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Recovering a Debt through the Small Claims Court – What you Need to Know

If you’re a small to medium business owner and find that you are owed money by a client or customer who is continually avoiding payment there are ways in which you can recover the monies owed to you.  The most common method is via the County Courts Claim procedure and many business owners turn to this method in order to extract payment from non-paying customers or clients.  However, there are issues that must be considered before resorting to the County Court.  There are at present 13 protocols that can be followed to ensure that your conduct in the matter has been compliant with the Civil Procedure Pre-Action Conduct and Protocols and these cover, amongst others, Construction and Engineering Disputes and Professional Negligence.  However, if there is no relevant protocol, you must ensure that you follow Pre-Action Conduct as set out in the Civil Procedure Rules Practice Direction Pre-Action Conduct and Protocols (the Practice Direction).

If you do decide to go to court to sort out your problem, you’ll be expected to adhere to the rules that cover court action.  If you (or the other party) don’t follow these rules, the court will take this into consideration when making a decision.  If you have not cooperated, then the case may not be heard or the amount you are awarded could be reduced as a result of this. 

The Civil Procedure Rules are designed to ensure that everybody is treated fairly so you need to make sure that:

  • You and the defendant are on an equal footing
  • You and the defendant have tried using other methods to solve the problem.  This is known as alternative dispute resolution (ADR) and may include arbitration, the Ombudsman or trade associations.
  • You and the defendant have attempted to settle before going to court.
  • You try to save costs where possible.
  • The way the case is dealt with reflects how much money is involved, how complicated the problem is and the financial position of both parties.
  • The court hearing is straightforward, shorter and the outcome is more certain.
  • The judge’s time is not wasted.

In the run up to the court hearing you and the other party must make sure that time and money are not wasted.  This is called Practice Direction on pre-action conduct and it requires that you and the other party must:

  • Let each other see any relevant documents.
  • Share the cost of expert advice where possible.
  • Write a letter before action which the other party must acknowledge.

If at all possible, you should try to settle the matter without resorting to court action.  There are qualified people who can look at your problem and advise you and the other party on a way of settling without going to court – this is known as alternative dispute resolution (ADR).

If you’ve already tried alternative dispute resolution and it hasn’t worked, then you need to write a letter before action before taking somebody to court – this is a requirement under the pre-action conduct.

If the court finds in your favour, that’s still no guarantee that the monies owed to you will be repaid.  This could be the time to turn to the professionals and use a no-win, no-fee debt collection solution in order to pursue your claim and resolve the matter entirely.