Terms & Conditions
Re: Debt in Contention Claim
Terms of Business
Thank you for instructing McDermott Smith Law Solicitors to act on your behalf regarding your claim. This agreement sets out the terms on which we will represent you. Please make sure that you have received the following enclosures:
- an E-sign document containing our terms of business; and
- also, a form of authority that allows us to correspond with and obtain copies of documents from your creditors; and
- a notice of right to cancel; and
- an income and expenditure form that will help us understand your current financial situation and help us agree an affordable fee for the service; and
- pre-paid envelope if documents are sent via post.
Scope of work
McDermott Smith Law Solicitors (“we”, “us”, etc.) are pleased to act for you in connection with your outstanding debts to your creditors. The purpose of this agreement is to set out the terms of your engagement with us, the details of our fees, and other important information in respect of the work which we do for you. We appreciate that this is a long letter, but please take the time to read it thoroughly. If there is anything you do not understand, then please ask us.
Our aim is to help either clear you of debt altogether or establish breaches within your credit agreements and present these to your creditor via a Letter of Claim which could help reduce the amount outstanding within 24 months. We will aim to reduce or highlight breaches within your credit agreements equal to your debt level by at least the total amount of fees paid to us during the first 12-month period as a minimum. If we are unable to achieve this, we will refund you the difference (so that you are in no worse financial state) between the total amount of fees paid and the amount of your reduced debt. As aforesaid, this is to ensure that you are in no worse financial state even if the reduction in your level of debt is only modest.
For example, if your debt level was £5,000 when the plan started, and fees paid after 12 months totalled £1,000 and the total amount of reduction achieved by us was £500, the refund of fees would total £500.
We will check whether each of your creditors provided you with the prescribed pre-contract information in compliance with various regulations. We will, where applicable, check whether each of your creditors have legal title to the debts they claim and that any assignment (i.e. transfer of the debt to someone else) was carried out lawfully. Further, we will write to each of your creditors to seek information and a copy of each executed agreement; we will then check whether the agreements were correctly executed and whether they contain the prescribed terms. We would, where applicable, argue that the agreements have not been correctly executed and are therefore unenforceable. We will also check whether each of your creditors are authorized and duly licensed under any relevant legislation (e.g. the Consumer Credit Acts) and subordinate legislation, and if any creditor is not authorized or licensed, then we will advise you and raise all appropriate arguments in your favor.
We will also consider with you any potential claim against each of your creditors, such as a claim for PPI, hidden commissions, harassment, or any amounts which you might have overpaid your creditors. Such claims may assist us in reducing your liability to your creditors. If we agree to pursue such a matter on your behalf, we may write to you separately to tell you of that fact and to explain how that aspect of the matter is to be funded. If we carry out any such work without having come to some other arrangement with you, however, then you may assume that we are carrying out that work under the terms of this agreement.
In law, there is a clear difference between the existence of a debt (on the one hand) and a debt being enforceable (on the other hand). Please note that even if we can show that a debt is unenforceable or disputed, the debt will continue to exist, and that it will therefore remain on your credit file. There might well be many occasions on which nothing can be done about this, but nevertheless, actually establishing that a debt is unenforceable can obviously be very advantageous.
Interest and charges under your credit agreements
We will write to each of your creditors as soon as you provide us with your signed forms of authority. We will ask each of your creditors for certain information and documentation.
We will also ask each of your creditors to suspend and waive any interest and other charges. However, they are not obliged to, and you will potentially remain liable for these. We can make no guarantees in this regard. Please also note that we are solicitors rather than debt management practitioners; as such, there may be a limit to the extent that we are able to take such steps. Once we have considered your financial situation carefully and if we think that it is in your best interests to do so, we might possibly suggest that you seek advice and guidance from a licensed insolvency practitioner about a formal insolvency process such as a debt relief order, an IVA (individual voluntary arrangement) or even bankruptcy. Depending upon your precise circumstances, a formal insolvency process may work to your advantage but please rest assured that we will consider all possible options once we have been provided with details of your precise financial circumstances.
