Resolving business disputes efficiently is crucial for two things: maintaining smooth operations and protecting your financial interests.
The small claims court offers a cost-effective and straightforward method for resolving disputes involving small sums of money. In England and Wales, this is typically up to £10,000, £5,000 in Scotland, and £3,000 in Northern Ireland. Read on to find out more about the small claims court in the UK.
What is the small claims court?
The small claims court is designed to handle less complex cases where the value of the claim is relatively low.
Common types of claims include:
- Unpaid invoices
- Faulty goods
- Property damage
- Breaches of contract
To be eligible to make a small claim, you’ll need to:
- Be claiming for less than £10,000
- Be over 18
- Have an address in the UK
- Not be making a claim for personal injury or tenancy deposit
- Not be making a claim under the Consumer Credit Act 1974
You can reach out to the small claims court for many problems – including services that you’ve paid for. You can begin a claim up to six years after the incident in question (five years if you’re in Scotland).
The process is informal, and parties can represent themselves – usually without needing a solicitor.
Can businesses use the small claims court?
If your business is owed money in your opinion, then yes, your business can use the small claims court.
Is it worth taking someone to small claims court in the UK?
Before you head straight to the small claims court, it is essential to attempt to resolve the dispute through negotiation or mediation. Sending a formal “letter before action” to the other party, outlining your claim and what you expect them to do, is a crucial step. This letter should include your name and address, a summary of the dispute, the amount you are claiming, and a deadline for the other party to respond. The Citizens Advice has a template you can use for this process.
What is the small claims court process?
To start a claim, you must complete a specific court form. This is usually a Form N1 for most claims. You can obtain this form from the government’s official website. On the form you should provide clear details about the nature of your claim and what you are seeking.
Here are the required steps:
- Determine Eligibility:
Ensure your claim is suitable for the small claims court based on the monetary limit and complexity. - Gather Evidence:
Collect all necessary documents, contracts, invoices, photographs, and correspondence to support your claim. Examples of solid evidence might include letters, receipts, photos of damage, and estimates or invoices for repairs.
- Complete the Claim Form:
Fill out the claim form (N1 form) and submit it online via the Money Claim Online service or by post. - Pay the Court Fee:
Pay the court fee, which varies based on the claim amount. Reduced fees are available for online claims and for those on low incomes or receiving benefits.
The fee for a small claims court application ranges between £25 and £410, depending on the size of your claim. Here is the full list of court fees. If you win your case, the court may rule that you receive the fee back as part of the money owed to you, though this isn’t guaranteed. If you lose your case, your starting fee will not be refunded.
After a defence is filed, the court will send out a directions questionnaire to both parties. This document helps the court manage the case and set a timetable for the hearing. To prepare for your hearing, go ahead and organise your evidence, prepare witness statements, and be ready to present your case effectively. Ensure you comply with any court directions, such as submitting documents by a certain date. The hearing is usually informal and may take place in a judge’s room rather than a formal courtroom. Both parties will have the opportunity to present their arguments.
The Complete Small Claims Guide?
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If you feel your business would benefit from some impartial and expert legal advice, please get in touch with Steven Mather today.