Date:

DWF Debt Recovery in action: Recent case studies

Successfully recovering monies owed

Below is a selection of recent case studies showing how our Debt Recovery team have acted for clients in successfully recovering monies owed.

  1. Recovering £200k of aged debt
  2. Cross jurisdictional enforcement
  3. £149k recovery on year old invoices
  4. £15k recovered off Petitioning Creditors Bankruptcy Petition
  5. Fraudulent Housing Benefit overpayments

1. Recovering £200k of aged debt

DWF was instructed by a leading supermarket chain to recover an aged debt of over £200,000.00 from a Limited Company. The debt had been outstanding for a considerable length of time and was considered to be virtually unrecoverable by the client. The case was successfully settled by DWF with the Directors of the Limited Company agreeing to the structured repayment of a substantial proportion of the debt, backed by personal guarantees.

2. Cross jurisdictional enforcement

DWF successfully recovered a substantial amount of money from a Judgment debtor in France. Judgment was entered by the County Court at Lincoln but the normal methods of enforcement were not available to the client because the debtor had moved to France, leaving no assets in the United Kingdom.

After receiving information from our client we instructed agents to apply to the French Courts to secure sums held in the Judgment debtor’s French bank account. The client’s application was granted and the sums were then paid to us in satisfaction of the client’s Judgment debt and costs. 

3. £149k recovery on year old invoices

Our Client was experiencing an issue with a Debtor who was not making payment of their overdue invoices despite their efforts to recover the monies internally. The Client saw that they were unable to allow the Debtor any more chances and with additional invoices becoming payable the debt only increased.

We took conduct of the matter and promptly sent out our fully compliant Letter before Claim to the Debtor, which included late payment interest and compensation claimed pursuant to the Late Payment of Commercial Debt (Interest) Act 1998. The value of the interest amounted to £1,738.09 and compensation totalling £3,280.00, which was claimed on each overdue invoice

On receipt of our Letter Before Claim, the Debtor made a payment of £100,000.00 and asserted that the balance of the debt was disputed as they believed that they were not in possession of all documentation. Our Client did not accept the dispute and instructed us to issue Claim Form for the remaining balance including the claim for interest, compensation and costs of the Claim. Upon receipt of the Claim Form, the Debtor made contact and made a number of lump sum payments for the invoices which resulted in the principal amount being settled (£140k). Not only did the Debtor make payment of the principal amount in full, the Debtor paid all of the costs, interest and compensation, which meant that the client did not incur any legal fees in respect of this case and it was settled within two months.

4. £15k recovered off Petitioning Creditors Bankruptcy Petition

Our Client had three separate cases ongoing against two individual Defendants who were for, the purpose of this claim, personal guarantees for a commercial debt and a loan agreement that amounted to approximately £18k over the three cases. We quickly took action on all three matters and obtained default Judgments against the Defendants who were very evasive despite being asset-rich. However, it then came to light that another Creditor had commenced insolvency action against the Defendants and had served both Defendants after a number of attempts.

We filed our Client’s Notice of Support to the Petition, covering all three amounts together with costs as soon as we were aware of the Petition. Despite the Creditor's Solicitors' efforts to negotiate a figure to halt proceedings, we stuck to our position as at this stage it was only their Client who would benefit from the deal. Due to this stance, the Petitioning Solicitors knew that we would take carriage of the Petition if there was not a satisfactory offer on the table. Subsequently, one of the Defendants made contact a day before the hearing, offering £10k immediately followed by monthly instalments. At this stage, the Defendant had also offered to the Petitioning Creditor the sum of £20k for a £40k debt, which they were happy with. We confirmed that this was not acceptable, requesting a payment of £15k up front with the balance to be paid within the next two months - this would ensure our Client would recover most, if not all, of the outstanding debt.

The Debtor made the payment of the £15k with the remaining balance to be paid within two months. This not only meant that our Client had received most of their monies, but we had also recovered a larger percentage than the Petitioning Solicitors had recovered for their Client. 

5. Fraudulent Housing Benefit overpayments

The Client was a London borough, responsible for over 300k constituents and for providing Housing Benefit to eligible constituent tenants. Overpayments of Housing Benefit does occur, either through the honest mistake of the claimant or, unfortunately and most disconcertingly, through fraudulent claims.

A Claimant had fraudulently claimed Housing Benefit from the local authority by failing to declare his property interest. The benefit overpayments ran over a number of years and totalled over £80k. The Client raised a demand for payment; however, the debtor failed to co-operate in the resolution of the debt. The local authority turned to the County Court and obtained an Order for Recovery of Award, however, the Order went unpaid and the Client turned to DWF for assistance.

In moving the debt into the County Court, the Client had opened up a number of enforcement options to aid in the recovery of the outstanding debt. Using our knowledge and expertise, we quickly identified the best way forward and secured the debt by way of charging order over the debtor’s property.

Concerned that security of the debt may not mean an immediate return, the Client asked what more could be done. We recommended the security was enforced by way of Order for Sale and, upon receipt of demand, the Debtor made an immediate payment of £20k. The Debtor then neglected to deal with the remainder of the debt, resulting in proceedings being issued for an Order for Sale. Upon securing the Order for Sale, the Debtor paid the debt in full, together with all costs incurred in taking the action.

Debtors often believe that in securing a final charging order, a Client will rest on that security - that a final charging order is the end of the matter. Through careful consideration and a process of due diligence, DWF have demonstrated on a number of occasions, that enforcement of securities through Order for Sale generates immediate cash returns on “won’t pay debtors”. The process only results in possession being taken on a small percentage of accounts.

“We have had some very successful recovery of large fraud debts.  We recently recovered £88,000 from one debtor through the sale of their property.  DWF work very collaboratively and understand our priorities.  In terms of managing the service, they are excellent at all levels. They are not a robotic debt recovery production line like some companies in this field. I can pick up the phone at any time and speak to someone.  They will often recommend the most sensible and cost effective way forward case by case, based on the developments of that case.  10 years ago we collected around £2M pa, now it is £6M.  DWF have been a key part of our strategy to drive up revenue.” - DWF Client testimonial

For more information about how the DWF Debt Recovery team can help you, please visit our Debt Recovery service page ›


Case study contacts

1 & 2: Duraid Al-Musaied, Senior Paralegal
3 & 4: Marcus Woods, Senior Paralegal
5: Gary Cook, Senior Paralegal

This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.

David Scottow

Director - National Head of Recoveries

I am a Senior Director and National Head of Recoveries with almost 40 years’ experience in debt litigation, insolvency and credit management..

Sectors

Neil Jinks

Director

I am a Director within the recoveries team at DWF. I have over 25 years of experience working in law firms, the credit industry and High Court enforcement sector, managing and developing debt recovery operations and client relationships.