Debt Recovery Litigation
E C Legal sees debt recovery litigation as being a claim where there is unlikely to be a dispute about whether or not the amount is owed. In these situations, the aim is to use the litigation process to force the debtors to make payments.
E C Legal works closely with your eCollect account manager in handling debt recovery litigation. A legal notice or demand will generally have been sent via the eCollect software. The idea is to get the legal process underway with the least possible time and effort being spent.
Who Does What
You need to:
provide all available documents about the claim to the eCollect Account Manager. Please give this task the highest level of importance and include every available piece of correspondence no matter how big or small;
read all information provided by E C Legal very carefully. One of the ways we try to keep the fees low is to provide general advice in writing;
The eCollect Account Manager will:
collate the information provided by you and pass to the E C Legal solicitor;
receive any information from E C Legal as your agent. All dealings will pass via the eCollect Account Manager unless you wish to communicate directly to the E C Legal lawyer or E C Legal feels it necessary to communicate directly with you – see below under Legal Costs.
The E C Legal lawyer will:
review the information regarding your claim;
if the information is sufficient to provide a proper basis for the claim, draft a statement of claim, file with the court and organise for service on the debtor;
if no defence is filed by the debtor following service of the claim, obtain an order against the debtor;
if a defence is filed, report back to you and seek instructions on how you want to proceed.
E C Legal will usually charge in accordance with the court scale applicable to your matter plus GST.
To provide certainty for you, E C Legal will give you a fixed price for the above work. The fixed price will depend on the amount of the claim and which court is being used e.g. Magistrates Court of Victoria, Local Court of New South Wales etc. It is usually around $1,000 to $1,200 for a claim of $20,000.
As a general rule, an amount for legal costs (about the same as E C Legal’s fixed price) are added onto the debt when an order is obtained from the court and is recoverable from the debtor.
There are usually no costs awarded for claims under $500.
Note that these costs are for the initial round of work as set out above only i.e. up to the point of obtaining an order or notice of defence.
Estimated Time Frame
Here is the sort of time frame that you could expect:
Day 1: You give the go-ahead to litigate in writing as set out at the end of this memo and provide all necessary documents;
Day 2: The eCollect Account Manager provides the E C Legal lawyer with your documents;
Day 4: E C Legal lawyer reviews the documents and lodges claim with court;
Day 6: E C Legal lawyer receives issued claim back from court and sends to process server or serves by mail;
Day 14: Defendant is served by process server and sends affidavit of service to solicitor (proving defendant has been served).
Day 35: Providing defence is not lodged, the an order from court can be obtained after 21 – 28 days from the date the claim was served, including interest on the debt plus costs. Notice of Order from The Magistrates Court is valid for 15 years with interest accumulating.
Day 36: eCollect Account Manager will send copy of the order with letter demanding payment in its entirety and call the defendant same day advising that we may continue with further legal action incurring more costs to the defendant.
In the event that a judgment is obtained and the defendant does not respond (or responds with “I am not paying” as some have done), then E C Legal will need to take action to enforce the order. This will involve additional cost.
E C Legal will not take enforcement action without your approval.
Once the order is obtained against the defendant, all the enforcement options should be carefully considered against the defendant’s circumstances before decided which method to proceed.