What counts as a small claim?
People often talk about the ‘small claims court’ as though it’s a place you could bump into on the way to the shops. But there’s no such thing as ‘the small claims court’. Instead, the term refers to the procedure that small claims go through.
So, what is a small claim?
A small claim is a damages case for up to £10,000. It will also usually be a simple case to resolve, typically taking less than a day to go through.
What are the benefits of the small claims court?
Making a claim through the small claims court has many advantages.
First and foremost, you don’t need a lawyer. This matters when you’re making a small claim, as legal fees may outweigh any damages you’re awarded.
Most lawyers won’t take your case on if you’re claiming up to £10,000, because any damages you win are unlikely to cover their fees. Equally, there’s little point in pursuing legal action if you’re going to end up out of pocket.
The small claims court is a way of claiming the money you’re owed without needing legal help. You can usually apply online yourself, and you keep everything you win.
Another benefit of making a small claim is that many cases go undefended, which means you could win without having to do very much at all.
What can I make a claim for?
You can make a small claim for most breach of contract issues, such as the non-return of a tenancy deposit or the sale of faulty goods. However, remember that winning your case is never guaranteed.
The process is the same whether you’re suing an individual or a company.
How much can I claim in a dispute over money?
Since large sums of money tend to complicate cases, there’s an upper limit to the amount you can claim in the so-called ‘small claims court’.
- £10,000 in England and Wales
- £5,000 in Scotland
- £3,000 in Northern Ireland
If your claim is above the threshold, you may not be able to make a small claim and might have to attend a formal hearing instead. Alternatively, you could lower your demand to meet the limit.
Remember, you can only make a claim if the problem happened in the last six years.
When should I make a claim?
You don’t want to start by launching legal action. Taking a case to court should be a last resort, especially over small financial disputes.
In fact, the court will want to see evidence that you tried to settle the dispute before taking the matter further, giving the other party enough time and opportunity to resolve the issue. Failing to do so could seriously harm your case.
In the first instance, write a letter or email outlining your dispute. Be sure to mention that you’re considering taking the person or business to court. Keep a copy of the letter and retain proof of postage if you send it by mail.
Make sure to include:
- Your name and address
- An outline of the situation
- Your expectations for resolution, such as repayment or replacement
- How much you believe you’re owed
- How you calculated that amount
- A deadline for resolution, usually 14 days, though this may vary depending on the dispute
If the other party fails to address the problem or disagrees with your version of events, then it may be time to act.
How do I make a claim over a financial dispute?
For residents in England and Wales, the quickest and easiest way to make a claim is by using the government’s online Make a money claim form. This should only be used when you’re asking for a specific amount. If you don’t know the exact amount owed, you must download, print and complete the N1 form.
Since making a claim means paying a fee, you won’t be able to use this service if you’re a low-income applicant who may not have to pay court fees.
You also can’t make an online claim if it’s against more than one person or organisation. If the dispute involves two people or companies, use HM Courts & Tribunal Service’s Money Claim Online, which is for claims between £10,001 and £100,000. For financial disputes against three or more parties, you’ll need to complete the paper N1 form.
Should I try mediation during a money dispute?
Once you begin your small claim, you may be offered mediation. It’s optional, although it could help you resolve the dispute in an agreeable way. This is offered by the Civil Mediation Council, an independent and neutral organisation that provides information, though not advice, about the law and the options available to both parties.
According to the organisation, during mediation, offers can be made without influencing what happens if the dispute is eventually resolved in court. This is known as making offers ‘without prejudice’, and it can help participants try to reach a settlement without compromising their position.
If an agreement is reached, a binding document is drawn up and signed. If the claim is already in court, a consent order is then sent to show agreement from both parties.
How much does a money claim cost?
The first thing to say about the costs involved in a small claim is that it won’t cost you anything if you win your case. But you must pay an upfront fee to get your claim processed.
How much you’ll pay to make a claim for disputes over money depends on two factors: how much the claim is for and how you’re making the claim. The only exception is if you don’t fill in the ‘amount claimed’ section of the form. In that case, the fee is £10,000, so it’s not something you’ll want to leave out.
Think carefully about how much money you claim for. If you lose your case, you won’t get the fee back.
Money dispute claim fees:
- Up to £300: Paper form £35, online form £25
- £300.01 – £500: Paper form £50, online form £35
- £500.01 – £1,000: Paper form £70, online form £60
- £1,000.01 – £1,500: Paper form £80, online form £70
- £1,500.01 – £3,000: Paper form £115, online form £105
- £3,000.01 – £5,000: Paper form £205, online form £185
- £5,000.01 – £10,000: Paper form £455, online form £410
Additional fees may be payable if the claim requires a court hearing or further action is needed to resolve the financial dispute.
What happens after I’ve made a claim?
After you submit a claim against a person or organisation, they’ll have 14 days to respond. They might also send an acknowledgement of service, which gives them a further 14 days to dispute the claim.
They could pay up without question by updating your online claims form or emailing Money Claims with the payment details. When using a paper form, you’ll need to inform the court directly.
If you don’t receive a reply, you can then request a ‘judgment by default’. For claims of a specified amount, use form N225; for unspecified amounts, use form N227. If the court agrees, it’s possible to win without further action.
The person or business might also make an offer, telling the court they’re willing to pay some or even all of the money. You’ll be notified about this, with details on how to accept the offer.
On the other hand, they may dispute your claim. At this point, you’ll probably have to attend a hearing at county court. To prepare for the case, the court will send you a Directions Questionnaire.
Essentially, it lets you say, ‘Yes, I agree to a hearing to resolve this financial dispute’. Regardless of whether you agree, you’ll still need to fill in the form. Any evidence you have should be submitted 14 days before the hearing date.
If the judge awards you the claim, they’ll usually give the defendant a month to pay the amount. However, you can disagree with the ruling, usually the amount awarded, and request an appeal. But it’s worth remembering that even on appeal, you may not recover everything you believe you’re owed.
Do I need a solicitor to begin making a claim?
The small claims court process is designed to allow you to make simple claims by yourself, so you probably don’t need a solicitor.
Furthermore, it’s likely that any damages you’re awarded won’t cover a solicitor’s legal fees, so it often won’t be worth it.
However, if you do decide that you want some legal advice, try to find low-cost legal help. Just make sure that any legal fees you pay will be less than the compensation you could win.
You can use our quick quote form to compare costs for solicitors near you.
