter of Claim is sent to a company debtor then they will have 14 days or 30 days to respond after which we can issue your claim if you instruct us to do so. We will need to work with you to draft the claim form and the particulars of claim. Again, to far as time is concerned, this is dependant upon your commitments and availability to prepare and approve this document before it is served. We can take as much time as we require (subject to any limitation periods) to perfect the claim form and particulars.
So far as responding to the claim is concerned this the debtor then has 14 days to acknowledge the claim or 14 to 28 days to file a defence. If the debtor doesn't do either then we can request judgement against them.
To obtain a County Court Judgment (CCJ) takes on average 6 to 8 weeks.
If they acknowledge the claim, they get an additional 14 days to defend.
If there is a need to enter judgement (no reply to the claim) we can do so and we do this will take the court around 10 days after which we can instruct bailiffs.
If full payment is made immediately that will be the end of the process, but where a debtor requests a payment plan, claims hardship or goes to great lengths to avoid the bailiffs then the process will necessarily take longer.
Enforcement Action
Once a CCJ is obtained then enforcement action can then be take. We will be able to discuss with you the most suitable method to obtain payment.
- Tracing fees – if we need to trace a missing debtor, tracing agents typically charge from £65.00 (office based enquires) upwards to £150.00 (foot based enquiries) please not VAT may be charged dependant on the firm used.
- Process serving fees – if we need to serve documents in person a process server will generally cost around £75.00 to £200.00 (VAT may be charged dependant upon the firm used)
- Order to obtain information from a Judgment Debtor - £59.00
- Application for an Attachment of Earnings - £119.00
- Bailiff fees – it costs £71 to instruct High Court Enforcement Officers. They pay this to the court to obtain a Writ of Control which enables them to take on the debt. They then charge staged fees to the debtor depending on how long it takes to recover the money – longer means more expensive. If they recover money their fees are added onto the debt and paid off by the debtor. If they are unable to recover any money they will charge an “abortive fee” which is £75+VAT for most bailiff firms
- Application to request Bailiff service of order to obtain information from a Judgment Debtor - £119.00
- Request for a Warrant of Control - £83.00
- Re-issue of a Warrant of Control - £33.00
- Application for a Final Charging Order - £119.00
- Application for an Order for Sale - £332.00
- Application for a Third Party Debt Order - £119.00
There are a number of courses of action which you can take. Each one has different time scales but we envisage on average each method of enforcement takes between 4 to 16 weeks.
Tracing, process serving, personal service of documents can take between 1 and 28 days.
Swearing / affirmation of documents : by appointment at our offices : £5.00 for an affidavit and £2.00 for each exhibit : usually within a week
If the matter is fully defended then depending on complexity the court process can take months or years to resolve.
A disputed debt is a long process.
The impact of COVID
Regrettably, the courts are still severely impacted by the impact of COVID 19 and so it is very sadly anticipated that cases will not come to a determination for many many months. Accordingly, we are seeing an increase in the use of ADR or mediation during these challenging times as this process is quicker, less costly, less stressful for the participants and provides a quicker determination allowing the parties to move on. Please ask us about our mediation services.
Pharaoh Law is the trading name of Pharaoh Legal Limited.
Pharaoh Legal Limited is a limited company registered in England and Wales under No. 10728221
and is authorised and regulated by the Solicitors Regulation Authority SRA NO. 639473
Registered office : Chaldon House, 22 Middlemarsh Street, Poundbury, Dorset, DT1 3GD
Director and Solicitor : Lisa Pharaoh, BA (Hons) Law with Decision Making Processes
Consultant Solicitor :Deborah Schmieder, BA (Hons) Humanities
Consultant Solicitor : Sharon Edelstyn, LLM Legal aspects of Medical Practice
Chartered Legal Executive : Stephen Elliott (Full membership of Chartered Institute of Legal Executives)
Copyright © 2024 Pharaoh Legal limited - All Rights Reserved.
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