What if a debtor disputes or defends a claim for a debt?
If a debtor disputes or defends a claim for a debt, it ceases to be a debt recovery claim and would have to be dealt with by our Dispute Resolution team. In such circumstances, our normal hourly rates would apply. As such, the cost would be determined by the amount of time spent on dealing with the matter and the relevant hourly rates.
Disputed/defended claims for debts usually arise as a result of disputed issues of fact, often around the ‘quality’ of the goods or services provided to the debtor. They can often be quite complex and sometimes require expert evidence or the assistance of a barrister. More often than not, they will include a counterclaim which a debtor raises as a ‘set off’ to the debt being claimed. A disputed/defended debt claim is subject to a much more involved and extensive legal process at higher cost and expense to determine its outcome and we would discuss this with you were the situation to arise and were the claim to move out of the debt recovery category.
Experience has shown that in the majority of court proceedings issued against debtors, a Defence is not filed and therefore a Judgment in default of a Defence is obtained. However, there are a few debtors who will file a Defence.
Once a Defence has been filed, the first thing we will do is assess its strength and let you have an indication of the costs likely to be incurred. At that point we will also advise you as to the prospects of success of the Defence and your claim.
If a Defence shows no real prospects of success, it is possible to make an application to the court for Summary Judgment, a procedure which ensures that Defences with no prospect of success do not delay substantially the obtaining of Judgment. In an appropriate case our Debt Recovery Department can apply for Summary Judgment on your behalf.
Small Claims (up to £10,000)
We are particularly conscious of the costs that can be incurred in small claims cases, because normally such costs are not recoverable from the debtor, even if you are successful at trial. For that reason we always consider alternative courses of action, such as negotiating a settlement with the debtor and utilising the free small claims mediation service provided by HM Courts Service, or we can give you advice and guidance to allow you to progress the matter through the courts yourself, something which is more likely to be feasible in the informality of the small claims track than in cases of larger value.
Claims over £10,000
In cases where the claim is for a sum over £10,000, different rules apply with regard to the payment of legal costs. Generally speaking, the losing party pays the majority of the winning party’s costs.
As all defended matters are different, detailed advice is always provided as to the prospects of recovery of the debt and the costs to be incurred in pursuing it. Depending on the value and nature of the case, defended matters are dealt with by different grades of lawyer within our Dispute Resolution Department. As the Debt Recovery Department is based within the Dispute Resolution Department, the transfer of cases is smooth and cases are progressed swiftly. The lawyer taking over the defended matter will provide you with a costs estimate and an indication of your claim’s prospects of success as soon as he/she takes it on. Our specialist Dispute Resolution Department has many years experience in dealing with such matters.
What are our hourly rates?
Our hourly rates are set out below:
Senior Associate £220.00 plus VAT
Trainee Solicitor £135.00 plus VAT
Paralegal £135.00 plus VAT
For further information on debt recovery or to make an appointment for an informal first discussion call Sarah Moore on 01228 552222 or email email@example.com .