What is a small claim?
In England and Wales, a small claim is a claim for money valued at less than £10,000. This can arise from a range of circumstances, including compensation when:
- Work you have paid for is faulty
- You have received faulty products
- A customer or friend/relative has not received goods ordered
- You have not been paid for providing goods or a service.
Throughout this article, for example purposes, we will refer to a scenario in which someone has not been paid for goods or services they have provided. However, the procedure is largely the same for claims for compensation for faulty products or faulty workmanship.
A different procedure applies if you have been the victim of personal injury or medical negligence. If you believe you have a claim for personal injury or medical negligence please contact Gemma Bean in our personal injury and medical negligence department on 01924 387 110 or visit our personal injury or medical negligence pages and request a callback.
I believe I am owed money. What can I do?
The first stage of making a small claim for recovering money owed is to send a letter of claim or letter before action to the person or organisation who owes you money. If your claim is for payment of a debt arising out of non-payment of invoices for goods or services provided to a customer, you are required to follow the pre-action protocol for debt claims.
In a debt claim, the letter before action must contain certain information about the debt. Further information and guidance about what to include in a letter before action can be found on the government website.
Where your claim arises out of faulty products, you should check the company’s website for their complaints procedure. If you have paid for work which is faulty, the Citizens’ Advice Bureau has prepared a useful guide of how to try and resolve matters with the contractor.
I sent a letter before action but the issue is not resolved, what do I do next?
If you are unable to resolve the dispute after sending a letter before action or dealing with the contractor or provider, you may wish to ask the provider for a copy of their complaints procedure. Many organisations have a complaints procedure that enables you to contact a designated person or department within the business and raise your complaint.
The complaint will then be investigated and you will receive a response with details of the outcome of that investigation and options available to you, should you still wish to pursue the complaint.
Alternatively, there may be an ombudsman for the type of organisation you are in dispute with. Ombudsman services act as a middleman between you and your opponent and can assist you to reach a compromise which works for all parties. Three important ombudsman services are:
- Ofcom deal with communications service disputes
- The Furniture Ombudsman help with retail complaints
- Ofgem aid in energy supplier disputes.
My dispute is still not resolved, what else can I do?
You may want to consider making a claim to court to recover the money or compensation owed to you when the above steps have not worked. To make a claim to court you will need to complete an N1 claim form and pay a court issue fee. The fee is dependent upon the value of the claim and it is important that the correct fee is paid, otherwise your claim will not be processed.
The Claim Form is available online or from your local court. Guidance notes are also available to assist in completing the form correctly. Once completed, you can submit your claim online. Or you can do it by post, where you should send three claim forms (one original and two copies are acceptable) to:
County Court Money Claims Centre
PO Box 527
When the Court receives the claim form and fee, they will issue the claim and provide a claim number. The court will send one copy to you and one to the defendant, at the address provided on the claim form.
The defendant then has 14 days from the date the claim is issued to file an acknowledgement of service, confirming they have received the papers and indicating how they wish to deal with the matter. The date by which they are required to do so will be clearly stated on the notice of issue. When returning the acknowledgement of service, the defendant can:
- Admit the amount owed and propose a payment plan
- Admit some of the amount owed
- Dispute that they owe anything.
If they admit the amount owed and propose a payment plan, you must decide whether you agree or disagree with the payment plan. If it is agreed, the defendant will be required to pay you as per the agreement. When the amount outstanding has been paid, the matter will be resolved.
What if no agreement is reached?
Should the defendant dispute any or all of the debt owed, they are required to file a defence within 14 days of the acknowledgement of service. The defence should set out the defendant’s position as to why they dispute the amount owed.
If the claim is defended you will be sent a directions questionnaire. This asks for further information about:
- Your availability to attend a court hearing
- The number of witnesses you want to appear on your behalf
- Which court you would prefer any hearing to be in.
You will also be encouraged to try and resolve your dispute using the Small Claims Mediation Service, which is a service run by court staff that encourages the parties to enter into negotiation in advance of any eventual court hearing. If you decide to use the Small Claims Mediation Service, your claim will be stayed by the court – it will not progress – for a period of one month, to allow negotiations to take place trying to resolve the issue.
If mediation is unsuccessful, or if you choose not to try, your case will be listed for a hearing and a further court fee will payable. The court will send you a notice of the trial date and directions. These are procedural steps which must be taken in advance of any court date. They typically include a requirement to prepare, send to the court and your opponent copies of witness statements from the witnesses who will give evidence at trial.
It is important that you carry out these directions, as a failure to do so may result in your claim not proceeding and being struck out by the court. For assistance with what to expect at any hearing and how to prepare, please see the guidance available on the Citizens’ Advice Bureau’s website.
What if the Defendant does not respond to the claim?
When the defendant does not respond to the claim form within 14 days from the date of issue, or by the date specified on the claim form if it is later, you can apply to the court for default judgment.
This is a County Court Judgment (CCJ) against the defendant, in default of dealing with the claim and requires them to make payment to you. When making the application, you can specify whether you require such payment to be made immediately, by instalments or by a set deadline. Other than in exceptional circumstances, once a judge has made the order, the defendant is not able to challenge the value of the debt.
After judgment is received
Once approved by the judge, the court will send you and the defendant a copy of the judgment at the address included on the claim form. Once a judgment is received you can ask the court to enforce it. The value of the judgment will determine how you can enforce it and further information can be found on the government website.
Solicitors’ fees in the small claims court
When making a claim in the small claims court, there is no automatic right to recover any fees you have paid to legal representatives from your opponent, even if your claim is successful. The cost of legal representation will vary depending on the company you use but many will charge you an hourly rate for the time spent dealing with your claim.
The time spent will largely depend on the complexity of the matter, the approach of your opponent and how quickly the issue is resolved. Where your claim is for a low sum of money you may find that your legal fees exceed the money you recover.
At Jordans Solicitors we have a dedicated team of lawyers who can offer you advice on a range of areas including money claims, landlord and tenant disputes, neighbour and boundary disputes and wills and inheritance disputes. If you have a dispute against a company, organisation or individual please contact our dispute resolution team on 01924 387 110 or request a callback online.