Debt recovery law, procedure & pricing
From unpaid invoice to payment or enforcement
Debt recovery is not simply sending a demand. The correct route depends on who owes the money, the contractual documents, limitation, whether the debt is disputed, the debtor's solvency and whether there is anything worth enforcing against. We assess those points before costs are allowed to run ahead of the commercial objective.
Pre-action protocol
Where a business is claiming a debt from an individual, including a sole trader, the Pre-Action Protocol for Debt Claims applies. The creditor should send a compliant Letter of Claim with the required information, statements and forms. The debtor normally has 30 days to respond. If documents are requested or debt advice is being obtained, further time may be required before proceedings can properly be issued.
Ordinary company-to-company debts are generally governed instead by the Practice Direction – Pre-Action Conduct and Protocols, unless a specialist protocol applies. The parties are expected to exchange sufficient information, consider settlement and ADR and act proportionately before litigation.
Interest and recovery charges
For qualifying business-to-business debts, the Late Payment of Commercial Debts (Interest) Act 1998 may permit statutory interest at 8% above the Bank of England reference rate, together with fixed compensation of £40, £70 or £100 depending on the debt and, where applicable, additional reasonable recovery costs. Contractual interest or another contractual remedy may alter the position.
For other debts, interest may arise under the contract or be claimed under the court's statutory powers. We calculate the correct basis before issuing rather than adding a figure mechanically.
Our fees for business debt recovery up to £100,000
The figures below apply to a straightforward, undisputed business debt where liability and quantum are evidenced by normal commercial documents and no substantial defence, counterclaim, jurisdiction issue or insolvency complication arises. All solicitor fees are plus VAT at the prevailing rate. Court fees do not attract VAT.
Debt value
Our fixed fee
What it covers
Up to £5,000
£1,500 + VAT
Review, pre-action demand, interest calculation, issue if required, and request for default judgment if undefended
£5,001–£10,000
£2,000 + VAT
As above
£10,001–£25,000
£3,000 + VAT
As above
£25,001–£50,000
£4,000 + VAT
As above
£50,001–£100,000
£5,000 + VAT
As above
Initial merits and recoverability review: £565 + VAT for up to one hour. Where we are then instructed on the fixed-fee route, this may be credited against the fixed fee at our discretion. Before work starts we confirm the applicable basis in writing.
What the fixed fee includes
- taking instructions and reviewing the key contract, invoices, purchase orders and correspondence supplied;
- basic company/debtor checks and advice on recoverability;
- calculating contractual or statutory interest and late-payment compensation where available;
- preparing and sending the appropriate Letter of Claim or letter before action;
- one substantive round of settlement/payment-plan correspondence;
- drafting and issuing a straightforward money claim if payment is not received;
- requesting judgment in default where no acknowledgment or defence is filed; and
- advising on the next enforcement step if judgment remains unpaid.
What is not included
The fixed fee does not include defended proceedings, a counterclaim, interim applications, applications to set aside judgment, insolvency proceedings, enforcement applications, advocacy at a contested hearing, expert evidence, counsel's fees, mediation fees, tracing agents, process servers or substantial additional correspondence. Those items are quoted separately before they are incurred.
Court fees and disbursements
HMCTS court fees are payable in addition to our fees and are checked again immediately before issue. As at 13 July 2026, the principal money-claim issue fees are:
Claim value
Issue fee
Notes
£500.01–£1,000
£70
HMCTS fee
£1,000.01–£1,500
£80
HMCTS fee
£1,500.01–£3,000
£115
HMCTS fee
£3,000.01–£5,000
£205
HMCTS fee
£5,000.01–£10,000
£455
HMCTS fee
Over £10,000 up to £100,000
5% of claim value
HMCTS fee
Current hearing fees include up to £346 on the small claims track, £619 on the fast track and £1,334 on the intermediate or multi-track. Other court and enforcement fees depend on the step taken. Typical third-party costs may include counsel, a process server, tracing or asset enquiries and mediation; where required, we obtain a quote or give a reasonable range before commitment.
Defended claims and hourly charging
If liability, the amount due, set-off or a counterclaim is genuinely disputed, the matter moves out of the straightforward fixed-fee model. Our current senior solicitor rate is £565 + VAT per hour. A bespoke estimate is given after the defence/issues are known. A typical defended matter may range from approximately £5,000 to £15,000 + VAT for a relatively contained lower-value dispute, £10,000 to £25,000 + VAT for a more substantial fast/intermediate-track dispute, and £15,000 to £50,000+ + VAT for a complex claim approaching £100,000. Those are ranges, not caps.
