The Petty Debts Court has jurisdiction to deal with all civil causes and matters where the claim doesn’t exceed £10,000. It also deals with Family and Tenancy matters. The Royal Court deals with claims above that amount.
Before issuing proceedings a Plaintiff should write to the Defendant setting out the basis of his claim and demanding payment. The letter should clearly state that if payment is not made within 7 days, legal proceedings might be instituted to recover the monies owed.
If no payment is received and the Plaintiff decides to take the case to court, then he must issue a Summons. A Summons is a formal document, which must contain certain information. The Summons must state the sum of money owed and the brief reason for the debt, together with details of any interest or stamp duty and any costs or wages arrest sought. It must also state the date and time of the court appearance.
Two copies of the Summons together with a claim summary from must be delivered to the Magistrate’s Court Greffier before 3pm on a Friday. The Greffier then sends a copy of the Summons to the Defendant and adds the action to the court list for the Wednesday nominated on the Summons. In practice this is normally the second Wednesday following the posting of the Summons.
Once issued with a Summons, a Defendant may try to settle the case. If that happens before 3pm on the Monday before court (with the exception of bank holidays), the case can be withdrawn. If a Defendant is only able to pay by cheque, which would need time to clear, or if a Defendant is only able to settle part of the debt, it is possible for the Plaintiff to agree to adjourn the case until it is completely settled.
It is advisable to try to settle a case if possible because if judgement is taken against a person, it may well negatively affect their creditworthiness in the future.
The Plaintiff must go to court to present his case, either with a lawyer or in person. If the Defendant does not appear in court then it is more than likely that judgment will be taken against him.
If a claim is contested by a Defendant, the Court will establish the nature of the case and also that the Defendant has an arguable and legitimate defence.
Once the Court has satisfied itself in that regard, it may well
Mediation is a procedure whereby a trained mediator will facilitate discussion between the parties so as to achieve a settlement, which, once signed, is binding on both parties.
The mediator must not act as a judge or as an arbitrator. It is less formal that appearing in court and one of the benefits is that the parties can talk to the mediator in a way, which they wouldn’t be able to do in court. Mediation is more like having a conversation whereas if you are a witness in litigation proceedings, your role is to answer questions put to you by the opposition. With the latter option you would not necessarily have the opportunity to get things off your chest in the same way as you would with mediation.
The costs of mediation are not recoverable in the same way as with litigation. The standard practice is for the parties to split the cost of the mediator equally.
Mediation succeeds more often than it fails, but if the mediation should fail, then the case would be referred back to Court for it to continue to a hearing.
In a contested case, the Plaintiff has to file a Statement of Claim, which is a formal document in which the relevant facts should be set out logically and chronologically. It is vital to include each and every fact that will be relied on. If something is not written down, or pleaded, it could seriously prejudice your case.
The Defendant must then file an Answer, which should deal with each and every issue raised by the Plaintiff. It should be clear from the Answer whether the Defendant denies an allegation or accepts it. The Defendant must include a brief outline of their defence. Occasionally the Answer might reveal a Counterclaim against the Plaintiff in which case the Plaintiff must file an Answer addressing that.
The Court will set time limits for each of these pleadings and if either party is late, then the other party can apply to have the case struck out, or for judgment in default depending on which side you are on.
The Plaintiff will need to present their case and call witnesses to prove the points set out in their Statement of Claim. The Plaintiff and the Defendant may well need to give evidence as part of their case and if they do so, their opponent may cross-examine them. In addition to this, any witness may well be asked questions, by the judge.
At the end of the process, the judge will retire to consider his verdict. He will either find for the Plaintiff or the Defendant and make a costs order accordingly.
Pursuing a claim in court can be an expensive process. It is therefore advisable to try to settle a claim where possible. If you take a case to court and lose, then it is very likely that you will have the pay the Defendant’s costs, as well as your own. If you take a case to court and win, the Defendant will have to pay some of your costs but even if you win, you may still have to cover some costs yourself.
Costs are usually awarded on a taxed basis and what that means in practice is that the victor receives an average of about 70-75% of their costs, paid by the losing party, assuming that the losing party has the money to pay anything at all. If the Defendant is unable to pay the costs, then it is possible to have them declared bankrupt and for the costs claim to rank along with their other debts.
If the victor has a lawyer involved and the victor receives 70% of their costs from the Defendant, they still have to find the remaining 30% to pay their lawyer.
Putting all that into the context of a maximum £10,000 claim and considering how quickly costs can mount up, there is a great deal to be said for trying a settle a claim and that is why the court actively encourages it.
Parslows litigation team advise on all areas of litigation.
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