What is the process for small claims court?
If a claim has been made against you, you will receive court papers in the post. Do not ignore these – they will tell you exactly what to do and when.
The first thing you must do is to ‘acknowledge’ the claim. You can only do this if you are the named defendant in the proceedings. If you are not then you should call the court and the claimant to make sure you do not end up with bailiffs coming to your house by accident! The court papers will set out details (in the bottom right) of how to do this online.
When you acknowledge service of this claim, you will be asked whether you admit the claim or plan to defend the claim.
Admitting the Claim
If you admit the claim then you will need to make arrangements with the claimant to pay. You will not have to pay the claim in full if you cannot afford to, but the judgement will appear on your credit report if you cannot pay in full within 28 days.
If you would like time to pay, this can be agreed informally with the claimant or formally through the court. It is a good idea to do this formally through the court. You will need to submit details of your household income and expenditure, along with the proposed repayment terms. You should do this through an N245 form which is available on the government website here.
Defending the Claim
If you do not think that you owe the claimant this amount, you should indicate that you plan to defend the claim. You will then need to submit a defence, setting out the reason that you do not owe the money. The claim form will have set out the claimant’s reasons for making the claim – also known as the ‘particulars of claim’. One way of writing a defence is addressing each of these points and saying why you disagree with them.
With everything that you submit in the small claims court, you should write very simply and clearly. Using overly flowery writing or writing about issues which are not relevant to the case will only make the judge’s life difficult, and may make your points hard to follow.
What is a counterclaim in small claims court?
When you are responding to a claim which has been made against you, you may choose to make a counterclaim against the claimant. This is a claim that you have against the claimant which would rebut (or at least reduce their claim), or mean that they owe you money for this separate claim.
You should be very careful when making a counter claim as part of your defence of the claim.
As the defendant in the case, it is not your duty to prove any of the aspects of the case (although you should be able to prove anything that you say if challenged). It is the claimant’s job to prove that you owe them money, not your job to prove that you don’t owe them money.
If you make a counterclaim, you become responsible for proving this claim. If that is your only defence to the claim and you fail to prove it, then the claimant is likely to be awarded judgement.
The counterclaim should be specific and measurable. It may be directly related to the claimant’s claim. For example, where the claim is that you have not paid them money due under a service agreement and you claim that the services were not supplied to the agreed standard. Or it may be incidental. For example, where they claim you did not pay for supplying and installing an item, you may make a counterclaim for damage to your property which was caused by the installation.
What happens if you lose in small claims court?
If you lose in the small claims court, a judgement will be granted against you and you will have to pay the claimant. That judgement is likely to be for the full claim value including an interest charge and the court fees paid in the case.
It is possible that the claimant will be granted judgment for a smaller amount than the claim value. This will happen where you have made a successful counterclaim, you were able to defend part of the claim, or where the claimant has only been able to prove part of their claim.
The good news is that you cannot be asked to pay the claimant’s legal fees in the small claims court as long as you have behaved reasonably throughout the process, but that applies both ways.
Once the claimant has been granted judgement, the defendant will become known as the judgement debtor. You will receive the judgement from the court in the post typically within a few days of the hearing. You should then contact the claimant without delay to arrange payment of the judgement – you will not have to pay more than you can afford.
If the judgment has been granted to a financial institution, this will appear on your credit rating unless you have paid in full within four weeks of the judgement date.
The claimant can take further enforcement action against you, including petitioning for your bankruptcy or sending bailiffs to your property if you do not contact them to arrange payment. Even if you cannot afford to pay, you should still speak to the claimant as soon as possible to avoid any further and unnecessary action.
Even with judgement, the claimant company is still likely to be willing to come to an arrangement to pay by instalments which suit you. And they are still required to take your circumstances into account. You can find out more about how to negotiate with debt collectors here.
Can a small claims court decision be appealed?
Small claims court decisions can, in some instances, be appealed, but this is not common.
You should think very carefully before appealing a decision of the small claims court. This is likely to be an expensive and time-consuming process.
You cannot appeal a small claims court decision just because you think that the judge was wrong or because you do not like the outcome. In order to appeal you will need to have new and compelling legal grounds. In most cases, you will need permission from a judge to appeal. This may not be granted if you do not have valid ground to appeal.
Once the court has granted permission to appeal, you will need to file a notice and pay a fee of £120. This notice should set out the basis on which your appeal is being made.
We would strongly advise you to take legal advice before appealing a small claims court decision. Unlike in the original hearing, if you lose on appeal you will most likely have to pay the other side’s legal fees, which can easily total thousands of pounds.
If you want more information about the appeals process in the small claims court, HMCTS has a very useful guide which you can access online here.
The small claims court process is designed to be simple and accessible. There is a lot of help out there if you are defending a claim in the small claims court, and we would strongly recommend taking expert legal advice as soon as possible.