Legal Fees

weshtawake

Is 10% the norm as regards Legal Fees in the case of debt recovery? If so, is the 10% calculated on the principal or the total amount recovered i.e. principal plus interest.

Thanx

dillo2k10

weshtawake wrote: »

Is 10% the norm as regards Legal Fees in the case of debt recovery? If so, is the 10% calculated on the principal or the total amount recovered i.e. principal plus interest.

Thanx

I could be completely wrong but I thought that they weren't allowed to calculate fees based on a percentage or proportion of the money recovered.

McCrack

Its lawful for a solicitor to charge a percentage based on a debt.

10% is normal and whether its on the principal or principal plus interest is a matter for you and your solicitor to agree.

Corruptable

As McCrack has said, percentage fees on personal injury awards are not permitted, but on debts it's permitted.

Debt collection and repossession companies can take as much as 1/3 of the recovered amount as fees.

Milk & Honey

Corruptable wrote: »

As McCrack has said, percentage fees on personal injury awards are not permitted, but on debts it's permitted.

Debt collection and repossession companies can take as much as 1/3 of the recovered amount as fees.

Where does the 1/3 limit come from?

weshtawake

If I accept that 10% of the debt collected is payable in legal fees can I make a legitimate argument that legal fees which have been awarded by the judge to my legal team for court appearances etc. and recoverable from the debtor should be deducted from this 10% when calculating the net cost to me?

johnnyskeleton

I think you misunderstand the nature of a contract. If you want, you can agreeto pay a solicitor 200% of the recovered money plus an extra million euro. Equally you can agree to pay the solicitor on the basis of taxed costs, or a flat fee, or any other arrangement you like.

If you haven't expressly agreed it, then fees ecovered from the other side should be deducted from the recovered sum. But these could be significantly smaller than 10%.

Speak to your solicitor and ask them these things. If you are not 100% happy, go to another solicitor and then another until you reach an agreement on fees that you are happy with.

weshtawake

Johnny, thanks for your response. As you quite rightly point out all of this should have been thrashed out before the process even started but like a lot of standoffs and areas of dispute it is only arising now that there is momentum and conclusion in sight. I am sure we will resolve amicably but I just want to understand what is accepted practice. My stance would be therefore that 10% of the recovered amount is the norm for legal fees but I will look to have costs separately awarded and fees paid to date deducted from this 10% in arriving at the net amount due.
Does this seem like a reasonable stance to take??

johnnyskeleton

weshtawake wrote: »

Johnny, thanks for your response. As you quite rightly point out all of this should have been thrashed out before the process even started but like a lot of standoffs and areas of dispute it is only arising now that there is momentum and conclusion in sight. I am sure we will resolve amicably but I just want to understand what is accepted practice. My stance would be therefore that 10% of the recovered amount is the norm for legal fees but I will look to have costs separately awarded and fees paid to date deducted from this 10% in arriving at the net amount due.
Does this seem like a reasonable stance to take??

Ah I see. Well whatever you have agreed stands. If it is a significant fee you could consider speaking to a costs accountant for advice. Just to point out that costs recoverable are not due to the solicitor but instead due to the client as a reimbursement of fees already paid/as agreed. So an example would be if I agree to pay a solicitor €5,000 and I recover party-party costs of €3,000 from the other side, I owe the solicitor €2,000.

chopser

weshtawake wrote: »

Johnny, thanks for your response. As you quite rightly point out all of this should have been thrashed out before the process even started but like a lot of standoffs and areas of dispute it is only arising now that there is momentum and conclusion in sight. I am sure we will resolve amicably but I just want to understand what is accepted practice. My stance would be therefore that 10% of the recovered amount is the norm for legal fees but I will look to have costs separately awarded and fees paid to date deducted from this 10% in arriving at the net amount due.
Does this seem like a reasonable stance to take??

I imagine a lot of the fees you have paid to date have been for stamp duty, commmissioning etc. maybe even for summons servers.

With a lot of debt collection , you pay the above example fees and also scale costs if they are not recovered from the debtor and then also pay a set amount on the recovered amount. eg 15% on first 2,000 and say 8% on the remainder. (these are just random figures and not inidicative of general practice.)

My point being that the fees and scale costs and the recovered amount are usually quite separate.

nuac

imho if you agree a certain percentage of amount of claim recovered, you are entitled to credit for any scale costs recovered.

However -

1. scale costs are often quit lowl They are only a contribution towards Plaintiff's costs.

2. If a scale does not apply costs have to be taxed which takes time and for which the solicitor is entitled to charge for.

Generally while there is a lot of debt collection work available, the system is very old fashioned with a lot of needless paper.

Further a lot of defendants simply do not have the money and due to collapse of property market are unlikely to have it anytime soon.