What's the accepted/reasonable procedure to contest the legal fees added 
to a debt? I am going to ask for a breakdown in the amount charged and 
believe that if there's still a dispute you can ask for the fees to be 
'taxed' - is that correct and what does that involve?

Any advice appreciated.

Thanks.

Neil Kay wrote:

> What's the accepted/reasonable procedure to contest the legal fees
> added to a debt? I am going to ask for a breakdown in the amount
> charged and believe that if there's still a dispute you can ask for
> the fees to be 'taxed' - is that correct and what does that involve?
> 
> Any advice appreciated.
> 
> Thanks.

Could you tell us how the fees were incured i.e you lost a defended
action , enforcement action on an undisputed debt , costs involved in
tracking you down , contractual costs being enforced because of non
payment , these could all be deemed legal costs

Might help if you tell us what track the case was heard on (small
claims etc)

All makes a difference where costs are concerned 

--

steve robinson wrote:

> Could you tell us how the fees were incured 

Steve,

This is a long-winded one - here are the basics:

We (me and my wife) have a personal guarantee/charge on property for a 
£70K business loan. About 4 years ago the business went down when a 
major backer pulled out without warning.

We discussed repayment terms with the bank and during a series of 
meetings with our (very friendly) business manager, he stated that 
provided the loan was repaid 'within 10 years' there would be no 
problems. We committed to pay off the debt in lump sums as we then had 
no stable income.

Unfortunately, our Manager 'moved on' and soon the bank demanded 
£700/month payments at a time when my wife was out of work and fighting 
an Industrial Tribunal case against the former company for unpaid wages. 
We reiterated out intent to pay in lump sums to clear the debt well 
within the 10 year period, duly remortgaged and in the last two years 
have paid several large amounts to the bank and reduced the debt to £14K.

About 6 months ago the bank asked us what we were doing to clear the 
balance and we told them we were in the process of obtaining a final 
advance on our mortgage and would be paying the balance within the next 
'3-4 months' after we had completed some refurbishment on our house to 
increase its value.

The, out of the blue, the bank applied for a possession order on the 
house on the basis that we had failed to make 'regular payments' - even 
though we had cleared a large chunk of the debt - and significantly more 
than if we had been paying their initial demand of £700/month. We told 
the bank we were finalising the mortgage advance and that having a 
possession order on the house would cause us problems, we also offered 
to make monthly payments until we had the cash to pay the balance but 
they went ahead. At the hearing, the judge was pretty obviously appalled 
(and said so) that the bank was applying for possession for a £14K debt 
but (I think this is right...) because it was an 'all monies' debt it 
had to be repaid 'on demand' but the judge stretched the point and 
suspended the order for 3 months in order for our advance to be processed.

Incidentally, at the hearing, the bank's agent stated that the bank 
would be willing to discuss payment issues with us in order to avoid 
them acting on the possession order, but when we contacted them through 
their solicitors, after a long wait, they refused to discuss regular 
payment terms and suggested that if we wanted a loan to pay off the 
amount we should go to their local branch - knowing full well that with 
our credit rating (we have a sub-prime mortgage) they would turn us down 
for a loan.

Anyway, the credit crunch hit, our mortgage company agreed in principle 
to lend us the money but also tightened their lending criteria and 
wanted full audited accounts for my wife, who is working self-employed. 
These were prepared early (she had not been trading for a full year) and 
we have had our advance agreed and expect to receive the money some time 
this week. During this additional delay (about a month), we kept the 
bank informed of what was happening.

Out of the blue two weeks ago, we received court papers confirming the 
solicitor's request to have their costs added to the debt. These costs 
were set at over £3,000. Our dealings with the solicitor have amounted 
to perhaps 5 letters and the appearance of a local agent at the 
reposession hearing so we feel that £3K is excessive.

We have asked for a full breakdown of the charges and so far all we have 
received is verbal amounts such as 'case administration fee £750' etc.

So that's where we are - we feel that taking us to court has not speeded 
up the repayment process, not changed what we were doing to repay the 
debt anyway, pkus we had a history of arranging lump sum payments, which 
were accepted by the bank, and always paid at the time we stated.

I am always weary of trying to 'make up' legalese, but me and my wife 
feel that the additional costs the bank incurred were unnecessary and 
have just resulted in extra work (and costs) for us, plus we we be 
repaying the debt within 4 years compared to the original 10 years the 
bank stated was acceptable.

We have also asked the bank for a breakdown of the debt to see how much 
of it comes down to charges but they have not provided this.

So, what do you and others think!?

Thanks

> Could you tell us how the fees were incured

Steve,

This is a long-winded one - here are the basics:

We (me and my wife) have a personal guarantee/charge on property for a
£70K business loan. About 4 years ago the business went down when a
major backer pulled out without warning.

We discussed repayment terms with the bank and during a series of
meetings with our (very friendly) business manager, he stated that
provided the loan was repaid 'within 10 years' there would be no
problems. We committed to pay off the debt in lump sums as we then had
no stable income.

