Taking the matter to court
Claiming through the courts
There are different forms, timescales and documents to be used in each of the following courts. If the claim is for an amount up to £3,000, you can make use of the small claims court which has a less formal, faster approach by lodging an Application for Arbitration. All claims from £3,000 to £30,000 must be commenced in the county court by lodging a Civil Bill. If your claim is for more than £30,000, you can bring it in the high court by lodging a Writ. Proceedings should be issued where the contract arose or where the debtor resides or carries on business as stipulated by the rules of the court. Should your debtor reside or carry on business outside your jurisdiction it may be possible to issue in your local court; however we suggest that you seek legal advice as each case may vary.
To make a claim in small claims court, you will need to complete the claim form called a.
However, you might also consider using the. This service allows claimants (you, the creditor) to issue claims under £3,000 by requesting the issue of a claim form electronically via the Court Service website.
You can find more information on the court procedure page in this section.
Where your case is heard will depend on how much money is involved in the dispute.
Small claims court
For claims up to £3,000, you can represent yourself at your local small claims court. The court can rule on claims for specific amounts and issue warrants enforcing its rulings. However, it can't award damages or compensation.
A debtor served with a small claims application will have a number of options:
1. Dispute the claim. If the debtor submits a Notice of Dispute prior to the return date stated by the court then you will receive a copy of same outlining their reasons for dispute. The court will then revert to you with a hearing date. If you wish for any documents to be before the court at hearing you must lodge them with the court and send a copy to the respondent debtor 10 days in advance of the hearing. At hearing the judge will decide if the application is successful, and if so, what amount is to be awarded in judgment. If successful, you can then apply for a decree from the court and later enforce same via the EJO. As already advised you are not entitled to legal costs in the small claims court, so if you instructed a solicitor to attend for you, you will not recover their costs even if you are successful.
2. Admit the claim. If they accept the debt then they may propose terms of settlement. If these are accepted by you then the court will issue 'a decree with a stay of execution'. This means that if the debtor abides by the terms proposed then the decree can't be enforced, but if they default on settlement terms then the decree can be enforced without you having to apply again to the court. If you refuse to accept the debtor's proposal, then you can ask for the matter to be listed before a judge for the judge to determine what a reasonable payment term is.
3. Settle the claim direct with the you. If the debtor does this then you can notify the court that the case has settled, and the court will withdraw the matter.
4. Counterclaim. The debtor may lodge a Notice of Counterclaim to the court office prior to the 'return date' stated on the application if they allege that you have defaulted in the agreement in some material way that would affect their payments. The court will then revert to you with a hearing date. If you wish for any documents to be before the court at the hearing you must lodge them with the court and send a copy to the respondent debtor 10 days in advance of the hearing. At the hearing a district judge will decide if the claim and/or counterclaim are successful. The judge will make an order and if that order is against you then the debtor can apply for a decree from the court and later enforce same via the EJO.
Claims for any amount from £3,000 to £30,000 can be heard in the county court.
In the county court, unlike in the Small claims, it is unusual not to instruct legal representatives on your behalf. If you are successful in the county court, then you most likely will be awarded an order for costs against the defendant debtor as well as the amount you claimed. Costs in the county court can amount to several thousand pounds and are set out in legislation on a sliding scale depending on the value of the claim. If, however, the defendant is on a low income they may be entitled to legal aid to help defend the case (although legal aid would have to be satisfied that they have good merits to defend their case also). You are not normally able to recover any legal costs from a person that is legally aided. If the defendant is entitled to legal aid then they may not be a 'mark for judgment,' i.e. they may not have sufficient assets to pay any judgment made in your favour. If this is the case, you should consider if it is commercially sensible to proceed. You can investigate the debtor's circumstances to make an educated decision on if you think they can pay. To do this you may want to carry out debt searches or even land searches. This should give you a better idea of any debts and assets. The EJO have a debt register searchwhich will show judgment over the past 6 years against a person or company.
If, after serving your Civil Bill upon the defendant they do not respond by lodging a Notice of Intention to Defend then you may be able to seek a judgment against them without a full hearing. This of course will save you in both time and money.
If the debtor does defend then the court office will not list your case for hearing until a Certificate of Readiness is lodged by you. There is likely to be several months that elapse in between the lodging a Notice of Intention to Defend and a Certificate of Readiness. You may have to deal with requests for relevant documents (known as discovery) and have to answer or ask formal questions put in writing to you (known as Notice for Particulars) before the case would be listed before a judge.
If you are successful in obtaining an order it is necessary for you to then apply to the court to extract the decree. Once you have the decree this should be served upon the defendant. If they don't comply with the decree, then you can proceed through the EJO for enforcement.
Claims over £30,000 must be heard in the High Court. You must take legal advice and have a lawyer to represent you.
Methods of enforcing judgments
When a final judgment is made in a matter before the court, the successful party will usually apply to the Enforcement of Judgments Office (EJO) with a view to examining the debtor's means and attempting to secure the debt by attaching same to an asset. The replies of the debtor given at such an examination would enable the successful party to select the best method of enforcing the court order. Ideally you should try and find out this information in advance of any application to the Enforcement Office because it will accelerate the processing of the application and issue of relevant orders. The various methods of enforcement are:
Attachment of Earnings Order
If the debtor is currently in employment and cannot afford to pay the debt in full, the EJO can attach an Attachment of Earnings Order against their employer. This means that the debtor's employer will be obliged to deduct a sum, specified by the EJO, from the debtor's wages and forward to the EJO, for onward payment to the creditor.
If a debtor is self-employed, their income cannot be subject to an Attachment of Earnings Order. The EJO will instead request payment by way of an Instalment Order and will specify the date and amount of payment. Should the debtor default for no good reason, the main option, (unless any other Orders can be obtained) is to issue Committal Proceedings (i.e. seek to have the debtor imprisoned). However, this may require separate proceedings which can be expensive.
This Order directs the EJO to seize sufficient goods or assets from the debtor to secure payment for the debt. The following goods cannot be seized:
- Debtors' clothes and household furniture
- Any goods subject to hire purchase agreements
- Tools of the trade to the value of £100
- Any goods in the hands of a receiver which has been appointed by court
Order Charging Land
If a debtor owns property, whether jointly or otherwise, or has an interest in property, you can petition the EJO for an order charging land to be registered on the property owned by the debtor in an effort to secure payment. This will prevent the debtor from selling or re-mortgaging that property without paying off the debt specified in the judgment and secured by the order charging land. Only when the Order has been registered against the property and the property sold/remortgaged, will the creditor be paid from the net proceeds of the sale. An Order forcing sale can only be made if there are no other interests in the property (e.g. spouse). Note that the Order Charging Land only lasts for a period of 12 years from the date of the judgment. Should the debt not be discharged within this period, the charge becomes statute barred and a fresh Order will not issue.
Order Appointing Receiver
Should the debtor receive any money from a third party (e.g. from a personal injury claim or in a remortgage situation), the EJO can serve an Order Appointing Receiver on the third party, designating them as the receiver. Once this Order has been served on the receiver, the receiver is obliged to forward the money that they were going to pay to the debtor, less any deductions (e.g. legal fees and outlays and in the case of a re-mortgage, once the existing registered charges have been repaid), to the EJO, who will forward payment to whichever creditor has priority.