As the downturn has continued to affect businesses’ ability to pay their bills, an increasing number of firms are looking to the courts as a way of settling outstanding debts.
It is common to hear reference to the ‘small claims court’. This is often cited as a means by which two parties can get a legal dispute settled quickly, particularly if it involves a relatively small sum of money.
But what is the small claims court, and how can you use the legal system to get back what you are owed?
What is the ‘small claims court’?
The first, and perhaps most important thing to note, is that there is actually no such thing as the small claims court. This is a phrase that has entered common usage without there really being any basis for it. There is no separate court for small claims. There is, however, a small claims ‘track’ of the county court; that is, a series of special provisions within county courts for the settlement of claims below a certain value.
Generally speaking, claims will be sent to the small claims track if they have a value of £5,000 or less. There are exceptions, however; if the case involves a tenant claiming against their landlord for repairs to a property, the case will only be assigned to the small claims track if its value is les than £1,000. Conversely, in cases where the value of the claim exceeds £5,000, it is sometimes possible for the dispute to be dealt with in the small claims track provided both parties agree.
In addition to outstanding debts, the small claims track of the county court can be used to settle disputes regarding things like poor workmanship, failure to supply goods, faulty goods or services, and property damage.
Can I use it to get back money I am owed?
Possibly. In order to be able to make a claim in the small claims track of the county court, you need to be able to fulfil certain criteria.
To begin with, the value of the claim must be within the limits explained above. You should note that particularly complex cases may still be transferred to other tracks even if their value is within the limit.
There are also strict time limits imposed on claims. The period within which you can bring a claim will depend on the nature of the dispute. Some disputes have a time limit of six years, for example, while others may be shorter. You should seek legal advice if you are unsure about this.
It is also vital to understand that court action should only be taken as a last resort. You must be able to show that you have tried all other reasonable methods of settling the dispute (for example ADR or mediation), otherwise you risk having your case thrown out.
How do I make a claim?
It is now possible to make some types of claim online, using the government’s Money Claim Online (MCOL) service. This also offers respondents the opportunity to respond to complaints electronically.
You can access the MCOL service by clicking here.
As with all legal procedures, it is important that you understand the process and the potential implications before you begin. If you are in any doubt, you should seek legal advice before taking any action.