Small Claims Court: Is It Worth the Hassle? A Realistic Look
When repeated reminders have failed to secure payment, taking a customer to court can seem like the obvious next step. If they owe the money and refuse to pay, why not make a claim and let the court decide?
For straightforward claims of up to £10,000, the small claims track provides a route for businesses to pursue money they are owed through the court system. However, before starting proceedings, it is worth considering whether court action makes commercial sense.
What Does Making a Small Claim Involve?
A money claim can usually be started online, although there are circumstances where a paper application is required. You will need details of the person or business you are claiming against, together with the information required to support your claim.
There is also a court fee to pay, which varies according to the amount being claimed. Further fees may become payable if the case progresses to a hearing or enforcement becomes necessary.
If the defendant disputes a claim of £10,000 or less, both parties will usually be required to attend free court-organised mediation before proceeding to a hearing.
Winning Doesn't Automatically Mean Getting Paid
This is an important distinction. Receiving a judgment in your favour confirms that the debtor must pay, but it does not guarantee that the money will arrive.
If payment is still not made, further enforcement action may be required. Depending on the circumstances, this could include asking the court to send enforcement agents or taking other steps to recover the judgment debt.
Before issuing a claim, it therefore makes sense to consider the debtor’s financial position and whether there is a realistic prospect of recovering the money.
Consider the True Cost of Going to Court
Court fees are only part of the equation. There is also the time involved in preparing your case, gathering evidence, responding to correspondence and potentially attending mediation and a hearing.
Costs on the small claims track are generally limited, so you should not assume that everything you spend pursuing the case will be recoverable from the other party.
For a business owner, the question is not simply, “Can I win?” It is also, “Is pursuing this debt through court the best use of my time and resources?”
Could the Debt Be Recovered Without Proceedings?
Court action is not always necessary. Professional debt recovery can sometimes secure payment without the need to issue a claim, particularly where the debtor has stopped responding to internal reminders but has the means to pay.
Seeking professional support before issuing proceedings also provides an opportunity to assess the circumstances surrounding the debt and determine the most appropriate way forward.
Making a Commercial Decision
There are situations where court proceedings are entirely appropriate, but they should be one option within the recovery process rather than an automatic next step.
Jackson CRS will always look at the circumstances surrounding an outstanding debt and the options available for recovering it. In many cases, communication, negotiation or mediation can secure payment without the need for court proceedings.
Where a claim does need to proceed through the Small Claims Court, we can assist you. We can help with the administrative and procedural aspects of the process whilst following your instructions throughout. If a judgement is obtained but payment is still not forthcoming, we can also advise on the enforcement options available to help recover the outstanding debt.
To discuss an unpaid debt with our debt collection agency, call the office today on 01603 319 034