Being owed money is frustrating and unpleasant – especially if the debtor is ignoring all your phone calls and letters.
If you feel you’ve tried everything and you’re still not getting anywhere, then you may consider using the ‘Small Claims Court’ process. This is part of the County Court and was originally created to enable a layperson (someone who is not legally qualified) to take another individual to court. The maximum amount of a claim in those days was £20.
Nowadays, the maximum amount of a claim you can deal with yourself in the Small Claims Court is £10,000.
However, before you take someone to court, pause a moment to consider the likely costs:
- There is small fee to file the claim; the amount depends on the amount of money you are owed and therefore claiming for. The fees start at £25. You can see the full fee structure here: https://www.gov.uk/make-court-claim-for-money/court-fees
- What happens if the ‘defendant’ (the person owing the money) decides not to pay, or defends the action? What do you do? Well, if you decide to pursue the individual, it will most certainly incur further costs. If it gets to a hearing, then hearing fees need to be paid (anything from £25 – £410, if you issue proceedings online – slightly more if you issue in paper form). If the case goes beyond this, then you may have to apply for judgment against the defendant and possibly enforce the judgment using the help of a bailiff – incurring further fees.
If you do decide to proceed, then the first thing you need to do is to write the other party a letter clarifying why they owe you money, and that you are thinking of taking court action if the amount owed is not paid by a certain date (state the date clearly). All the necessary evidence must be provided to the other party with the letter, even though you know they have the facts already.
Writing a letter before taking any action is a very important part of the process, and fulfills what is known as the ‘protocol’. Without having done so, you may jeopardise your case if it does end up in court.
At this stage, it is also worth considering mediation. This provides individuals and businesses with a low-cost method of resolving a legal dispute, without the need to go to court. There is usually a fixed hourly fee to pay by both parties.
If going to court is your intended course of action, then after you have sent the protocol letter and the time limit for payment has passed, you will need to fill in a Claim Form N1 – either online or by downloading and printing it. You then send the completed form to the County Court Money Claims Centre in Salford, and pay the court fee (mentioned above).
What happens next depends on whether the defendant agrees to pay the amount, refuses to pay the amount, or ignores the whole thing!
The defendant has 14 days to respond, after which time, if there is no response, you may decide to issue a county court judgment (commonly known as a CCJ) against the defendant. This, in itself, has quite serious consequences for the defendant, because a copy of all CCJs go to a public company and may affect any credit searches made against the defendant’s name – a good and useful tool to add into any pre-action protocol letter that you send.
Once you have the judgment, the defendant may still choose to ignore you and not pay. In such a case, you’ll need to consider enforcing the judgment, for example, engaging the services of a bailiff to seize property to cover the amount you are owed.
You can action the entire process above without the help of a solicitor. However, if you feel you do need a bit of extra advice or support, then consider using a paralegal. Paralegals are less costly than a solicitor, and can help you in exactly the same way as a solicitor would. Check that your chosen paralegal is registered with a membership body like NALP, and holds the relevant paralegal qualifications and insurance.
ABOUT THE AUTHOR
Amanda Hamilton is Chief Executive of the National Association of Licensed Paralegals (NALP), a non-profit membership body and the only paralegal body that is recognised as an awarding organisation by Ofqual (the regulator of qualifications in England). Through its training arm, NALP Training, accredited recognised professional paralegal qualifications are offered for a career as a paralegal professional.