Commercial Debt Recovery Solicitors — Recovering Business Debts Quickly and Cost-Effectively

A genuine, properly-pleaded dispute is a defence to a debt claim and prevents the automatic entry of a default judgment. However, a debtor who disputes the debt must file a Defence within the court's time limit — failure to do so means a default judgment can be entered regardless. Where the "dispute" is a pretext or delay tactic, a solicitor applies for summary judgment under CPR Part 24, arguing that the debtor has no real prospect of successfully defending the claim. The court grants summary judgment where the defence is merely fanciful or unsupported by evidence.

Insolvency significantly complicates recovery. Once a company enters administration or liquidation, unsecured creditors must prove their debt in the insolvency and may receive a distribution of pence in the pound — or nothing. However, a solicitor advises on: (i) whether the debt can be recovered from a director personally (personal guarantee, wrongful trading claim, TUPE liability); (ii) whether any part of the debt was secured; (iii) whether a preference or transaction at undervalue claim is available; and (iv) whether a creditor can restore a dissolved company to the register to pursue a claim. Early action before insolvency is always preferable.

For debts in the Small Claims Track (under £10,000 for most claims), costs recovery is very limited — each party generally bears their own costs. For claims in the Fast Track (£10,000–£25,000) and Multi-Track (over £25,000), the winning party generally recovers their reasonable costs from the losing party, assessed on the standard basis. For debts above £600 transferred to the High Court for enforcement by HCEO, enforcement costs are added to the judgment debt and recovered from the debtor. Late payment compensation (£40–£100 per invoice) goes some way to covering debt recovery costs.

Where the debtor does not respond to the claim, a default judgment can be obtained typically within 4–6 weeks of issuing proceedings: 14 days for the debtor to file an Acknowledgement of Service, a further 14 days to file a Defence, then the creditor applies for default judgment. The court processes the application and issues the judgment, usually within a few days. Where the debtor files a Defence, the matter is allocated to a track and a trial date is set — the typical timescale from issue to trial is 6–18 months depending on the track and court location.

A High Court Enforcement Officer (HCEO) enforces High Court judgments and county court judgments transferred to the High Court (available for judgments over £600, except consumer credit agreements). HCEOs are more effective than county court bailiffs: they attend immediately on a writ of control being issued, charge debtor-bearing fees, and recover at significantly higher rates. A solicitor transfers a county court judgment to the High Court (using Form N293A) and instructs the HCEO to attend the debtor's premises. The HCEO's visit alone — before any goods are seized — frequently prompts full payment.