Legal Escalation & High Court Enforcement - First Capitol Limited
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Legal Escalation & High Court Enforcement

Unfortunately there are times when it may become necessary to escalate the recovery of a debt through the courts.  We will only recommend this course of action as a last resort when all other avenues have been explored.

Legal action can be stressful, daunting and time consuming.  With our experienced case managers on hand we can navigate you through the process every step of the way.  For defended claims, after an initial consultation, our panel of solicitors can provide legal assistance and representation, on a no win – no fee basis*.
*For claims over £10,000

County Court claims are split into 3 “tracks”

Claims up to £10,000 are considered as small track.  Cost are not usually awarded therefore, should you win, you will not be entitled to claim any legal fees associated with the claim nor will your debtor if you are not successful.

Claims between £10,000 and £25,000 are classed as fast track.  These types of claim are conducted on a relatively strict timetable and it can be around 30 weeks before the final hearing.  Costs can be awarded. It is recommended that legal advice is sought when a claim is allocated to this track as the court “directions” and documentation can be complex.

Claims in excess of £25,000 are usually allocated to the multi-track system.  Unlike small track and fast track there is no standard procedure. Again costs can be awarded therefore it is recommended that legal advice is sought.

Once you have obtained judgement there are various enforcement options that you could consider.

Types of enforcement action

Issue of a Statutory Demand
This can be used without going through the County Court process.

This course of action applies to debts of £750 and over for a Limited Company/Corporation and £5,000 and over for an individual or sole trader.  It  is a formal written demand for payment for an undisputed debt.  The debtor has 21 days to settle the debt in full or reach an agreement for payment in instalments.  If the debt is not paid then the creditor can apply to the court for a winding-up order (limited companies/corporations) or a bankruptcy petition for an individual/sole trader. When using this method of enforcement it is crucial that you get to “know your debtor” and we recommend that a full pre-sue report/investigation is undertaken. Also, accuracy in the drafting and the service is crucial to its success. We can draft and serve a demand on your behalf, anywhere in England & Wales.

Bailiffs  Once judgement has been granted in your favour, bailiffs can be appointed by making an application to the court for a Warrant of Control.  This is valid for 12 months from the date of issue, although an extension can be granted by a District Judge. The warrant enables bailiffs to visit the named premises to seize goods to the value of the debt. Their remit is always to obtain full payment together with any fees or arrange an acceptable payment programme. If payment is not forthcoming they can seize the debtor’s goods and chattels in lieu, which could include any asset that is owned or jointly owned by the debtor. All fees are added to the debt and are paid by the debtor.

High Court Enforcement.  Once a County Court Judgement (CCJ) has been obtained for debts of £600 and over an application can be made to the High Court to obtain a writ of control through The Sheriff’s Office ® .  This is the preferred route as High Court Enforcement Officers have greater powers than a bailiff to force entry into commercial premises; to levy or to remove goods. Again, their remit is to obtain full payment of the debt and fees or negotiate an arrangement. If payment is not forthcoming the bailiff can seize the debtor’s goods and chattels in lieu which could include any asset that is owned or jointly owned by the debtor. All fees are added to the debt and are paid by the debtor.

For sole traders and individuals, after judgement is awarded in the County Court, if the High Court/bailiff routes are not suitable then other avenues could be considered to enforce payment, such as:

A Charging Order – which is an order made by the court that secures a debt against a property owned solely or jointly by the debtor.  If the property is sold or re-mortgaged then the debt has to be legally discharged from any proceeds.  Charging orders can remain indefinitely on the property and the debt will accrue interest until the property is sold or re-mortgaged, or an order has been obtained from the court compelling the sale of the property.

An Attachment of Earnings Order –  a court order that compels the debtor’s employer to deduct monies from his/her wages or salary. An order can only be made if a debtor’s income is ‘Pay As You Earn’ (PAYE).   Unemployed, self-employed/sole traders are excluded from this type of Order.

 A Third Party Debt Order, sometimes referred to as a “Garnishee Order” – is a court order compelling the debtor’s bank, building society, credit card or overdrafts to make payment/s directly to the creditor. Third Party Debt Orders depend on the debtor’s circumstances.  If the debtor has little or no income whatsoever then the chances of recovering any money can be quite slim.

Order for Questioning – a Court Order which compels the debtor to be questioned before a Judge under oath about their financial circumstances: income and outgoings, employment or home.  If they fail to comply, a warrant could be issued for their arrest and they could be sent to prison. This type of Order is usually used for individuals/personal debts.

Interest

If you are owed money by a business, you can charge interest on any late commercial payment. Under the Late Payment of Commercial Debts Regulations 2013 you have a right to claim interest at a rate of 8% above the Bank of England current base rate.  This act amended the Late Payments of Commercial Debts (Interest) Act 1998.  For more information click here: https/www.gov.uk/late-commercial-payments-interest-debt-recovery/charging-interest-commercial-debt

For non-business debtors (individuals), interest can be charged under Section 69 of the County Courts Act 1984 at a rate of 8%.

Late Payment Compensation

You are also entitled to claim compensation of: £40, £70 or £100 per invoice [dependent on the invoice value] and your reasonable debt collection cost for recovering the debt. Our case managers can provide you with further details or alternatively for more information click here: https://www.gov.uk/late-commercial-payments-interest-debt-recovery/claim-debt-recovery-costs

We will never give you any false sense of hope of recovering a debt and we do not want you to waste good money on a hopeless cause. Before you consider taking legal action we highly recommend that we conduct an investigation into your debtor’s means and lifestyle to ascertain the likely outcome. If the information obtained in our report/s does not point to a successful recovery of the debt owed then we will advise you accordingly.

For a free, no obligation, consultation please contact us on 03333 444991 or complete our Online Enquiry Form here.

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