How to sue in the UK small claims court
Our guide to taking someone to court
How to sue in the UK Small Claims Court
As part of our Cowboy Customers series we have covered how to deal with a customer that won't pay your invoice, now it's time to take it up a notch.
So, a customer has not been just a slow payer. They have either ignored all your reminders to settle their outstanding debt, made a series of promises that they haven’t kept or simply refused to pay.
You have now concluded that they will never pay unless you find a different way of going about things. The question is can you sue someone that owes you money and is it easy enough to be worth doing?
The short answer is “yes” and it almost always involves the “small claims court”. This article is designed to give you a good overview of how to sue someone by going down that route.
First of all, a disclaimer. This article is not meant to constitute legal advice. It is just a layman’s overview of the process. To be absolutely sure of your ground, you should seek legal advice from a qualified solicitor specialising in litigation.
Why use the Small Claims Court?
The problem with chasing debt is that it can be a one-way process. You do all the running whilst the debtor simply sits around doing nothing. They feel they can because there are no consequences.
Once you use the small claims court that all changes. If they do nothing and you have a reasonable case, you will get a default judgement. With a default judgement, they will have a CCJ (County Court Judgement) against their credit record. This will significantly impact their ability to borrow money. And if they still don’t pay up, you can appoint a bailiff who can seize their assets to meet the debt. There are also several other options, all of them unpleasant for the debtor.
When you file your case, you must be able to show that you have tried to settle the claim before taking court action. This means:
- You should have made your claim in writing, giving the other person a reasonable amount of time to pay.
- You should have warned them that you will take court action if they fail to pay within the time that you state. A suggested communication is shown later
Before you use the Small Claims Court
In order to be in a good position to take legal action when a customer doesn’t pay, it will help enormously if:
You have a written agreement about the work you did and the cost involved
You have proof at each stage of what things happened. For instance, this could be photos of the work as it was completed, and ideally signed statements from the client about the completed work
You have proof of your chasing the debt – emails, texts etc. If you had a phone call a follow up email confirming the conversation can help enormously
If you don’t have this, it doesn’t mean that you cannot pursue your case. After all, verbal agreements are legally binding. However, it does mean that there is more risk that you won’t win. If you used an app to generate your quotes and invoices, you are more likely to have all of the evidence available.
The thing you must do, however, is to show that you have given them notice. That is you must have tried all that you could to get payment. Do this by sending two statements by email and then a final one through the post by recorded delivery with a red sticker waning them that this is a final request. You can get these red stickers from www.LabelsOnline.co.uk and search for "final".
What qualifies for a small claims court case?
Suing in the small claims court applies to a total amount claimed of up to £10,000. Claims over £10,000 are more complex and expensive and won’t be covered here.
Apart from the £10,000 limit (in Scotland the “simple procedure” maximum is £5,000; in Northern Ireland it's £3,000 both with similar processes), the following must apply:
- The claim needs to be made by a single person or organisation against a single person or organisation both based in England or Wales. The process is different in Scotland and Northern Ireland
- If they are individuals, the claimant and defendant need to be 18 or over
- The claim needs to be for a money amount and not related to a tenancy or injury
- Claims in England, Wales and Northern Ireland must be lodged within 6 years and within 5 years in Scotland
Small claims are actually handled by the standard local county court, but with special rules to make the whole process as quick and easy as possible. Strictly, the process is the “Small claims track” rather than a special court. Cases that actually make it into a court hearing are expected to take 2 hours or less.
Finding our guide interesting?
If you are finding our guide interesting and would like to learn more about how the Powered Now app can help you to run your business, please just get in touch. We offer a free one to one demonstration of our software with a UK business expert. Sessions are usually 20 - 30 minutes with plenty of time for questions.
Can you take a national company to the Small Claims Court?
The short answer is yes. As long as the conditions above apply, it doesn’t matter how large the business is that owes you money.
Is £500 worth going after someone in small claims for?
That really depends. If you have never done a claim before, it may be that the hassle of learning the process outweighs the benefit. If you are a veteran of previous claims, it may well be worth it.
What are the costs for using the Small Claims Court?
