How Much Will it Cost if the Debtor Defends my Money Claim?

Despite it being very cost effective to begin a Small Claims matter (typically a claim with a value up to £10,000) and to request a Country Court Judgment (CCJ) in uncontested matters, there are costs risks if the debtor files a defence.

After a defence has been filed and if the matter is allocated to the Small Claims Track, the general rule is that apart from fixed costs, your legal costs are not recoverable. You can also usually recover the Hearing Fee and sometimes your advocate’s fee to attend the hearing (both of these elements are discussed later). However, your solicitor’s costs for everything in between are not usually recoverable; you should expect an average small claims matter to require approximately six to eight hours of solicitor’s time with an average cost of £180.00 per hour (plus VAT). This time covers perusing the defence and providing advice, drafting a reply if necessary, completing the Directions Questionnaire, attending the Small Claims Mediation, drafting witness statements and preparing the bundle for court, along with instructing an advocate for the hearing.

Straight away, with unrecoverable costs likely to reach £1,000, a lot of claimants are reluctant to proceed. Sadly, debtors are aware of this and it’s not uncommon for a spurious defence to be filed as an attempt to force a claimant to discontinue for financial reasons.

At Debt-Claims, we wanted to level the playing field and developed a pricing structure for Small Claims matters to take away the uncertainty of unrecoverable costs. It is worth remembering that you can discontinue most Small Claims defended matters without financial penalty.

In matters which you intend to contest the debtor’s defence and proceed, then we have three very competitive pricing structures available.

Option A – Full Handling at Discounted Hourly Rate

A designated Debt-Claims lawyer will handle the defended matter from start to finish at a reduced rate of £100.00 per hour (plus VAT). To us, we want to focus on cost-effective litigation and be your preferred legal partner for life.

You should still expect that around 6 hours of chargeable work would be incurred if the matter proceeds all the wat to trial. However, if matters did not proceed to trial, for instance if we settle matters at mediation, then you will be billed purely on time incurred by us plus any disbursements. Equally if matters become protracted for whatever reason, then the fee estimate may increase – but we will keep you informed throughout the duration of the matter.

In addition our fees, there will be a disbursement incurred for the Court Hearing Fee (between £27 and £346 depending on the value of the claim) and a disbursement for the advocate’s attendance at the hearing (this is approximately £200 but can vary depending on length of the hearing and any complexities). Both of these fees will be paid and arranged by Debt-Claims and we will invoice you for them. If your claim is successful at the hearing, the Court Hearing Fee is usually recoverable and the advocate’s attendance is sometimes recoverable – however, this is up to the judge on the day to decide.

Option B – Full Handling for a Fixed Fee

If you prefer the certainty of a fixed fee, then our second pricing option is just that. For £400.00 (plus VAT) we will litigate your matter from start to finish. With this fixed-price option, our fee is payable irrespective of the stage that the matter is resolved at.

As with Option A, there are disbursements incurred for the Court Hearing Fee and for the advocate’s attendance at the hearing. We will pay these on your behalf and invoice you for them.

Option C – Part Handling for a Fixed Fee

Our final option is ideal where the claimed sum is less, or where you feel that you can do some of the easier work. For a fixed fee of £200 (plus VAT) we will draft the appropriate witness statement(s) ahead of the hearing and file them with the court. You will be expected to complete other elements, such as the directions questionnaire, Small Claims Mediation and arranging payment of the hearing fee yourself. We will provide you with a reference guide for these elements.

With this option, the Court Hearing Fee is still payable. However, we would not send an advocate to the hearing and we would ask the Court to make a decision based on the evidence before it.

With the various fee options set out above, you know beforehand exactly what your recoverable and unrecoverable costs will be. This allows you to make an informed decision about how (and if) you intend to contest a debtor’s defence.

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