We approach each client on a case by case basis in order to ascertain what we can realistically achieve, and we then formulate a plan of what to do in the light of the financial information that we have been provided with. It is vitally important that we are provided with honest, accurate and up-to-date information as to your overall financial position. If you are in any doubt at all about whether something is relevant, it is far better that you tell us about it so that we understand your full financial picture and then advise you appropriately.
Responsibility for the Work on Your Case
An assigned file handler (whose name and contact details will be provided to you in due course) will be dealing with your matter and will have day-to-day responsibility for your affairs. Other solicitors, legal executives or paralegals may assist from time to time, but all matters will be supervised and overseen by Leon Doherty, who is our Head of Financial Litigation
We try to avoid changing the people who handle your work, but if this cannot be avoided, we aim tell you promptly of any such change and why it is necessary. If you have any special requirements in this regard, please let us know; unless you tell us otherwise, we will assume that you are happy to leave such matters to us.
Funding Your Matter
If it is necessary, we will commence court proceedings, but we aim to resolve your matter without doing so. If we commence proceedings, we will ask you to enter into a conditional fee agreement (sometimes called a ‘no-win, no-fee agreement’) which will then supplement this agreement (but this will not affect, negate or reduce any sums that are due and owing to us under the terms of this agreement). This agreement deals with all the work we do up to that point.
Because of the way the rules governing solicitors’ fees work, our plan is to charge for our services in the following way:
- Fixed fee (payable by 24 equal monthly instalments) – Before we enter into a payment agreement, we will review your case to enable us to assess whether there is merit in pursuing your case further. You will then pay us a fixed fee for the work carried out on your file; the amount of this fee will be agreed with you before the plan commences. This will be payable in 24 equal monthly instalments. The amount of our charges will under no circumstances exceed 50% of your overall debt level.
- Termination of agreement – If we advise you that there are no defects in any of your credit agreements, and no other legal claim arises out of them, or we are unsuccessful in our negotiations and we advise you not to issue proceedings we will end the agreement at that point.
- Termination of agreement (and consequential hourly rate basis payment liability) – If you terminate this agreement by missing monthly payments or for any other reason not agreed to by us, you must pay us those fees that we would have charged you if we charged you by the hour, as stated in the terms of business; similar provisions apply if we must terminate this agreement because you have not abided by your responsibilities; and
The basic hourly rate for work done on your file is as follows:
Solicitors of 8 years’ post qualification experience or more – £300.00 per hour. Solicitors and Legal Executives of over 4 years’ post qualification experience – £250.00 per hour. Other Solicitors or Legal Executives – £200.00 per hour. Trainees, paralegals or equivalent – £161.50 per hour.
- Disbursements/expenses – Finally, in addition to the above (and regardless of the outcome), you must pay any disbursements or expenses as and when they arise; this agreement does not cover any such payments, however, as you must pay those directly.
Disbursement means the payment of money from a fund or account. Disbursement is a noun that describes the spending or distributing of money.
Please note, for the avoidance of doubt, that any monies that you pay to us is in respect of our fees are payments to us and (unless we refund them) will not be available for the purposes of reducing your debt(s).
For the sake of completeness, we should point out that if you enter into a conditional fee agreement and if you are successful, we may be able to claim some or all our fees back from your creditors. If this happens, you may technically be liable for more than 50% of the amount of the debt that you avoid having to pay, but the amount you will personally pay will be limited to that figure.
As such, if the matter gets that far, you will—for all practical purposes—continue to benefit from the caps on the fees.
Please be assured that we would never charge you twice for the same work. The fees have been carefully structured to ensure that that this does not happen.
Unless and until proceedings are issued, there is (for all practical purposes) no chance that you may be required to pay any costs incurred by your creditors. This may change if proceedings are issued (either by us, or against you). If this happens, we will give you further advice about that risk at the appropriate time. If you would like any further information on this, please feel free to ask.
Please note that there are other ways you could fund this matter. One option would be to fund the matter by paying us on an ordinary “pay-as-you-go” basis (i.e. based on an hourly rate). Unless you tell us to the contrary, we will work on the basis that you have chosen to fund the matter by way of this agreement. If, at any time, you would like to change the way in which this matter is funded, please feel free to discuss the matter with us.
