Debt Recovery

A claim of more than £100,000 will be issued with the high court, and smaller claims will generally be issued in the county court money claims centre. There are set fees which are governed by the value of the debt which determines the court fee required. A claim which exceeds £10,000 has a 5% fee with a cap of £10,000, meaning a price for a claim of £400,000 would only cost £10,000.

After the court has processed the creditors’ claims, it will serve the Claim Form on the debtor. Once, the debtor has been served the claim they will have a time of 14 days to file an Acknowledgement of Service or Defence.

Moreover, once the Acknowledgement of Service is filed, the debtor will have a time of 28 days from when the claim form was sent to file a defence. 

However, if the debtor decides not to respond to the issued claim within the time frame the claimant can apply to go directly to the court for Judgement in Default. As a result of the claimant going directly for Judgement in Default, a trail would not be required. 

Fast and multi-track claims are decided at trial. However, claims which are allocated to the Small Claims Track are decided at a final hearing.

The final hearings for small claims are typically informal with the parties sat around a table. Witnesses are not generally required to give evidence under oath. Furthermore, usually, the parties involved represent themselves.

The fast track and multi-claims trials are much more formal in comparison to the small claims. Legal arguments and evidence will be presented using a set format. Moreover, witnesses will normally be required to give their evidence under oath.

At the end of the final hearing or trial, the judge will give a judgement, and explain the reasons for the decision. 

The parties will then have the opportunity to make representations to enable the judge to decide who shall be awarded costs and how much should be awarded. 

It should be noted, successful parties of small claims are typically only awarded minimal sums by way of cost. 

The enforcement stage is dependent on the outcome of the acknowledgement stage. For example, if the debtor decides to pay, the creditor enforcement proceedings would not be necessary. On the contrary, if the debtor decides to pay there still several enforcement strategies that can be used to recover the debt. The enforcement strategies include Writ of Control, Warrant of Execution, Charging Order, Attachment of Earnings Order, Winding up Proceedings, Statutory Demand for companies, and Bankruptcy Petition.

Before an enforcement strategy is selected, a solicitor may deem it to be adequate that further investigation is undertaken to analyse the debtor’s assets. Further investigation is essential as it can help to select the correct enforcement strategy, which will have the most success.  

Furthermore, in a scenario where more information is required, an application can be filed to the court that requires the debtor to attend court for questioning. If a debtor does not attend court, then they will likely be arrested for contempt of court.