Debt recovery: Range of fixed fees
When providing costs for debt recovery, it is common for firms to provide a fixed fee based on the value of the debt to recover.
We have set out an example of what such an approach could look like, but note you are not required to follow this model. We understand some firms structure their fees in relation to matter stages e.g. Stage 1, Pre-Action X% of any recovery made, Stage 2, Court claim £X, Insolvency; statutory demand X, Bankruptcy or winding up petition £X with a description of each stage and a separate list of possible disbursements.
Example template (Range of fixed fees) for a business to business debt that is undisputed
These costs apply where your claim is in relation to an unpaid invoice which is not disputed and enforcement action is not needed. If the other party disputes your claim at any point, we will discuss any further work required and provide you with revised advice about costs if necessary, which could be on a fixed fee (e.g. if a one off letter is required), or an hourly rate if more extensive work is needed.
|Debt value||Court fee||Our fee (incl. VAT)||Total|
|Up to £5,000||£X||£X (XVAT)||£X|
|£5,001 – £10,000||£X||£X (XVAT)||£X|
|£10,001 – £50,000||X% value of the claim||£X (or X% value of the claim)||£X|
Anyone wishing to proceed with a claim should note that:
- The VAT element of our fee cannot be reclaimed from your debtor.
- Interest and compensation may take the debt into a higher banding, with a higher cost.
- The costs quoted above are not for matters where enforcement action, such as the bailiff, is needed to collect your debt.
Our fee includes:
- Taking your instructions and reviewing documentation
- Undertaking appropriate searches
- Sending a letter before action
- Receiving payment and sending onto you, or if the debt is not paid, drafting and issuing claim
- Where no Acknowledgment of Service or Defence is received, applying to the court to enter Judgement in default
- When Judgement in default in received, write to the other side to request payment
- If payment is not received within X days, providing you with advice on next steps and likely costs
Matters usually take x-x weeks from receipt of instructions from you to receipt of payment from the other side, depending on whether or not it is necessary to issue a claim. This is on the basis that the other side pays promptly on receipt of Judgement in default. If enforcement action is needed, the matter will take longer to resolve.