You may have an insurance policy (e.g. home or motor) with legal expenses cover which provides a means of funding this matter. If you have such cover, or you want us to check for you, then please send us copies of all relevant documentation to consider. If you are in any doubt, please ask us to check any policy that you have. Community Legal Service funding (often known as ‘Legal Aid’) is not available for this type of work. It is unlikely that a trades union would fund this matter, but if you would like us to check, please let us have details of any relevant membership.
It is difficult to predict the timescale of your matter since there are several factors involved. Its progress may depend upon the extent of the opposition put up by each of your creditors, the value of the matter and other relevant factors. We will update you regularly throughout the course of your matter in this regard.
THE TERMS OF THIS AGREEMENT
What follows sets out the terms of the agreement in more detail. For the avoidance of doubt, what is set out above is only a summary and should not be regarded as being definitive; the definitive terms are those that are set out below.
The debt and the meaning of “Win” and “Loss”
The amount that you may have to pay may be reduced in a number of ways, which may include, but are not limited to: (1) by way of set-off, (2) by way of an agreement on the part of the Creditors to reduce the Principal Sum, (3) by way of an acceptance on their part that some or all of the Principal Sum is unenforceable at that point, or (4) by way of some or all of the Principal Sum being deemed to be unenforceable at that point, or (5) by way of highlighting breaches within the credit agreement via a Letter of Claim, as a result of certain steps carried out by us. The amount of any such reduction is referred to in this agreement as “the Reduction”.
For every individual matter where, through negotiation or otherwise, we obtain a Reduction and where we reasonably and properly advise you that the Reduction is the greatest reduction that we are likely to achieve, that will count as a “Win” (in which case your matter will have been “Won”). When advising you on this point, we must act in your best interests and in accordance with your instructions, but we will not be required to work in an uneconomic way, nor will we be required to accept any instructions from you that are unreasonable or disproportionate. For the avoidance of doubt, where the Reduction is in part or in whole as a result of an acceptance on the part of the Creditors that the debt is unenforceable, that will count as a Win notwithstanding the fact that you may still be liable for the individual matters Principal Sum. If you would like us to explain this to you in more detail, we would be happy to do so.
Where there is more than one Creditor, there will be a “Win” only where we have given you the advice referred to above in respect of each individual Creditor.
If we reasonably and properly believe that we have failed and will fail to secure a Reduction, then we must tell you of this fact within a reasonable period. If that happens, there will have been a “Loss” and your matter will have been “Lost”.
If there is a dispute regarding our decision as to whether the matter has been Won or Lost is reasonable and proper, we agree that the Disputes Resolution Procedure (set out below) may apply. In the alternative, the court may rule upon the point.
Interim agreed fees
Interim Agreed Fees are:
24 monthly payments of £ (insert amount) will be collected by direct debit to commence on (Date) as a fixed fee for assessment of your case and initial work.
Where appropriate (and certainly where this agreement has been Terminated), we may claim a lien over any monies or other property of yours that we hold, including any monies we hold for you in our client account. For the avoidance of doubt, unless the court orders otherwise, we will be entitled to keep all your papers and documents whilst there is money owing to us.
Dispute Resolution Procedure
If there is a dispute between us about how much is payable, then you are welcome to invoke our complaints procedure (see below). That said, given the technical nature of this matter, we have put in place a dispute resolution procedure for dealing with certain matters in an economical and efficient way. You do not have to use that procedure, but it you fail to do so and if the matter subsequently comes before a court, you may be penalized in costs.
If such a dispute arises and we are not able to resolve it informally, then we will (after having consulted with you and subject to us both agreeing) instruct an independent barrister of no less than 7 years’ call to express an opinion on the dispute. We will both be able to make written representations to that barrister. The barrister will adjudicate on the dispute in writing. If the dispute resolution procedure is used, then unless the court orders otherwise, his or her decision will be binding on both you and us. Unless the barrister believes that you have acted unreasonably, we will bear the barrister’s fees. If the barrister believes that you have acted unreasonably, then you may have to pay some or all those fees, the amount of which will be determined by the barrister.
