Litigation - Debt collection in the small claims court
Many businesses or individuals are owed money by customers who have failed to pay invoices on time. This can cause cash-flow problems for a business and can lead to bad debts affecting the financial health of the business.
Frequently asked questions
What is a small claim?
Any debt up to a limit of £5,000 is a Small Claim. Even one tenth of this limit (£500) is a substantial sum and worth pursuing even in some cases against an insolvent company or bankrupt individual to ensure a debt is considered by the administrator or trustee in bankruptcy
What about urgent cases or claims greater than £5,000?
In circumstances where there is a real risk of the debtor absconding abroad or disposing of valuable assets even claims for less than £5,000 can be issued in the High Court where the powers of recovery are much greater.
Who pays the court fees and lawyers costs?
Normally the Applicant pays the Court fee that varies from £30 for a small sum rising to £120 for a claim of £5,000. This fee is added to the debt and is recoverable from the debtor if judgment is obtained. Legal costs are not usually awarded in the Small Claims Court but costs involved in issuing proceedings may be claimed.
How can Sylvester Mackett help?
We offer an across the board fee of £40 plus VAT of £7 to assist in preparing the claim forms for any Small Claim once you have been refused payment.
You provide us with your details, the debt and the debtor's details and a cheque for £47.
We prepare the claim forms which you take to the court and pay the appropriate issue fee. In many cases the issue of the claim results in a swift payment from a debtor who wants to avoid being blacklisted for credit.
What if the Debtor tries to avoid payment?
We will reply to a defence and counterclaim or apply for judgment and enforce payment of the debt as appropriate at an hourly rate of £95 and claim interest from the date of judgment until paid.
Who attends the hearing?
In the few cases where the debt is disputed for what appear to be genuine reasons the case will under the court case management system come before a District Judge for a hearing.
Before the hearing the Judge asks both sides to produce and exchange any evidence and present any law that they intend to rely upon. We can assist in the preparation of the case and will attend at the hearing. However, it is almost certain that the costs of the hearing including the lawyers time will not be recoverable from the losing party and therefore you may chose to attend your self unless the sum owed is great or the law is or evidence is complex.
What if I receive a false claim?
Some unscrupulous businesses attempt to charge other businesses for services they did not order or fail to deliver the goods promised. In circumstances where you are falsely accused of owing monies we can prepare a defence and where appropriate a counterclaim. However the court rules are strict about the time for replying to the court so be sure to call us as soon as you receive any papers. A delay may mean that judgement is given against you, so delay at your peril.
This is a brief summary of the Small Claims Court procedure and not meant as a guide. If you require our services then please telephone 01225 755621 and ask for the Commercial Litigation Department.