Debt Recovery

Commercial Debt Recovery

Our Commercial Debt Recovery team has extensive experience in acting on the recovery of debts, issuing court proceedings and enforcing judgments in business to business disputes.   

Such disputes are usually based on unpaid invoices. Other issues are dealt with by our Dispute Resolution team.

Pre-Court Proceedings

Prior to court proceedings being issued, we will send a communication to the debtor requesting payment of your debt. The correspondence will need to include copies of outstanding invoices and any other relevant documents.

Under the pre-action debt protocol it is necessary to request payment, or a response from your debtor, within either 7 or 30 days (if an individual) before further action can be taken.

We will pursue your debtor by letter, email and telephone in order to claim the monies due to you. We charge at 10% plus VAT of the sum recovered. If no monies are recovered, there is no charge *

* Please note that there is a fixed fee of £50 plus VAT for all debts below £1,000.

County Court Proceedings

Once you have decided to issue court proceedings we will prepare and file the required papers with the Court, and they will then be served on your opponent.

Typically, it takes around 5 days for the Court to issue proceedings, and your debtor will then have around 17 days from service to indicate whether it intends to defend the claim. If the debtor fails to serve its Acknowledgment of Service stating this information we will apply to the Court for judgment.

If it does indicate that it will defend the claim, the debtor has a further 14 days to file its Defence setting out its reasons.

The Cost of Issuing Court Proceedings

Charges for court proceedings involve the court fee (paid to the Court to issue a claim), and our fee for acting on your behalf: 

Court fees for debts up to £10,000 are fixed on a sliding scale dependent on the size of your debt. 

Debts for sums over £10,000 incur a Court fee of 5% of the value of the overall claim, up to £250,000 or higher when a flat rate of £10,000 is charged.

Berry Smith Fees

These costs apply where your claim is in relation to an unpaid invoice which is not disputed. 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.  

All of the above fees would be included in your claim together with interest and compensation under the Late Payment legislation (where applicable), and in successful cases are likely to be recoverable from your debtor.

Clients wishing to proceed with county court proceedings 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 Court fee. The costs quoted above reach the point of obtaining judgment in default against your debtor and do not include costs of enforcement which are outlined below..

Cost of Enforcement Action

There are a variety of enforcement steps that can be taken and we will consult with you on the suitability of various options once judgment has been obtained:

County Court Bailiffs (for Judgment debts below £600) – Court fee of £100 together with our fees of £100 plus VAT.

High Court Enforcement Officers (for Judgment debts above £600)  –  Court fee of £66 together with our fees of £100 plus VAT. There is also the potential of a HCEO abortive fee of £75 plus VAT if no recovery made.

Application for Attachment of Earnings Order 55 – Court fee of £100.00 together with our fees of £150.00 plus VAT

Application for a Third Party Debt Order (if you now your debtor’s bank account details) – Court fee of £100.00 together with our fees of £200 plus VAT

Application for a Charging Order over your debtor’s property (if you debtor owns a property) – Cost: £750 including Court fee and Land Registry fees.

Our costs for preparing and serving a Statutory Demand are available on request, or will be provided to you as an option when considering enforcement proceedings.

Defended Cases – Small Claims Track

If your claim is defended by the opponent, it will then fall outside our debt recovery system. 

We provide a fixed fee service for dealing with defended claims in claims allocated to the Small Claims Track. A claim will only be allocated to a track if and when a defence is filed by your debtor.

The Small Claims limit in the County Court is currently £10,000.  Therefore all cases up to this value will usually be allocated to the Small Claims track.

Features of this track include a streamlined process with the ability to recover only limited court fees and fixed costs and expenses if your case is successful. 

Many clients still require advice, assistance and representation to help them prepare and present their case even if these costs are not recoverable from the opponent. 

We therefore have a fixed price product (providing certainty of costs) specifically for Small Claims proceedings. 

£800.00 plus VAT and disbursements. 

We would advise you throughout your case and we would remain on the Court record carrying out the following steps for you:

Filing Directions Questionnaire Considering and advising on Defence and Counterclaim filed by opponent

Defended Cases – £10,000+

If your claim is defended by the opponent, it will then fall outside our debt recovery system. 

For defended cases in excess of £10,000, the case will be allocated to the Fast Track or Multi-Track in the Court. For these disputes you will be referred to our Dispute Resolution team, which has wide experience of acting for clients in disputes. Our charges are based on the time taken on the case, with costs estimates given throughout.

What is included?

• Taking your instructions and initial review of documentation
• Undertaking a search with Companies House as to current status of debtor   
• 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 judgment in default
• When judgment in default in received, a letter to the opponent to request payment
• If payment is not received within a set timescale, advice on the next steps and costs of enforcement before further work is undertaken

How long will it take?

It usually takes approximately 4-5 weeks from the date county court proceedings are issued to obtain judgment in default.

Once a judgment is obtained, you will be provided with the enforcement options available at additional cost.