Statutory Demand Legal Fees

Recovery of these court costs should not normally be included in the claim. Legal claims relate to “debts” which the debtor is unable to pay (see section 123(1)(a) or 222(1)(a) of the Insolvency Act 1986 (IA 1986)). Unless it can really be said that the debtor is “owed” to the creditor for the amount in question, whether under a trade agreement or scenarios (a) and (b) common, but it seems that the authorities responsible for the financial consequences are less aware. Often, X argues that Y and Z should bear X`s costs – or that there should be no decision on costs – because X simply didn`t know there was a possible defense until he saw the evidence. However, the immutable result is that X has to bear the costs of Y and Z. This is due to the legal principle established by Warner J. in Re Cannon Screen Entertainment Ltd [1989] BCLC 660 that an alleged creditor who chooses the legal route (rather than making a claim and obtaining a judgment) must bear the associated cost risk: a statutory claim is not an essential requirement before an application for liquidation can be filed against a company; Undisputed guilt is often enough. However, the costs are borne by the creditor if the liquidation proceedings are to be withdrawn because the debtor can at least prove an arguable defence against the claim. It may therefore be desirable to serve a legal request first and not file the request until after the expiry of the 21-day period. At the time of the hearing, the cost assessor had completed his determination of costs, but his fees had not been paid and neither Rusca nor Doyles had taken steps to obtain the cost estimate from the cost assessor (equivalent to a Queensland valuation certificate). Mr Honour concluded that Doyles had not provided sufficient information on costs (noting that the initial estimate ultimately covered 2% of the total costs invoiced) and that, pursuant to Article 178 LPUL, Doyles could not initiate or maintain a procedure for the reimbursement of legal fees until they had been assessed, so that the costs complained of: are paid only after their evaluation. One of the main advantages of legal claims is that it is not necessary to obtain a judgment against the debtor company beforehand.

This means that bringing an action is much faster and more efficient, and is also much cheaper in terms of legal fees. The recent decision of the Federal Court of Australia in Rusca Bros Services Pty Ltd v. Dlaw Pty Ltd in Rusca Bros Services Pty Ltd (No 2) [2019] FCA 1865 serves as a timely reminder that a legal claim may be set aside if it is brought in circumstances where there is a statutory time limit for calculating costs, which include the debt claimed, has not yet expired. In April 2018, a director of Rusca sent an email to Mr. Doyle von Doyles expressing surprise at the size of the recent invoice given the significant fees already paid at that time, stating that Rusca needed to review each of the invoices to ensure they were reasonable. If a law prohibits the initiation of a debt collection procedure, the debt is not “due and due” as long as the legal prohibition exists, and therefore cannot give rise to legal action. [8] While the statistical application process may seem attractive and quick, leading to bankruptcy within 21 days, as seen here, things can quickly “go south” and lead to complex litigation. the statutory prohibition in subsection 198(7) means that the debt that is the subject of the debt can no longer be characterized as immediately “due” as required by section 459E of the Act. Indeed, the debt which is the subject of the claim cannot currently be enforced by an action by initiating a recovery procedure.

This also applies if the application was served before the assessment request began. Although the claim may have been due and payable at the time of service of the application because there was no prohibition on initiating recovery proceedings at that time, this status changed with the submission of the request for assessment. [9] Also on May 8, 2018, Rusca received a legal request from Doyles dated May 7, 2018, requiring payment of a total of $191,022.15, with the outstanding balance of 3 invoices issued in February, March and April 2018, less trust funds. In this FAQ, it is assumed that the court costs are the preparation of the legal claim, whether or not this includes the costs of advising the creditor on the service of a legal claim and whether it is an appropriate step for the collection of the claim. It is also assumed that the creditor`s claim should be served given the temporary measures currently in place to protect debtors due to coronavirus (COVID-19), provided that the debtor is a business and not an individual (this answer is based on this assumption). See Section 10 of the Insolvency and Corporate Governance Act 2020 (CIGA 2020) and CIGA 2020, Sch 10, where reference is made to the definitions of “relevant period” in CIGA 2020, Sch 10 pt 1, subsections 1(3) and 21(1), extended by the Insolvency and Corporate Governance (Coronavirus) Regulations 2020 (extension of relevant period) (No 2) Regulations 2020, be reported. SI 2020/1483. If you would like to discuss your options for recovering outstanding fees from your clients or cost issues in general, please call Pattison Hardman`s team of expense advisors. We have over 30 years of experience delivering timely and cost-effective results for the legal profession. The only other costs incurred in case of legal need are process server fees. A creditor who uses a legal debt as a quick way to collect debts can also blow it up.

If a judgment has not yet been rendered, a debtor only needs to prove that there is a genuine dispute to void a claim, which is why it is advisable to obtain concessions from the debtor at an early stage, if possible. If the claim is successfully avoided by the debtor, the usual order is that the court will order the creditor to pay the debtor`s court fees for the avoidance application. It should always be remembered that the granting of a legal claim should be made only in relation to an uncontested claim and that the liquidation procedure should not be used as a means of debt recovery, according to the approach of Sir George Jessel MR in Niger Merchants Co v Capper (1877) 18 Ch D 557 to 559, that: from the debtor`s point of view, the problem with the legal claim is that after the period of satisfaction of the claim, there is absolutely no possibility of contesting the claim, unless there is a valid application for cancellation of the claim, and the debtor must either pay the debt and attorneys` fees or risk, to be liquidated. A legal requirement is the first step towards liquidation/insolvency. They are prepared and served without judicial intervention and can be served as soon as the debt becomes due and no judgment is required. If the debtor disputes the claim, he may request the cancellation of the claim. If the legal claim is avoided, this may lead to a decision on costs against the creditor, but this is usually avoided if the cancellation of the claim is agreed before the commencement of proceedings. Although this is possible in all cases, we always try to recover the legal costs from the debtor. If we do, it will result in a net-zero cost to you if you take this step. Legal requirements can be very effective and a powerful tool for a creditor. Using a legal claim can be cheaper, faster, and more efficient in collecting overdue debts than other methods and, if done correctly, can be done in circumstances where the debtor needs to deal with you and does so urgently. However, there are risks if this is not done correctly, and you should always seek the advice of a lawyer when considering making a legal claim.

A legal claim that has a defect can only be lifted if it causes significant injustice. It will not be cancelled if it was a claim within the meaning of the law and the defect is only a minor irregularity or a false statement.