The Moreton Smith legal service provides access to a legal network of lawyers in more than 120 countries extending advice and cost-effective processing of legal documentation. The Para-Legal team will discuss the merits of each individual case with you to determine the chances of recovery against the cost implications of court proceedings.

We offer seamless progression from debt recovery to court action with a centralised on-line reporting service for monitoring of individual cases.

China

The court system in China is highly regionalised and it is usually best to instruct a firm of lawyers local to the debtor, since there are strict rules governing which lawyers may appear at which courts. In some circumstances, debts are limited by statute to two years, so it is recommended to commence litigation as early as possible. The Chinese courts place short and strict deadlines on the filing of papers and so pre-hearing submissions are usually complete within at most a few months of the suit being filed. Hearings generally happen quite quickly, but there is still unpredictability when estimating the duration of a case. This stems from the fact that there can often be a number of hearings, each several months apart, until all the issues have been exhausted. This means that defended litigation can run on for several years. Commonly though, cases are usually concluded within 12 months. Undefended litigation could be expected to be complete within six months to a year. Executing a judgement is usually a straightforward matter in China and usually takes around three months. The courts have wide-ranging property preservation powers, and it is often wise to secure property to meet a judgement before embarking on the substantive claim. Contingency fees are permissible for court work as well as for pre-legal debt collection.

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France

The French legal system has two methods of dealing with contractual debts. There is a simplified procedure called an Injunction to Pay, which is reserved for contractual claims, which can be handled without a lawyer unless it becomes defended. A judgement is commonly available within two to three months. However, this procedure is more commonly used for consumer debt rather than business-to-business claims because it is quite easy under the French system for the debtor to delay the action and increase the costs that must be paid by the claimant. The second route is to apply to the Juge de Référé. This also provides a speedy method to obtain a judgement, commonly within one or two months if the matter is undefended. It is slightly more expensive than the Injunction to Pay, but is a better system for defended claims. Once the judgement has been obtained a bailiff can be instructed, but these enforcements unfortunately give mediocre results, partly due to the volume of judgements the bailiff's office has to enforce. For business-to-business claims, it is then possible to apply to the Commercial Court for bankruptcy proceedings to commence. Execution procedures therefore usually last around six months. According to French law, contractual retention of title clauses are permissible but the supplier's ownership of the goods ends once they have been resold to a third party. This means that the clause is applicable only if the goods are in stock at the purchaser's premises. There is a statutory right to interest. Generally, the statute of limitations for business-to-business claims states the term as 10 years. Claims resulting from supplies from businesses to private individuals are barred by limitation after two years, unless there is a contract or an acknowledgement of debt signed by the debtor. Contingency fees are possible for pre-legal debt recovery work, but full court action is billed on a fixed fee basis. A mixture of fixed and contingent fees can be negotiated on a case-by-case basis if preferred.

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Germany

In order to obtain an enforceable judgement, the German law provides two procedures. The first is to obtain a default summons, which is an inexpensive and timesaving way of obtaining an executory decree against a debtor. The second, a lawsuit, usually takes much longer and involves much higher costs. However, a default summons is only advisable in cases where the debtor has not yet raised an objection to the claim. If the matter is likely to become defended, a lawsuit is necessary. Where a matter is undefended, a judgement could be obtained in two to three months, with defended actions taking approximately a year. Costs are recoverable from the debtor in the event of a successful action. Enforcement procedures can be carried out by attachment of property, bank accounts or other assets. The German system also has a procedure similar to our Oral Examination to ascertain the assets possessed by the debtor. However, in Germany, this statement is held on a register and consequentially the debtor becomes unable to gain any further credit. If all other enforcement measures have been fruitless, it is possible to file a petition for bankruptcy. This is very costly and dividend payments are not common, so generally this is only used to put pressure on the debtor. Claims are barred by the statute of limitation after two years if the debtor is a private individual, and after four years if the debtor is a business. The period of limitation always begins at 31st December of the year in which the claim arose. The German system allows for contractual interest up to a maximum of 25%, and for statutory interest of 4% for individuals and 5% for businesses. Contractual retention of title clauses can be agreed in Germany without any reservations.

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India

Indian law was handed down from the British and has altered very little since independence in 1947. However, despite an extremely rich legal tradition and an array of quality practitioners, the Indian court system has an incredibly chaotic reputation. Cases often take between six and eight years and it is not unheard of for them to last for several more. Reforms to the judiciary have been discussed, though little, as yet, has changed. As a result, it is now increasingly common for commercial disputes involving international companies to be resolved in arbitration, or an alternative form of dispute resolution, and arbitration clauses can be written into commercial contracts. Since litigation can be unpredictable in duration and complexity, fixed fee systems commonly operate in India. Contingency fees are banned by the Indian Bar Council, however, fully contingent fees are available for pre-legal debt recovery work.

