Back to News
You’re owed money – what can you do?
Are you owed money for work done, goods supplied, or under an agreement?
Whether you’re a business or an individual, there are steps you can take to recover the debt. Below is an overview of the key considerations if you’re thinking about taking legal action.
- Evidence
Your chances of recovering a debt depend largely on the evidence you can provide.
Keep all relevant documents such as signed contracts, unpaid invoices, photos of completed work, or proof of delivery.
Remember, even without a formal contract, verbal agreements or informal texts/emails may still be enforceable. In short: keep everything and document as much as possible.
2. Legal Action and the costs
The amount owed will determine the steps you should take to recover it, so it’s important to consider this early on.
| The debt is £10,000 or less | This would be classed as a ‘Small Claim’, where recoverable costs are limited to minimal fixed amounts (see Table 2 of Practice Direction 45), the court fee, and basic expenses like travel. Solicitors’ fees aren’t recoverable, even if you are successful. The most cost-effective option is to make the claim yourself online and seek free advice from Citizens Advice. |
| The debt is between £10,000 and £25,000. | Likely to fall under the ‘Fast Track’, where costs are capped under Table 12 of Practice Direction 45. You can recover solicitors’ fees if you are successful, but only up to the fixed amounts based on the claim’s complexity. |
| The debt is between £25,000 and £100,000. | Likely to fall under the ‘Intermediate Track’, where costs are capped under Table 14 of Practice Direction 45. You can recover solicitors’ fees if you are successful, but only up to the fixed amounts based on the complexity of the claim. |
| The debt is £100,000 or over. | Likely to be a ‘Multi Track’ claim, where fixed costs don’t apply. Generally, the losing party pays the winner’s costs, with courts typically awarding around 70% of reasonable legal fees. |
Remember: If your claim is unsuccessful, you may be ordered to pay the defendant’s legal costs on the same basis as mentioned above.
Example: You’re owed £80,000. The claim is straightforward but defended and goes to a one-day trial with legal representation. You win. Your legal costs are £40,000, but the court, applying complexity band 2 of Table 14 caps your recoverable costs at £32,000. If the debt is enforceable, you recover £80,000 and pay only £8,000 in unrecovered legal fees, leaving you with a net recovery of £72,000.
3. Enforceability
Winning at court doesn’t guarantee payment. Before starting proceedings, consider whether the other party can actually pay or has assets you can enforce against.
Key questions:
- Do they own property you could register a charge against to secure the debt?
- Are they bankrupt or likely to go into liquidation?
- Are they employed—could you apply for an attachment of earnings order?
Assessing this early can save time and cost.
It is important to seek legal advice early to assess your chances of recovering and enforcing the debt. Call Megan Wood at Mercers Solicitors on 01491 634277 if you require legal advice.
Share this story