Costs recovery depends on track, outcome and the court's orders. On the small claims track, legal costs are generally very limited even if a party wins. Fast and intermediate track cases can be subject to fixed recoverable costs under CPR Part 45. Clients should therefore distinguish between what they pay their own lawyers and what may ultimately be recoverable from an opponent.
No win, no fee, CFA and DBA funding
We will consider risk-based funding where the merits, documentary evidence, debtor solvency and likely recovery justify it. Acceptance is not automatic and normally follows the initial merits/recoverability review.
- Conditional Fee Agreement (CFA / “no win, no fee”): the success fee varies with risk and may be between 25% and 100% of base costs. A success fee is generally payable by the client if the case succeeds and is not ordinarily recoverable from the debtor. Court fees, counsel, experts and other disbursements may still have to be funded by the client unless another arrangement is agreed. An unsuccessful client may also face an opponent's costs where the procedural costs regime permits it, unless protected by an appropriate order or insurance.
- Damages-Based Agreement (DBA) or percentage recovery arrangement: where legally available and suitable, our payment may be calculated as a percentage of the sums recovered. The agreed percentage will usually fall between 20% and 40% inclusive of VAT, depending on value, merits, stage, solvency and enforcement risk. In non-personal-injury civil litigation the statutory DBA cap is 50% of sums recovered, inclusive of VAT. The retainer will explain treatment of recovered inter partes costs and disbursements.
- Hybrid arrangement: in some cases a reduced fixed or hourly charge can be combined with a lower success-based percentage. The precise structure is agreed in writing before substantive work begins.
How the court process works
1. Evidence and debtor analysisContract, invoices, delivery/performance evidence, correspondence, limitation, debtor identity and solvency.
2. Pre-actionCorrect protocol or Practice Direction; demand, interest, documents, ADR and settlement.
3. Issue and servicePart 7 money claim in the County Court/High Court as appropriate, followed by acknowledgment, admission, defence or default.
4. Allocation and case managementThe court allocates the claim by value, complexity and other CPR 26 factors. Directions may include disclosure, witness statements, expert evidence, ADR and trial preparation.
5. Offers and settlementPart 36 and without-prejudice offers can materially affect costs. A Part 36 offer can be made before or after proceedings.
6. Judgment and enforcementWhere payment does not follow judgment, options can include warrant/writ of control, attachment of earnings, third-party debt order, charging order or insolvency steps where legally available and commercially sensible.
Authorities that matter in practice
Churchill v Merthyr Tydfil CBC [2023] EWCA Civ 1416 confirmed that a court can lawfully stay proceedings or order parties to engage in a non-court dispute resolution process where that is proportionate and does not impair the essence of the right to a judicial hearing. PGF II SA v OMFS Company 1 Ltd [2013] EWCA Civ 1288 remains important on the costs consequences of failing properly to engage with an invitation to ADR. These authorities reinforce a practical point: refusing to engage with proportionate settlement steps can have costs consequences even where a party considers its legal case strong.
Under CPR Part 44, pre-action conduct and unreasonable failure to engage in ADR can be relevant to costs. CPR Part 36 provides a formal settlement mechanism with potentially significant costs and interest consequences. CPR Part 45 governs fixed recoverable costs in specified cases. We use those provisions strategically rather than treating debt recovery as a sequence of automated letters.
Likely timescales
A straightforward company-to-company demand can produce payment within days or weeks. Where the Debt Claims Protocol applies, the initial response period is normally 30 days. An undefended court claim may reach default judgment in roughly 4–8 weeks after issue, depending on service and court processing. A defended claim can take many months and, in more complex cases, 12–18 months or longer. Enforcement adds further time and depends on the debtor's assets and the enforcement route chosen.
Who carries out the work
Principal-led debt recovery
Debt recovery and disputed civil litigation work is carried out or supervised by Paris Theodorou, Principal Solicitor. He was admitted as a solicitor of England and Wales in 2012 and has more than 13 years' post-qualification experience. The level of involvement of any other solicitor, counsel or external specialist will depend on the complexity and value of the matter and will be explained before material additional cost is incurred.
Where advocacy, expert evidence, process serving, tracing, enforcement or specialist insolvency input is required, we will explain why it is needed and provide a quote or reasonable estimate for the disbursement before commitment wherever practicable.