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Israel

Claims in Israel will commonly be heard in the Magistrate's Court, with appeals escalating to the District Court. If an action is undefended, a default judgement can be obtained in three to six months, and defended actions can be anticipated to take several years. Contractual interest may be added to the debt, or alternatively statutory interest can be awarded by the court, which is 4% to 8% plus linkage to the Cost of Living Index. Collection fees may not be added to the debt. Judgements in Israel remain on the file for 15 years and in special circumstances they remain even longer. The Israeli statute of limitation is seven years, although it may be extended in exceptional circumstances. Enforcement procedures are handled through the execution office and include attachment of property, bank accounts and other assets. In certain cases, a warrant for arrest may be issued. An additional fee of 1.5% of the judgement amount must be paid to initiate enforcement proceedings. In Israel, it is a crime to issue checks without sufficient funds and so in the case of a dishonoured cheque, the judgement stage may be omitted and enforcement procedures may be commenced immediately. Lawyers' fees are based on a retainer and payment in advance, irrespective of the success in collection.

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Jamaica

Under the Jamaican legal system, a court action is commenced by issuing a Writ of Summons. If the matter is uncontested, a default judgement can be obtained within three months. However, if a defence is filed, it is common to wait three or four years for the trial. Claims can be pursued through the Resident Magistrate's court or through the Supreme Court of Judicature of Jamaica, although the latter has a minimum claim value of J$100,000, which equates to approximately £1,000. Lawyers' fees consist of a retainer and a fee calculated on an hourly rate, plus disbursements. It is possible to recover these costs from the debtor at the award of the court.

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Nigeria

Nigerian lawyers operate on either a fixed fee basis, or alternatively contingency fees are available, although they are relatively expensive. A decision on the preferred pricing structure can be made on a case-by-case basis. Court fees are calculated on a graduated basis depending on the sum claimed. Local court costs are not expected to exceed 2% of the amount claimed, and this amount increases for service outside the major cities. In the event of a successful action, costs are recoverable from the debtor at the award of the court, but they are known to be conservative. Pre-legal debt recovery work is available on a contingency basis. Judgement might be available within six months when it is undefended but defended actions may take two years where the defence is straightforward, and longer where there are complications. There are new High Court regulations coming into force in the early part of this year, which are aimed at blocking a lot of the avenues for delay, and it is hoped that these will significantly reduce the time frames involved in such matters.

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Pakistan

Pakistan's legal system is primarily based on a combination of English common law and, to a lesser extent, the Islamic legal code of Sharia. In commercial law matters, English case law remains a primary source of authority. The country is divided into four provinces and a High Court exists in each, each with a chief justice and a number of other judges. It is necessary to apply to the court for a decree and it matures after it has been through any necessary appeals or revisions. Enforcement procedures can then commence, which include attachment of property, bank accounts and other assets as well as custodial sentences. Legal fees consist of a small retainer, with the majority of the fee being contingent upon successful recovery. The Pakistani legal system has many nuances, which mean that the duration of a court action can be difficult to estimate. A decree can mature in a few months, or can take several years.

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Spain

Spanish law, similar to English law, permits interest (contractual or statutory) to be applied to the debt and contractual retention of title, provided the goods can be identified exactly. However, unlike English law, penalty clauses can be written into the contract of sale, specifying a certain amount of money that has to be paid by the debtor if there is a breach of contract. Statute of limitation generally allows 15 years for the debt to be paid. Spain has a simple court procedure for small debts, similar to our small claims track, and after this, a more complex procedure for larger debts requiring both a solicitor and a barrister. Basic enforcement procedures are similar to our own. The Spanish legal system can be quite lengthy, taking around 18 months to get a judgement and up to three to four years in some cases. The Spanish Bar Association does not allow lawyers to charge fees on a contingency basis, but fees can be split to include a fixed and a variable fee, so that the total fee is proportionate to the amount recovered. These fees are largely recoverable from the debtor in the event of a successful conclusion. Finally, Spanish courts, as well as most lawyers and other businesses, close during August, and at this time of year it becomes difficult to get debts paid, particularly through the legal system.

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Taiwan

Taiwan's legal system is based on a combination of Continental European civil law and traditional Chinese law. Amendments to court procedures were introduced last year, including the introduction of new cross-examination procedures and the banning of litigants-in-person in the Supreme Court. There have been increases to the civil court fees, and rule changes that require a bond for deferring parties in civil actions, encouraging matters to be dealt with more swiftly. Fees are charged on an hourly basis, though flat fees can be negotiated, depending on the nature and strength of the case. A case can take from six months to two years to complete. The appeals process is generally quite quick, around six months or less. Court fees are generally around 1-3% of the amount claimed, depending on the stages of litigation required. Local experience informs us that for small debtors, enforcement can be difficult since the Taiwanese system makes it easy for debtors to conceal assets.

