Debt recovery is a commercial decision dressed as a legal one. The legal question — is this owed — is usually easy. The commercial question — will pursuing it leave me better off — is the one that decides whether a creditor is glad they instructed anyone.
Why the Fee Model Matters to You
In contentious business a solicitor may not calculate fees or other charges as a percentage or proportion of any award or settlement. That is a professional rule rather than a preference, and it has a consequence worth understanding from the client’s side. A percentage model gives an adviser a direct financial interest in your pursuing every debt on the ledger, and no interest whatever in telling you that a debtor has nothing, that a claim looks statute-barred, or that a dispute is genuine and about to become expensive litigation. Removing the percentage removes the distortion — which is why the advice here at the outset includes “do not pursue this” where that is the truth. As to cost itself: no figures appear on this site because a number quoted before the situation is understood would be a guess, but the shape is knowable. A letter of demand is a modest defined piece of work. Undefended proceedings to judgment are more, and usually proportionate on a substantial debt. A claim remitted to plenary hearing is a different order of magnitude, because it is no longer recovery. Enforcement adds more, and each application costs money whether or not it produces payment.
Interest You Can Claim — and When to Stop
Check three sources, in order. Contractual interest, where your terms of trade provide for it — many businesses have an entitlement they never invoke, and reviewing your own terms is free. Statutory late payment interest on business-to-business transactions under the late payment regulations, at the ECB reference rate plus eight percentage points, arising automatically without any reminder, alongside fixed compensation for recovery costs. And interest a court may award in various circumstances. Interest is usually overlooked at the outset and awkward to add sensibly later, so identify it before the demand rather than after judgment. On costs recovery: a successful party may be awarded costs, but recovering them depends on exactly what recovering the debt depends on — whether the debtor has anything. A costs order against someone with nothing is worth what a judgment against them is worth, so treat costs recovery as a possibility, never as the plan. Finally, the markers for when to stop: no assets, no income and no guarantor; a sum small enough that recovery costs approach it; a modest debt remitted to plenary hearing; enforcement already attempted and returned nothing; or a genuinely insolvent company where the realistic route is a claim in the liquidation. In each of those, a discount accepted or a write-off taken frequently leaves a creditor better off than persistence — and being told so is worth more than being sold the next application.
Will Pursuing This Leave You Better Off?
Send the amount, the age of the debt and what you know about the debtor. The arithmetic comes before the pitch - including where it says to settle at a discount or write it off.
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