Disputes over unpaid invoices, faulty services, or broken agreements are an unfortunate but common part of everyday life for individuals and small businesses. When attempts to resolve matters informally do not succeed, the small claims process can offer a relatively straightforward way to resolve disputes through the courts without the complexity often associated with litigation.
Understanding how the process works before taking action can help you make informed decisions and avoid unnecessary delay or expense.
What Counts as a Small Claim?
In England and Wales, a small claim is usually a civil dispute valued at up to £10,000, dealt with in the County Court under what is known as the small claims track. The system is designed to be accessible, and many parties represent themselves without formal legal representation.
There are, however, important exceptions. For personal injury claims, the overall claim must not exceed £10,000 and damages for the injury itself are generally limited to £1,000 for the case to remain within the small claims track. For housing disrepair claims, both the repair costs and any associated damages must usually be £1,000 or less. Certain claims, including those involving harassment or unlawful eviction from residential property, are excluded from the small claims track regardless of value.
Typical small claims include disputes involving unpaid debts, breach of contract, or problems with goods or services supplied.
Trying to Resolve the Dispute First
Court proceedings should usually be a last resort. Before issuing a claim, parties are expected to attempt settlement, often by sending a Letter Before Action outlining the dispute, the amount claimed, and a deadline for response.
Courts encourage parties to consider alternative dispute resolution, including mediation. In many cases, defended small claims may be referred to the Small Claims Mediation Service if both parties agree, which can lead to quicker and less costly outcomes.
Starting a Claim
If settlement cannot be reached, a claim may be issued online using Money Claim Online or by submitting a claim form to the court.
The claimant must explain who the parties are, what has happened, and the amount being claimed. A court fee is payable when issuing proceedings, and the fee varies depending on the claim value.
What Happens After a Claim Is Issued?
Once served, the defendant normally has 14 days to respond. They may admit the claim, dispute it, or request additional time to file a defence. If no response is received, the claimant may apply for judgment in default, allowing the court to determine the case without a hearing.
Where a claim is defended, the court will allocate it to the small claims track and provide directions for exchanging evidence and preparing for a hearing.
The Hearing Process
Small claims hearings are generally informal and are usually conducted by a District Judge. Strict rules of evidence do not apply, and the process is intended to be understandable for non-lawyers.
Both parties will present documents and evidence such as contracts, invoices, emails, or photographs. The judge will hear each side’s position and provide reasons for the decision.
Costs and Enforcement
One of the defining features of the small claims track is that legal costs are generally not recoverable, even if you are successful. This helps keep the process proportionate, although court fees and certain limited expenses may still be awarded.
If the losing party does not pay voluntarily after judgment, enforcement options may include instructing enforcement agents, applying for an attachment of earnings order, or obtaining a charging order over property.
When Might Legal Advice Help?
Although the small claims system is designed to be accessible, early legal advice can still be valuable. Understanding the strengths of your position, preparing evidence effectively, or considering enforcement options can often improve the chances of a successful outcome, and in some cases help resolve disputes before court proceedings become necessary.
Tej Chowdhary, Solicitor at Ranjay Solicitors
(This article is provided for general information only and does not constitute legal advice. For advice tailored to your circumstances, please contact Ranjay Solicitors.)