Nature of this agreement
This agreement is a Non-Contentious Business Agreement within the meaning of Section 57 of the Solicitors Act 1974 (as amended). For the avoidance of doubt, this means that (save as set out above) you not entitled to challenge the reasonableness of our fees by asking the court to assess those fees. If, however, you believe that this agreement is unfair, then you may be able to apply to the court to have it set aside. We would not be able to advise you about how to go about doing that, but should the need arise, we would be happy to tell you how to go about obtaining advice on that issue. Moreover, we would also be happy to allow you to invoke our disputes resolution procedure, should that be appropriate.
Your continuing instructions in this matter will amount to your acceptance of this agreement; if, for whatever reason, this agreement is not signed by either you or us, it will be deemed to be signed by virtue of that fact.
If any term of this agreement, or any part of such term, is or becomes illegal, invalid or unenforceable in any respect, then the remainder of this agreement will remain valid and enforceable.
We may bill you at any time when fees are due. Bills for agreed fees and contingency fees will be for those fees only and should not be regarded as being a final statute bill for any given period. If we bill you for work done on an hourly rate basis, then the period covered by that bill will be stated on the face of bill. Unless otherwise stated, bills will be payable immediately.
If any bill remains unpaid or only partly paid for more than 30 days, we are at liberty to charge interest on the outstanding amount in accordance with article 5 of the Solicitors’ (Non-Contentious Business) Remuneration Order 2009 (asamended). For the avoidance of doubt, if you elect to pay the contingency fee by instalments, no interest or charges are payable, providing that the instalments are paid on time.
Authorisation and Regulation
We are authorised and regulated by the Solicitors Regulation Authority (SRA).
We are not authorised by the Financial Conduct Authority; but we are included on their register (www.fca.org.uk/register). so that we can carry on insurance mediation activities, which is broadly the advising on, selling and administration of insurance contracts. This part of our business, including arrangements for complaints or redress if something goes wrong, is regulated by the SRA.
The Law Society of England and Wales is a designated professional body for the purposes of the Financial Services and Markets Act 2000. The SRA is the independent regulatory arm of the Law Society. The Legal Ombudsman is the independent complaints handling service set up by the Legal Services Act 2007 (as amended). If you are unhappy with any insurance advice you receive from us, you must raise your concerns with any of those bodies and not with the Financial Conduct Authority (www.sra.org.uk).
Provision of Services Regulations 2009
This requires us to give some additional information. Our postal and email address, and telephone numbers are above and on WWW.MCDERMOTTSMITHLAW.COM. This firm is a limited liability company, incorporated in England & Wales. We are Solicitors in England & Wales, authorised and regulated by the SRA. Our SRA number is 627762.
What Happens Next?
Please sign and return
- a copy of this letter,
- completed income and expenditure form,
- forms of authority for disclosure of documents from your creditors.
- 2 forms of ID (1 photographic if possible) i.e. passport, driver’s license.
Please do not hesitate to contact me if there are any queries about any of the above, and I will, of course, keep you advised of all developments.
I look forward to hearing from you.
McDermott Smith Law Solicitors
This agreement is a legally binding contract between you and McDermott Smith Law Solicitors
We, the Solicitors: McDermott Smith Law Solicitors
You, the client:
The Fixed Fee £ (insert amount) payable in total 24 equal Monthly instalments and this will be taken by Direct Debit to commence on (Date).
For the avoidance of doubt, you should note that agreed fixed fees are monies that belong to us. They are not payments on account and are not held in our general client account.
I have read the terms set out in this agreement and I agree to them.
Notice of right to cancel
You have the right to cancel this contract, without reason, if you wish and can do so by delivering, sending (including via e-mail) a cancellation notice to the person mentioned below at any time within 14 days starting with the day you received this notice.
The person to whom a cancellation notice may be given is Leon Doherty citing the case reference.
You can use the cancellation form provided below.
If you wish to cancel the contract you must do so in writing and deliver personally or send this to the person named below.
McDermott Smith Law Solicitors,
St Hugh’s House
Case reference [insert]: …………………………
I/we hereby give notice that I/we wish to cancel my/our fixed fee agreement with your firm.
Signed: ………………………………. ………………………………….
Name: ………………………………. ………………………………….
Address: ………………………………. ………………………………….
Date: ………………………………. ………………………………….