Do you have a debt owed to you of less than £5,000?

If you are owed less than £5,000 then you may wish to issue court proceedings yourself so as not to incur substantial legal costs which can outweigh the value of any claim.  The court’s small claims process is aimed at individuals acting without legal representation. 

How do I start a claim?

Before you start the process, it is important to check that the debtor is worth suing.  If the debtor is a company then you should ensure you have the correct company name and provide the company registration number.  You can find this at: www.companieshouse.gov.uk.  Basic company searches are free. You can also check that the company is still in existence and has not been dissolved or struck off.

You will need to provide full details of the claim, the amount owed to you and ensure that you provide the exact details of the individual or company you are claiming the money from (‘the Defendant’).  If the Defendant is a company then you should ensure you have the correct company and provide the company registration number.  If the Debtor is an individual, you should consider trying to find out if he or she owns property or is in work or running a business.  It is not worth trying to sue a “man (or woman) of straw”!

There are two ways to start a claim in the county court; one is through the on-line procedure (http://www.moneyclaim.gov.uk).  Alternatively, you can print off the form (N1) from the court website, (www.hmcourts-service.gov.uk) fill it in and then take it to the court for issue. 

Once the Claim Form has been submitted to the court and the court issue fee paid, it will arrange for the Claim Form to be served on the Defendant.  The Defendant has a period of between 14 and 28 days from receipt of the Claim Form in which to file (i.e. to enter on the public official record at court) an Acknowledgement of Service and a Defence. If an Acknowledgement of Service is not filed, then the Defendant has a period of 14 days from receiving the Claim Form in which to provide a Defence. 

What do I do if the Defendant does not respond?

If a Defence is not received within either 14 or 28 days, you should complete the Request for Judgment form, which should have been sent to you by the court. You will need to send the form to the court requesting judgment to be given in default of a Defence.

What happens once the Defendant has provided a Defence?

If a Defence is filed, the court will provide “directions” which are steps both parties need to take to get the action ready for a hearing. This may include dates by which the parties are to exchange documents and in some cases the date by which witness statements are to be exchanged and submitted to the court. Depending on the court it may set the date for a hearing at the same time. If this does not happen it will notify the parties once a date has been set. Both parties will be required to attend the hearing. 

What happens at the hearing?

The hearing is relatively informal and will take place around a large table in the judge’s room with the judge sitting at the head of the table and the parties facing each other at the sides of the table.  As this procedure is aimed at individuals without legal representation, the judge will take an active role in the hearing and ask the parties questions.  After hearing both sides’ arguments, the judge will normally make a finding and read out the judgment.  Shortly after the hearing, the court will send to the parties the order that was made by the judge which may require one of the parties to pay the other party a specified sum of money. 

Will I get my costs if I win?

In a small claim, the court does not have jurisdiction to award any legal costs, but it can award limited costs for the attendance of any witness and the payment of disbursements which will usually include the court’s issue fee and any other fees that have been necessary to pay to the court throughout the proceedings. 

What do I do when I have an order for payment and the Defendant has not paid?

The English courts do not automatically enforce court orders and therefore if a payment is required and has not been paid by the date specified in the order, you will need to take enforcement action.  If an order does not state the date for payment, it is usually implied that 14 days from the date of the order is reasonable. 

What choices are there for enforcement?

Your choice as to the means of enforcement will depend on the information that you know or have obtained about the Defendant. 

• Charging Order – If the Defendant owns property, then you could seek to obtain a charging order on that property. A charging order is similar to a mortgage and secures the debt against the property.  The Debt may be repaid if the property is sold, or in certain cases (with a high level of debt) you may be able to apply to court for an order that the property be sold to repay the Debt.
• Attachment of Earnings - If you know that the Defendant is employed and you have details of their employer, then you could seek an attachment of earnings order. This requires the employer to deduct money from their employee’s wages and pay this to you.
• Third Party Payment Order - If you have the Defendant’s bank details e.g. from a cheque, then you can apply to the court for an order requiring the bank to pay you money from the Defendant’s bank account if it is in credit. This will not work if the Defendant’s bank account is overdrawn.
• Warrant of Execution – For a fixed sum debt, if you believe the Defendant has assets, you can apply to the court for an order authorising bailiffs to enter either a business or residential address of the Defendant, seize goods and sell them. However the Bailiff can only take certain goods and they must belong solely to the Defendant.  He cannot seize goods that are owned by someone else or are on hire purchase. 
• Insolvency - You may petition for the bankruptcy of an individual or the liquidation of a company if the debt is over £750 or £800. This is a complex area of law and a potentially expensive route to follow and legal advice should always be sought before embarking on such action.
• An order for information from the Defendant - If you have very limited information about the Defendant’s assets, then you can issue an application to require the Defendant (‘debtor’) to attend court and provide information about his/her personal circumstances.