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Mexico

In Mexico, claims can be presented in either the Ordinary or the Mercantile Court system. The distinction is one of supporting documentation. There must be firm evidence such as a contract for a case to be considered Mercantile. Where the only evidence available consists of invoices, proof of delivery, and other communication between the parties, the claim must progress through the Ordinary system. It may take up to a year to satisfy a judge in the Ordinary court that there is sufficient evidence for the case to be considered in the Mercantile court system. Claims in the Mercantile system take around two years to complete, so cases that originate in the Ordinary system can have a total duration of up to three years. Lawyers' fees can be paid on a contingency basis, for both pre-legal collection work and also for full court actions.

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The Netherlands

The Dutch legal system has a simplified procedure for small claims of up to around ?1150.00, whereby a judgement can be obtained if the debtor fails to respond after 14 days. Enforcement procedures can begin if the debtor fails to make payment within a further 14 days. Larger debts are generally dealt with in the cantonal or regional court systems, and these require full hearings. Here, judicial procedures can be very time consuming, especially where technical issues are involved, often lasting about 18 months from beginning to end. However, there are summary proceedings available for urgent matters, which are more informal and do not permit any written submissions beyond those called for by the President of the court. Execution of the court order is by way of a bailiff who will seize and sell the debtor's assets, or by attachment of assets in the possession of a third party. Contractual retention of title is normal business practice in the Netherlands, however, once the goods have been sold on to a third party, title is lost. There is also a statutory right to interest, the rate of which is amended annually. Debts are limited by statute normally to five years, although it can be from three to 20 years in some circumstances. Contingency fees are available for pre-legal debt recovery work, but lawyers' fees are payable on a fixed fee or hourly rate basis once a full court action has been commenced.

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Philippines

Court action in the Philippines is subject to rigid procedures and timescales. However, since there are many appeals available to the debtor, and also due to the over-burden on the court system, a defended case can still be expected to last at least two to three years. An undefended action can be completed in a much shorter space of time, usually two or three months. Also, it is important to note that should judgement be obtained, costs are not automatically awarded by the court. Instead, there are a limited number of situations in which fees may be recoverable. Lawyers fees are often not seen by the court as legal costs and such are frequently not recoverable. Pre-legal representation is available on a contingency basis, however once a court case has been commissioned, lawyers' fees are payable on an hourly rate.

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Russia

In Russia, business-to-business claims are heard in the Arbitration court of Russia. Court fees are generally recoverable from the debtor, however legal expenses are not. A separate law suit must be filed in order to claim court fees from the debtor. Where the defendant is an individual, the case is heard by the Civil Court, and in this case, it is possible to recover legal fees as well as court costs from the debtor. It can take between two to five months to obtain a decree, plus a further two months approximately to execute the judgement. Defended cases take a variable amount of time, depending on the complexity of the case. Pre-legal debt recovery fees are available on a contingency basis, however, lawyers' fees are payable on an hourly rate once a court case is commissioned.

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United Kingdom

There are three streams for issuing a claim in the English court system, and the choice depends on the size of the debt. Claims under £5,000 are heard in the small claims track, designed to provide a fast and inexpensive method to resolve debt collection issues. This track is informal in nature, and it is intended that parties can represent themselves. Therefore, lawyers' fees are generally not recoverable from the debtor, although court costs are. Claims that are under £15,000 but over £5,000 are heard in the fast track and claims that are greater than £15,000 are heard in the multi track. In these two tracks, costs are recoverable from the debtor at the award of the court, and where costs are substantial, expect to be awarded around two thirds to three quarters of your costs as the winning party. There is a statutory right to interest at 8% over Bank of England base rate, and in addition there is a statutory right to claim debt recovery costs of a variable amount dependent on the size of the debt. The use of a retention of title clause is common, and title can be retained after goods have been sold on to a third party, provided the goods remain unprocessed. It generally takes around two months to obtain a judgement on an undefended matter, and defended matters can take between six months and two years, depending on the complexity of the case and the size of the debt. Enforcement procedures are of variable duration, depending on the nature and availability of the debtor's assets. The court fees payable to issue a claim are on a sliding scale, based on the size of the debt, as illustrated in the following table:

Lawyers' fees are payable in addition to the court costs and these are charged on an hourly basis and recovered from the debtor where possible.

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