The fee for filing a court claim online ranges from £25 for a claim of less than £300 on a sliding scale up to £410 for a claim for between £5,000 and £10,000. When submitting your claim, never leave the “Amount claimed” blank.
The big benefit is that costs are fixed for both parties so you can't be hit with a huge legal bill from the other side if you were to lose.
You may get interest on the outstanding debt at a rate of 8% per annum (at time of writing) for residential customers and the rate specified in your terms and conditions for commercial customers. You don’t include this amount in your “Amount claimed”.
If there is unreasonable behaviour by either party or the case is complex with many witnesses the small claims process may not apply. It may then need to go down another track. The judge will decide if this is the case. However, it’s fairly unlikely.
Resolving the dispute
The court encourages the parties to go to mediation before going down the legal route but this isn’t compulsory. If there is a genuine dispute about the work and therefore the price that should be paid, you should definitely try mediation. If the debtor isn’t responding and the facts are straight-forward, it’s probably best to get on with the court filing.
Mediators to help with genuine disputes can be found at civilmediation.org/for-the-public/about-mediation/.
Starting the process, example Small Claims Court letter
As the first step, I would recommend sending a letter or email that reads something like this:
After repeated attempts to ask you to pay the attached invoice, I still have no record of receiving payment from you. I am therefore giving you seven days notice that I will be commencing legal action. Once I file the case with the court, I will not stop the process until all costs have been met, including court costs and statutory interest. The next seven days is therefore your last opportunity to settle this amount without incurring further costs.
If you have already settled this invoice, please ignore this communication. If I do not receive cleared funds in my account by dd/mm/yy I will commence legal action on that date and the next communication you receive will be from the court asking you to file a defence.
Filing the case at the Small Claims Court
It is highly recommended that you file the case online which is both cheaper and will be much more efficient in the long run. You do this at www.gov.uk/make-money-claim.
After you have gone through the questions that determine that you can validly use the small claims track, you will need to login or create an account.
You will be asked to complete each of the following sections:
- How you have attempted to resolve the dispute before making a claim
- Your details
- Their details
- Claim amount - Most important
- Claim details
The “Claim amount” should list each thing that you are claiming for each with the associated amount claimed, not including interest or any court costs.
The “Claim details” is your statement of the case. It should cover what happened, who is responsible and why. You should simply state the facts in plain terms without adding any emotive commentary but make sure that you include a fair amount of detail. You supply a detailed timeline separately.
In the first box for simple cases you could put something like:
“I was asked to quote for a job xxxxxxxx by X. I issued the quote (see Appendix 1). X accepted the quote.
I visited X’s house on three occasions to complete the work exactly as outlined in the quote. When I finished, X did not raise any issues.
I invoiced the agreed amount (see Appendix 2). X has not paid what is due after 3 further requests which he completely ignored except after I said I would take legal action when he said he was dissatisfied with the work without specifying why.”
Obviously, the description could be significantly longer than this.
Once this summary has been entered there is a list of dates with descriptions where you put your timeline of events.
The next page has the list of evidence so this is where you would put “Appendix 1” and “Appendix 2” from above. You do this for the judge to make it easy to find things. The evidence consists of:
- Contracts and agreements
- Expert witness (only allowed if the court has agreed to this)
- Letters, emails and other correspondence
- Photo evidence
- Statements of account
- Other evidence
Your objective is to establish that what you are claiming is on the balance of probabilities the truth. Remember if someone is given a contract and pays the money related to it and the work is done, the contract exists whether it has been signed or not as it has been “accepted by conduct”.
Finding our guide interesting?
If you are finding our guide interesting and would like to learn more about Powered Now please just get in touch. We offer a free one to one demonstration of our software with a UK business expert. Sessions are usually 20 - 30 minutes with plenty of time for questions.
After you have filed your claim, both you and the defendant will be sent a copy of the claim. The defendant is sent a response pack which they can use to respond. This enables them to state their defence, if any.
The great benefit is that while they can have ignored your letters, emails and phone calls without being put in a worse position, if they ignore the court it starts to count against them. They are ignoring the court, not you! And they only have 14 days in which to respond. They should respond either with their defence or an “acknowledgement of service” which then allows them a further 14 days to put together and file their defence.
