Disagreements and conflict are a common occurrence and can cause great stress and worry for those concerned, particularly when money is involved or your reputation is at stake.
If someone owes your business money, has breached an agreement or has provided you with faulty goods or a poor standard of workmanship, your best means of redress may be to take them to court under a small claim.
What is a small claim?
If your claim is of a simple nature and has a financial value of £10,000 or less it will be classed as a “small claim” and allocated to the small claims track.
What is the small claims track?
When legal proceedings are issued, claims are allocated to one of three “tracks”, the small claims track, the fast track and the multi-track.
The small claims track is designed to be a simplified and proportionate method for dealing with lower value money claims, the ones which commonly arise.
The small claims process is intended to be relatively quick, straightforward and easily accessible to those who have no prior knowledge or experience of court processes.
In fact, many small claims are issued or defended by “litigants in person”, parties who are not legally represented by a solicitor. Acting as a litigant in person has obvious financial advantages as you will not have to fork out for solicitor’s fees which can be a expensive in litigation.
Having said this, the decision to represent yourself should not be taken lightly as even seemingly straightforward small claims can unearth complex legal questions and involve tactical negotiations between the parties which require the knowledge and skill only a solicitor can provide.
How do I start a small claim?
Before starting a small claim you must first assess your opponent’s ability to pay up. There is little point in suing someone who is penniless.
The Claim Form
Having established this, the first step to issuing a small claim is to fill out a Claim Form which must be sent to the court, any County Court hearing centre or the County Court Money Claims Centre, along with a fee. This fee can range from £35 to £455 depending on the value of your claim.
The Claim Form requires you to briefly state what your claim is about and how much money you are seeking to recover. It is normally accompanied by Particulars of Claim which allow you the opportunity to explain the facts of your claim and how it has arisen in more detail.
Once issued, the court will then send a copy of your Claim Form to your opponent, the Defendant. The Defendant now has 14 days to formally acknowledge your claim by way of an Acknowledgement of Service.
A defended claim
If the small claim is defended, the Defendant must file a defence responding to your allegations either:
- within 14 days of receiving your Claim Form; or
- within 28 days after receipt of the Claim Form if an Acknowledgement of Service was served.
If the Defendant does not serve a Defence or fails to respond to the Claim Form altogether, you may obtain a Judgement in Default without having to go to court at all.
To have your claim formally allocated to the small claims track, the parties are required to fill out a Directions Questionnaire which asks you for more information about the claim.
Following this, you should receive a ‘Notice of Allocation to the Small Claims Track’ which will notify you of dates for submitting your evidence and witness statements and the date and location of the final small claims hearing. There will also be a hearing fee to pay 14 days prior to the hearing.
Although the small claims track procedure is intended to be more informal and relaxed, there are still rules and deadlines imposed by the court which parties must take seriously and comply with.
The final hearing
Small claims hearings are often short, lasting no longer than a day. It will usually take place in a judge’s chambers and will be a relatively relaxed and informal occasion.
Most cases do usually settle before they reach the hearing stage and so you may never actually get your day in court.
How much will it cost?
A key question to consider before taking any legal action is, can I actually afford it? Generally, costs incurred in pursuing a small claim are not recoverable.
The costs involved in court proceedings are:
- Court fees.
- Reasonable travel costs and loss of earnings.
- Expert fees.
- Solicitor’s fees – on the small claims track each party usually bears their own legal costs. However, if you lose your claim, you may have to pay the Defendant’s legal costs.
Litigation can be an expensive exploit and before taking action you must weigh up whether the value of your claim justifies the potentially high cost of pursuing it.
Is it worth it?
Any form of litigation, whether it be for a claim worth £100 or one worth £100,000 can be a stressful, expensive and time consuming process for all involved. Particularly in the case of small claims, the risks can be high in the pursuit of a relatively menial reward.
The small claims track is designed to be a fast and inexpensive process and, in some instances, could be the most effective way of resolving a nagging dispute. However, the realities of the legal process are often much different and, even if you have been genuinely wronged, the repercussions of taking legal action may land you, or your business, in a worse position than you had been at the outset.
For resolving disputes, legal proceedings are not always the quick fix they may appear to be and so before launching into litigation, always consider the quicker and cheaper alternatives. You can find out more information about mediation and alternative dispute resolution here.
For more information on small claims, contact the Dispute Resolution team here.