Debt Recovery

Six years from the date the debt became due for most contract debts (Limitation Act 1980, s.5). Before that period expires, a signed written acknowledgment made to you or your agent, or a part-payment, restarts it (ss.29–30); neither revives a claim that is already time-barred. Once the period has expired the debt still exists, but the debtor can defeat court proceedings by pleading limitation — it is a defence they must raise, not an automatic bar.

Yes, if the debtor is a business. Unless your contract sets a substantial remedy of its own, the Late Payment of Commercial Debts (Interest) Act 1998 implies statutory interest at 8% above the Bank of England base rate from the day after the due date, plus fixed compensation of £40, £70 or £100 per invoice depending on its size, plus reasonable recovery costs above that. A Commercial Payments Bill now before Parliament would cap most business payment terms at 60 days and stop parties contracting out of statutory interest; it is not law yet.

Effectively, yes. Where the debtor is an individual or sole trader, the Pre-Action Protocol for Debt Claims requires a detailed letter of claim with a 30-day response period. For business debtors the Practice Direction on Pre-Action Conduct applies. Skipping it risks costs penalties and, in practice, forfeits the step most likely to get you paid.

Court fees are set on a sliding scale by claim value — for example £35 for claims up to £300 rising to 5% of the claim between £10,000 and £200,000 (fees are reviewed by HMCTS from time to time), and carry no VAT. Our own fees are published: for business debts of £25,000 or more, a percentage of the debt — before court 8% up to £49,999, 7% up to £149,999 and 5% above; 15%, 12.5% or 10% if litigation is needed — plus VAT, with initial advice on prospects free and fees paid up front credited back on recovery. Debts up to £100,000 are generally charged at our hourly rates of £145 to £350 plus VAT. We tell you the cost before we start.