eCollect has an information memo about the major issues you should consider before commencing litigation. See Litigation consideration
Here are some important points for your consideration once you have decided to start litigation.
Selection of Lawyer eCollect recommends E C Legal which is an independently owned legal firm that shares offices with eCollect and has access to the eCollect files and Account Managers. E C Legal operates exclusively in the area of commercial litigation and so the lawyers have experience and expertise in this area. eCollect usually finds that using E C Legal is the most cost effective method of progressing your claim.
Legal Costs
E C Legal will charge you to prepare and lodge the claim with the court including paying the court fee, for the defendant to be served, preparation and lodgement of affidavit of service and obtaining notice of order providing a defence is not lodged.
E C Legal charge according the scale of costs set by the court. The details of these can be found on the internet e.g. www.magistratescourt.vic.gov.au. You should expect a total cost approximately as follows:
Claim (debt) amountsCost (approximately)
Less than $500 $350 – not recoverable
$500 - $1000 $600
$1001 - $4999 $650
$5,001 - $10,000 $700
$10,001 - $20,000 $750
$20,001 and above $900
As a general rule, the full amount of the costs are added onto the debt when ‘Notice Of Order’ is obtained and are 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.
This estimate of costs does not include:
multiple attempts at service (if the defendant is not residing or working at the address given and the process server has to then serve again at additional cost. It is most important that we know where the defendant is);
If the defendant lodges a defence and / or counterclaim. If defence and / or counterclaim is lodged then you will need to discuss the matter with the solicitor direct and request a quote to take the matter through to completion. In the event you do not wish to proceed after defence and / or counterclaim is lodged, you are still liable for the legal costs as indicated above plus you also may be required to pay the counterclaim and / or costs for the other side;
In the event the claim is against a company then before the claim is lodged EC Legal must conduct a company search. The cost is approximately $30.00;
Solicitor / Client costs. The costs noted above cover the dealing with the documents lodged with the court only. Time spent by the solicitor discussing the matter with you or other parties (e.g. negotiating settlement) can be charged to you and cannot be recovered from the defendant. Solicitor / Client costs can be avoided by allowing me to do most of the follow up work and liaise between you, the solicitor and the defendant as part of the duties for which eCollect is paid in our no win – no fee commission.
Searching for the defendant. In the event you do not know the exact whereabouts of the defendant we can perform skip trace at a cost of $220 + GST upon confirmation of location. Search costs are not recoverable.
Estimated Time Frame
Here is the sort of time frame that you could expect:
Day 1 - you give the go-ahead to litigate.
Day 3 - Solicitor lodges claim with court. This involves consideration of your claim, drafting a statement of claim according the rules of pleading; filing with the court and paying the court fee.
Day 7 - Solicitor receives issued claim back from court and sends to process server
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 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 - I will send copy of the order with letter demanding payment in its entirety within 10 days and call the defendant same day advising that we will continue with further legal action incurring more costs to the defendant
Enforcement
In the event 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.
E C Legal will not take enforcement action without your approval.
There a several actions available for enforcement of court orders. A more detailed explanation is available at enforcement.
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.
E C Legal Trading Terms
E C Legal will send you a letter directly confirming their engagement.
E C Legal may ask you to pay an amount in advance to cover expenses or on account of their fees.
E C Legal will send you an account at the end of each month or at an appropriate stage of the matter which is payable when you receive it.
Ref:CLIENT INFO SHEET - Starting litigation Authorised by: James Woods eCollect.com.au Pty. Ltd. Not to be reproduced without permission
Last Update: Thursday, 13 November 2008
