This article was last updated 0 months ago and may not represent current law.
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 £5,000 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
- 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
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 either make it online or complete a paper claim form, which is 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: Make the claim online, or fill out the paper claim form (N1 form) and send it by post.
- Pay the Court Fee: Pay the court fee, which varies based on the claim amount. Help with fees is available for those on low incomes or receiving benefits.
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. If the claim is only for a fixed sum of money and was issued on or after 22 May 2024, both sides are then referred automatically to the Small Claims Mediation Service, which is a free telephone appointment of up to an hour. This is being run as a pilot scheme until 6 April 2027 and you are required to take part, so a judge can penalise a party who doesn’t attend. If mediation doesn’t settle it, the claim carries on to a 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?
Looking for more information. Have a look at my book. It’s available to buy on Amazon, although it was written a few years ago, so check the court fees and procedure in it against the current position:I don’t run disputes or court claims myself. If you would like a solicitor to deal with a claim for your business, get in touch and I will refer you to one of my Nexa colleagues, who will quote their own fee. There is more about how that works on my disputes page.
Written by Steven Mather, a business solicitor acting on company sales and purchases. This is general information about the law, not legal advice on your situation. Law correct as at .