In practise, many people will settle up once they have been sent the claim.
What happens if you lose in the Small Claims Court?
If you lose, you will have lost the court fees, your time and you will need to pay fixed and limited costs for the other side. The advantage of any claim that stays on the small claims track is that you are not at risk of paying a large amount of legal fees for the other side. This risk just exists if the claim goes down a track different to the small claims track.
What happens if they admit the case but don’t pay?
If they aren’t wealthy or have obvious assets, they may propose a repayment schedule in response to your claim and realistically, you will probably have to agree. This is because the court is likely to go with it anyway. If they do have assets and decent income, it is more likely that you can get full payment immediately.
The court case
If you actually need to attend the court hearing there is some very useful help that can be found by searching Google for “Citizens advice Going to a small claims hearing”.
Here’s a quick summary:
- There will only be a hearing if the judge believes that this is necessary
- You will be sent the date 21 days in advance with details of what to do, which you should follow to the letter
- You'll be asked to send copies of documents to the court and the defendant. You should send these by recorded delivery and keep proof of postage
- If you’re worried about the hearing, attend one beforehand to get an idea what it’s like. Ask your local county court if there’s one you can sit in on
- Prepare some questions to ask the defendant in case you get the chance
- Re-read all the material just before the case so that it’s as fresh in your mind as possible
- The hearing will be in a normal room and the judge will ask questions. You'll sit separately from the defendant
- You should take originals of documents with you, have them in date order
- You may be asked by the judge to verbally summarise your case
- Make notes of anything the defendant says that you think is wrong so you can point it out afterwards or ask questions about it
- The judge may decide to let you and the defendant ask each other questions
- You can take a friend or relative with you for support. They’re allowed to sit with you and can take notes if you think that would help. They'll only be allowed to speak on your behalf if they’re with you in court and the judge has said they can
- The judge will give their decision at the end of the hearing and explain the reasons
- If you win, the judge will order the defendant to pay you some or all of what you claimed, interest if the award is more than £5,000, expenses like court fees, reasonable travel expenses and up to £95 in lost wages for you or your witnesses
- If you lose you might have to pay some of the defendant’s costs - like travel and lost wages
If the person or company you are lodging your claim against doesn't reply to your claim within 14 days, you can ask the court for a “judgment by default” and you may win your case by default providing it is sound.
Enforcing a judgment
Occasionally someone who loses a case still doesn’t pay up. Then you need to “enforce the judgement”. After the judgment, the defendant normally has 14 days to pay. If they don't, apply to enforce the judgment. You don’t need to give notice but write a letter or email to them and tell them what you are going to do. You can then include the letter or email in your witness statement when you apply for enforcement.
You have two routes that you can take:
- Country Court bailiffs. The bailiffs work for court, the cost is £110, it takes an average of 60 days to collect the money
- High court enforcement. This is only allowed if the judgement is for £600 or more. This is the recommended route
The details of the High Court Enforcement route are:
- The success rate is much higher because the High Court Enforcement Officers (HCEOs – previously high court sheriffs), are authorised by the Lord Chancellor, work privately, have more powers and are paid on results
- There is a £60 charge for transferring to the high court for enforcement using Form N323
- There are then similar fees to the county court bailiff to get a writ of control using form PF86A
- You supply to them the judgement, the court fee and as much information about the debtor as you can
- If the bailiff’s fail to recover the money you must pay them £75, otherwise their fees come from the defendant
If the defendant has moved the HCEO’s tracing agents can be instructed to find them before enforcement commences.
Other options when you have judgement
There are a variety of other options that you can use to enforce your judgement other than bailiffs or HCEOs. These include getting the debtor into court to explain their circumstances, deducting the debt from their earnings at source, getting their bank to directly satisfy the order and making them bankrupt. Hopefully, none of this would be required and bailiffs or HCEOs is probably an easier and more common route.
The full rules
To see the full rules of the Small Claims Court search on Google for “courts part 27 – the small claims track”.
Go for it
Like everything in life, if you have never done it, the thought can be daunting. Claiming through the court system is a bit like that even though it is fairly simple. If you have a straight forward case that isn’t really in dispute, I would encourage you to give it a go.