solictor taking cut of monies recovered ??

eoinS

Hi there,

Could i get views on this please? One of the owners in our apartment block has been tardy wrt paying his management/maintenance fees?

Our management agency got their solictor on the case and after one letter to the owner from the solictor the fees were thankfully paid.

However we were a bit annoyed to then be landed with an invoice from the solictor looking for a payment of 7% + VAT of the monies recovered.

This is on top of paying for the letter sent which is far enough of course.

We were never informed of this charge in advance and i think its a bit much for sending one letter.

Is this standard practice does anyone know ?

Thanks a lot,
Eoin.

dats_right

This is common practice, although strictly speaking the solicitor should have provided you with full particulars of his charges beforehand i.e. 'a section 68 letter'.

servicecharge

In District Court level debt collection a 7% fee is common, but only where the case has gone to court or summary judgment.

Did the solicitor issue a summons to the debtor? Was any kind of judgment given? Things may of happened that you did not know about that made the debtor pay ie a summons landing on his doorstep.

It also depends on how much the debt was, 7% of a 1000 isn't much if he drew up a summons on your behalf.

In regards to the letter: the solicitor has to advise you before hand, in writing, of the fee's he proposes to charge or how he will charge. This is not a bar to him recovering his fee tho.

If you are unhappy write to the solicitor and say so, ask for options. If you are still not happy then a complaint to the law society is you next option.

dats_right

I charge a set fee for letter + 5% of monies recovered as do many other firms, if summons and/or judgment issued, I'd charge 10% of what is recovered plus a standard fee for extra work involved. So the fee charged by the solicitor is in line with common practice. In fairness, I think you would be better trying to negotiate the fee downwards than start making complaints to the Law Society given the small amounts involved.

eoinS

thanks for the advice - we are trying to find out if a summons was issued
which might explain it

please note i never said anything about making a complaint to the Law Society - i clearly stated i wanted guidance as to whether it was in some way standard practice

although if i wanted to make such a complaint i think the amount involved should be irrelevant

servicecharge

I'm editing my own post as didn't see datsright's post, which I disagree with btw.

If you feel that you have been excessively charged, and you are not happy with the explanation of the solicitor, then you should complain. And the amount involved does not matter, nor should it.

And datsright, I would regard 5% plus a set fee as excessive for a simple letter of demand without any further work necessary.

dats_right

servicecharge wrote: »

And datsright, I would regard 5% plus a set fee as excessive for a simple letter of demand without any further work necessary.

That's nice but totally irrelevant, as it happens though, I don't, nor do the many clients who instruct me in relation to these types of claims. Afterall €50 for taking instructions from client(which often means doing a company office seach as well because your client doesn't appreciate the difference between companies and joe bloggs the director or business names and importance of pursuing the approriate debtor), opening a file, sending a section 68 letter, sending a demand letter to debtor, maybe having to take telephone calls from your client and/or debtor, maybe negotiating a repayment schedule with debtor, probably receiving money directly to office and lodging to client account then writing to client to inform that monies recovered and drawing cheque to client, closing file both in case management system and physically, storing said file for at least six years. Now in many instances a client will instruct me not to proceed any further, maybe because they have been paid directly and I'll never know or because they are just going to write off the debt, either way I have to go through that whole process outlined above for €50 miserly quid, not really economically viable or worth my while now is it? So to make up for that fact, I'm willing to write these letters on the basis that, at least in some instances, it will be worth my while as I'll get the 5% bonus.

Ultimately, debt collection is about taking the rough with the smooth. Sometimes you will easily recover a debt and it's profitable for the solicitor, on other occasions the sheer amount of work that goes into chasing say 1k is ludicrous and amounts to the solicitor providing a service at well below cost (even if debt recovered), and on many more occasions you can't recover the debt and your own client is reluctant to pay as they view it as throwing good money after bad. It's all swings and roundabouts really and is by no means a lucrative practice area.

Regarding a potential Law Society complaint, what would the OP hope to achieve out of this? At most the 7% amounted to about €400 (at District Court Maximum), but more likely a good bit less, it is very unlikely that the Law Society will have any role in reducing this amount and at very best the solicitor will get a wrap around the knuckles for, apparently, not sending a section 68 letter. It must also be remembered also that the solicitor actually did an effective job here too and recovered the money where the OP was unable to.

servicecharge

Datsright: the fact that you can't streamline your working process should not hurt your clients.

A company search!: takes 30 seconds;
Filing storing: this is done automatically, it's called a computer
s68: a short form s68 can be done in seconds and signed at the point of instructions( I never walk into a meeting without one);
Negotiations and schedules rarely happen with demand letters as the client is paid directly and can't justify charging every client.

The whole point of "making up for the fact" is that you will get other work from the client, or the case will turn into a full blown recover case where you can earn a modest fee.

I could not justify charging more than €50 for a simple demand letter and I feel it is excessive to do so. And your attitude in general is why this profession has such a bad reputation with the general public in relation to the fees we charge.

As for the law society complaint: It is the legitimate port of call in such a case where the solicitor does not respond or there is a genuine issue. The money is not the point, it is an officer of the court charging excessively (potentially). This profession will only learn, it appears, if they are whipped into shape.

The poster has rights and as a solicitor I am astounded you can argue against somebody vindicating their rights.