Unfortunately, our Manager 'moved on' and soon the bank demanded
£700/month payments at a time when my wife was out of work and fighting
an Industrial Tribunal case against the former company for unpaid wages.
We reiterated out intent to pay in lump sums to clear the debt well
within the 10 year period, duly remortgaged and in the last two years
have paid several large amounts to the bank and reduced the debt to £14K.

About 6 months ago the bank asked us what we were doing to clear the
balance and we told them we were in the process of obtaining a final
advance on our mortgage and would be paying the balance within the next
'3-4 months' after we had completed some refurbishment on our house to
increase its value.

The, out of the blue, the bank applied for a possession order on the
house on the basis that we had failed to make 'regular payments' - even
though we had cleared a large chunk of the debt - and significantly more
than if we had been paying their initial demand of £700/month. We told
the bank we were finalising the mortgage advance and that having a
possession order on the house would cause us problems, we also offered
to make monthly payments until we had the cash to pay the balance but
they went ahead. At the hearing, the judge was pretty obviously appalled
(and said so) that the bank was applying for possession for a £14K debt
but (I think this is right...) because it was an 'all monies' debt it
had to be repaid 'on demand' but the judge stretched the point and
suspended the order for 3 months in order for our advance to be processed.

Incidentally, at the hearing, the bank's agent stated that the bank
would be willing to discuss payment issues with us in order to avoid
them acting on the possession order, but when we contacted them through
their solicitors, after a long wait, they refused to discuss regular
payment terms and suggested that if we wanted a loan to pay off the
amount we should go to their local branch - knowing full well that with
our credit rating (we have a sub-prime mortgage) they would turn us down
for a loan.

Anyway, the credit crunch hit, our mortgage company agreed in principle
to lend us the money but also tightened their lending criteria and
wanted full audited accounts for my wife, who is working self-employed.
These were prepared early (she had not been trading for a full year) and
we have had our advance agreed and expect to receive the money some time
this week. During this additional delay (about a month), we kept the
bank informed of what was happening.

Out of the blue two weeks ago, we received court papers confirming the
solicitor's request to have their costs added to the debt. These costs
were set at over £3,000. Our dealings with the solicitor have amounted
to perhaps 5 letters and the appearance of a local agent at the
reposession hearing so we feel that £3K is excessive.

We have asked for a full breakdown of the charges and so far all we have
received is verbal amounts such as 'case administration fee £750' etc.

So that's where we are - we feel that taking us to court has not speeded
up the repayment process, not changed what we were doing to repay the
debt anyway, pkus we had a history of arranging lump sum payments, which
were accepted by the bank, and always paid at the time we stated.

I am always weary of trying to 'make up' legalese, but me and my wife
feel that the additional costs the bank incurred were unnecessary and
have just resulted in extra work (and costs) for us, plus we we be
repaying the debt within 4 years compared to the original 10 years the
bank stated was acceptable.

We have also asked the bank for a breakdown of the debt to see how much
of it comes down to charges but they have not provided this.


As a first step go and see the citizens advice bureau. This sort of problem 
is their bread and butter. If they cannot help they will point you in the 
right direction.

Peter Crosland

Neil Kay wrote:

>
> Out of the blue two weeks ago, we received court papers confirming the
> solicitor's request to have their costs added to the debt. These costs
> were set at over £3,000. Our dealings with the solicitor have amounted
> to perhaps 5 letters and the appearance of a local agent at the
> reposession hearing so we feel that £3K is excessive.
>
> We have asked for a full breakdown of the charges and so far all we
> have received is verbal amounts such as 'case administration fee
> £750' etc.
> So that's where we are - we feel that taking us to court has not
> speeded up the repayment process, not changed what we were doing to
> repay the debt anyway, pkus we had a history of arranging lump sum
> payments, which were accepted by the bank, and always paid at the
> time we stated.

Presumably you have filed a defence? If not, do so.

You should make it clear that whilst you admit liability for the debt, the 
lender has attempted to resile from an agreement that was made earlier about 
how the money should be repaid (setting out in full what was said) and 
therefore you contend that the bank is now estopped from pursuing this 
claim. Further or alternatively, that the costs claimed are excessive and 
have been incurred unreasonably.

The doctrine of equitable estoppel is that a promise to forego a legal right 
(in this case, the bank's promise to let you pay the loan within 10 years) 
is a valid defence to an action for the debt.  I don't actually think it 
will work in this case but it may get the judge on your side.

Use concise language (never emotional language - but you seem articulate and 
sensible judging from your post so that shouldn't be a problem) and ensure 
you put in all relevant information about what was said, and when, and 
whether it was orally or in writing, and use numbered paragraphs.

At the end of the day, it is for the judge to decide what costs to award. 
You can deal with that at any future hearing - argue that the legal action 
was unnecessary, that the work could be done by a junior legal clerk at a 
charging rate of 80 pounds an hour, and that too many hours of work are 
claimed.

If there is a possibility of settling out of court, make them a sensible 
offer towards their costs, of whatever you think reasonable in the 
circumstances. Maybe 500 quid plus the court fee.

Thanks to everyone who replied. You may like the latest:

The mortgage company providing the advance (going through tomorrow or 
Fridsy) was so appalled at the charges levied by the bank & their 
solicitors that they have offered their assistance in challenging them!

Will keep you posted if you want.