Debt Recovery

4. Small Claims Track

If you pursue a debt for up to £5,000 using the courts, your case will be allocated to the Small Claims Track, part of the County Court. The procedure has opened up rapid and simple methods for individuals and small firms.

4.1 Making a claim using the small claims track is inexpensive. Your local court can send you forms to fill in and leaflets detailing each stage and the fees involved.

• A solicitor is not usually required.
• The court fees can be added to the amount of your claim. So, too, can interest on the debt from the time it became due. Both should be included at the outset.However, you can only claim very limited solicitors' fees.
• Present written evidence that you have tried to resolve the dispute before resorting to proceedings or you may be penalised even if you have a valid claim.

4.2 Once the court serves the claim form, your customer (the defendant) can respond in one of four ways:

• Pay the claim.
• Admit the claim, or part of the claim.
• Ignore the claim by not responding within 14 days. In this case, a default judgment can be enforced.
• File a defence to your claim. A defence can include a counterclaim (saying that you owe the defendant money).This usually leads to a hearing (see 4.4).

4.3 If the defendant suggests a compromise, you can accept the offer or progress to a small claims hearing (see 4.4).

• Agreeing to accept payment in instalments is often advisable.

4.4 A small claims hearing is an informal meeting between yourself, the defendant and a district judge.

• This takes place on a fixed date at court.
• The judge listens to you, to the defendant and to any witnesses, and reviews the evidence which each of you puts forward (eg invoices, letters, expert opinions).
• The judge then tells you his decision and explains his reasoning.
• Provided you submit written evidence and give at least seven days' notice, you do not have to attend the final hearing in person.

4.5 If the defendant has agreed in writing to pay the claim, or you have been awarded judgment at the hearing, you can then request the court to enter judgment.

• This records your legal right to the debt, but does not guarantee payment (see 6).