Debt Recovery Proposal

MOMENTUM LEGAL

Proposal for Debt Recovery

SAFER SPHERE



Contents 1
2
About Us 3
About You 4
Current Requirements 5
Credit Control Audit 7
Legal Debt Recovery 8
Benefits To You 9
Summary
Appendix: Table of Fixed Fees

About Us

Momentum Legal is a solicitor’s practice with a difference. Our aim is
to Connect, Collaborate and Resolve. We promise to work with your
business rather than for it as your outsourced legal department.
Once you have agreed to work with us, consider Momentum Legal to
be your in-house legal department.
Our core services for businesses are:

Debt Recovery
Dispute Resolution
Employment Law
To learn more about us, what we do and for the latest news, visit

www.momentum-legal.co.uk

1

About You

Established in 2012, Safer Sphere is a specialist CDM Advisors
providing Health & Safety Solutions to the construction industry.
Primarily dealing with clients directly, changes in the industry have
resulted in the requirement to deal with contractors. Consequently,
Safer Sphere has fallen victim to the late payment culture which is
sadly considered to be an industry-norm.
At its peak, outstanding invoices have exceeded £250,000 but with
a concerted effort this has significantly been reduced. However, the
impact on cash flow remains a major cause for concern which has led
to Safer Sphere seeking advice from Momentum Legal to consider the
options available.
Automated Systems are already in place via Xero to generate
invoices and reminders but despite the impressive set-up, the nature
of the industry has meant that disproportionate time and resources
are being utilised to maintain an acceptable level of cash flow.

2

Current Requirements

Existing systems and processes need to be reviewed to implement a
robust system of credit control. In addition to the timely reminders
already being generated, strongly worded template letters may be
required with the option to instigate legal action as and when
required.
However, it is imperative that client relationships are maintained to
ensure long term clients are not antagonised unnecessarily and
ongoing relationships are not compromised.
Safer Sphere requires a system to maximise the efficiency of
recovering monies owed, without jeopardising its relationship with
clients and the reputation of the business.

3

Credit Control Audit

As part of its Debt Recovery process, Momentum Legal offers a
Credit Control Audit entailing a full review of current systems and
processes, a review of debtors and late payers as well any bad debt
.
The Audit would be conducted at your premises, working with key
personnel to gain a full understanding of the underlying issues and to
identify any areas for development within your current processes.

A full report will be provided along with advice and guidance on the
changes required. Bespoke template letters and diary systems will be
devised to maximise efficiency.

COST:

Momentum Legal provides legal services on a basic rate of
£175.00+VAT per hour.

In light of the number of current outstanding invoices (approximately
90 averaging at £1000) and the historic debtor issues encountered,
Momentum Legal proposes a full days audit at £750.00+VAT

Any subsequent support required following the audit would be
included within this fixed price.

4

Legal Debt Recovery

The purpose of the Audit and follow-up action is to implement a
robust credit control procedure.

Notwithstanding such a procedure being followed, processes will
need to put in place to instigate legal action where debtors continue
to ignore deadlines for payment.

Momentum Legal will need to exercise caution to ensure that all Safer
Sphere clients are not addressed with a blanket approach. With this
in mind, we will continue to work closely with you to identify which
debtors need to be subjected to legal action.

Momentum Legal can be instructed electronically, providing pre-
determined information and documentation. Upon receipt, we will
issue a Letter Before Action followed by the issue of proceedings in
the County Court in the event the letter is ignored.

Subsequent action will vary on the course of action taken by the
debtor.

Momentum Legal offers two options in terms of costs

5

Option 1: No Recovery No Fee
You would only incur costs in the event that we successfully recover
the outstanding sum. Our fee is calculated as a percentage of the
amount recovered.
If the debt remains unpaid, no fees would be charged other than the
fee payable to the Court for issuing the claim.
Option 2: Fixed Fee Service
Please refer to the fixed fee table at Appendix 1. Our fee is fixed at
each key stage of the claim based on the value of the claim.
If the matter is contested or the Debtor files a Defence, the claim
would be dealt with by a solicitor as a disputed matter on an hourly
rate on a time spent basis.
Ad hoc basis
You always have the option to instruct Momentum Legal as and when
required. However, we would encourage you to consider the options
above to enable Momentum Legal to work closely with you and your
business.

6

Benefits To You

The time currently spent in dealing with credit control, issuing
reminders and chasing payments is immeasurable in terms of costs
and time spent. Momentum Legal would effectively take over this
aspect of your work to free up your time to focus on what is most
important to you – your business.

7

Summary of what
we can offer

1. Credit Control Audit: £750.00+VAT
2. Debt Recovery (No Recovery No fee): 20% of total debt
3. Debt Recovery (Fixed Fee): Appendix 1
If you are interested in any of the above or you would like to discuss
in further detail, we would be happy to meet with you to run through
the options and consider what you would like to achieve and if you
have any considerations for budget.

8

APPENDIX:
Our Debt
Collection Fees

The table below shows the fixed fees we charge for various services
during the debt recovery process.

8

Issuing a Claim - Fees

Our fee for issuing your claim will vary based on the value of the claim. The
table below provides the fees we charge for different value claim along with
the fixed costs the court will order the debtor to pay back in the event of you
obtaining a judgment

Costs are not recoverable on the small claims track. However, court fees will
be added to the debt and are payable by the debtor where a Claimant is
successful in obtaining judgment. There is a small sum allocated for fixed costs
as set out in the Civil Procedure Rules.
VAT is charged on our costs and not the court fees. VAT is not recoverable
from the debtor but be reclaimed if you are VAT registered.
Invoices are issued at the end of the month for all work carried out that month.
Our terms are for payments within 7 days. You pay the amount shown in the
“Total” column above regardless of whether the debt has been paid at this
stage. In a successful action, your debtor will be ordered to pay the sum
shown in the “Amount recoverable from your debtor” column above; this may
be after our invoice has been issued. You will not recover the sum shown in
the “Net cost to you” column.
Defended matters referred to our litigation department will be charged at £175
+ VAT per hour.
To discuss our fees in detail, please do not hesitate to contact us on 01204
565040

9

105 Haslam House
Chorley Old Road
Bolton
BL1 3AS

Tel: 01204 565040
email: [email protected]
website: www.momentum-legal.co.uk