Critical facts:
- You will be progressing with a civil case, not a criminal one. If you win, your trader will not be going to prison.
- If you want them to have jail time, you need the police or Trading Standards to demonstrate it is in the public’s interest to pursue a criminal case.
- You will have to fund your case yourself. This can be VERY expensive. CAST strongly recommends consulting a lawyer before starting this process.
- The trader can decide not to turn up, go bankrupt or close their business in order to avoid court. They can also own nothing on paper,
- You may with the case and your trader has a new CCJ (County Court Judgement) detailing how much they owe you. Our survey shows those that won a case needed to engage bailiffs (at a cost) to recover monies owed. Carry out a CCJ check to see how many unpaid CCJs they may already have, there is a chance yours will be added to this list.
If you and your lawyer agree there is a strong case with a good chance of recovery, this is the process:
- Court Routes Available
- Which Court Route is Right for You
- Making the Claim
- After Submitting the Claim
- Going to Court
- The Judgement
- Getting Payment
Court Routes Available
There are several routes available within the civil court system and it will depend on the amount of money that you are owed.
- Up to £10,000 (known as small claims)
- Between £10,000 – £25,000 (known as fast track claims)
- Claims over £25,000 (known as the multitrack system)
Before you take your trader to court, you need to ensure that you have followed all the steps in ‘If it Has Gone Wrong’, this ensures that you are complying with your legal responsibilities.
Remember:
- Write to them outlining your problem and what you want them to do about it.
- Give them time to respond to you. 14 days is reasonable.
- You will need to warn the trader in writing that you will take court action if a resolution cannot be found.
- You have to give your trader chance to come back and fix what is not right or complete the work
- Make sure you check that the trader has the money to pay up if they do lose. If not, taking your claim to the court will be a waste of time and money.
- You will need to demonstrate that you have tried mediation with the trader. Even if they refuse to engage.
- It is not guaranteed that even if you win, you will get your money. Some traders will do all they can to avoid paying you, even if you win.
- You have the right to make a claim up to six years after you paid the trader in England, Wales and Northern Ireland, and five years in Scotland.
Please check the section on ‘deciding to pursue a claim’ before completing any court paperwork
Deciding which court you need.
The small claims court is designed for the lay person to use without the need for legal assistance.
If you need to pursue your trader through the fast track or multi track system it is likely that you will a solicitor. While there is nothing stopping you being a litigant in person (representing yourself) you will need to demonstrate a good understanding of the legislation that your trader has broken through argument against their lawyer.
You can choose to use the small claims court to recover part of the money owed to you from your trader, even if the total value is over £10k, as long as what you are claiming is not more than £10k.
You cannot put through multiple claims through the small court to equal the total owed.
Costs for small claims court
| Claim amount | Fees |
|---|---|
| Up to £300 | £35 |
| £300.01 to £500 | £50 |
| £500.01 to £1,000 | £70 |
| £1,000.01 to £1,500 | £80 |
| £1,500.01 to £3,000 | £115 |
| £3,000.01 to £5,000 | £205 |
| £5,000.01 to £10,000 | £455 |
| Over £10,000 | 5% of the total claim value |
You can also claim interest on the money that you are owed:
Claim the interest
- The interest will be calculated for you if you claim for an unspecified amount.
- You need to work out the interest yourself if you’re claiming for a fixed (‘specified’) amount of money.
Work out the interest
- The rate is usually 8%.
- To calculate this, use the steps below.
- Work out the yearly interest: take the amount you’re claiming and multiply it by 0.08 (which is 8%).
- Work out the daily interest: divide your yearly interest from step 1 by 365 (the number of days in a year).
- Work out the total amount of interest: multiply the daily interest from step 2 by the number of days the debt has been overdue.
Source: https://www.gov.uk/make-court-claim-for-money/work-out-interest
- You can also claim up to £750 for reports that you have had done, such as a Chartered Surveyors report.
Making a claim
- You have 2 options when making a small claim. CAST strongly recommends that if you consult a solicitor for claims over £10,000.
- Complete a money claim online, this is digital service that is designed specifically for small claims (claims of less than £10,000). You cannot use it if your claim is about anything other than money.
Follow the link below:
Try the new online service – Your money claims account
You will be asked to answer a series of questions to determine if you can make an online submission. This is based on the amount you are claiming, who you are claiming against and the amount of people you are claiming for.
You cannot use this service:
- if you are under 18, or don’t have an address in the UK
- if you are eligible for legal aid,
- to make a claim against more than one person or organisation
- to make a personal injury claim
- to bring a claim against a government department/agency,
- to get your tenancy deposit back from your landlord,
- to make a claim against a person or organisation based outside England and Wales, or to make a claim in Welsh, or
- to bring a claim against someone without mental capacity or under 18.
Or you can complete a paper form and submit to the court
Follow the link below to the form:
There are also some notes to help you complete the form:
https://assets.publishing.service.gov.uk/media/664caaaaf34f9b5a56adcba2/N1A_0524.pdf
Useful link:
This is a helpful video on completing the small claims form.
Remember:
- To add your interest to your claim
- You can claim additional costs, such as costs towards Expert Witness Costs, this is capped at £750. So if your Expert Witness report cost £1,200, add £750 to your claim form.
What to do after you have completed the form
You need to produce a copy of the claim form per defendant and one for the court, you need to then either send your form electronically or by post to the court.
Step 3: After submitting the claim form
The defendant then has 14 days to respond from when the court issue the paperwork to respond.
They can respond with an ‘acknowledgment of service’ this means that they acknowledge that they are received the paperwork but that they need more time to respond.
If they send you an acknowledgement of service, they have 28 days to send you a reply. The 28 days start from when they receive the details of your claim.
If you used Civil Money Claims, the defendant has 19 days from the day the claim is made. If they need longer, they must tell the court. The most they can have is 33 days
Both you and the trader will be offered a mediation session with a court appointed mediator. Do take this opportunity, as it will not be looked upon favourably by the court if you refuse to attend. These appointments are usually by phone/video conferencing.
Sometimes a mediation session can help to resolve your claim, if it does not resolve the claim then a court date will be issued.
Step 4: Going to court
Gather all evidence, emails, texts etc- anything to do with your case and categorise it. You want to make it easy for a court to look at your evidence and see the story of what has happened.
You and the defendant will be in a meeting room with the judge, who will look through all the evidence and ask questions of both you and the trader.
Do:
- Provide a contents list of your evidence
- Consider the order in which you put the documents to tell the story
Remember:
The court won’t know your story, make sure that everything is easy to find in order of what has happened and when and ensure that it tells the story from beginning to end.
Step 5: The Judgement
At the end of the case, the judge will make a judgement. If this is in your favour then the trader will have a CCJ awarded against them. This means that you can now collect the money you are owed.
Step 6: Getting Payment
You now have a judgement against your trader, great, but how do you go about getting payment. Hopefully your trader will be ready to admit that they owe you money and will pay without further issues. However, that is rare. There are now several options open to you.
- Appointment debt collectors to collect the outstanding money on your behalf
- Apply to make your trader bankrupt
- Putting a charging order on any property they own
Debt collectors
You can appoint high court enforcement officers/debt collectors to collect the debt on your behalf, they will charge fees for the collection and this can be added to the debt that the trader owes you. They usually work on a commission basis. There are numerous debt collectors to choose from, but we would recommend using a debt collector that is FCA (Financial Conduct Authority) registered.
Bankruptcy
If your trader refuses to pay or debt collectors are not successful in obtaining your money, then you can apply to make your trader bankrupt. This would mean that you would need to present a bankruptcy petition to the court.
The fee for doing this is £1,500 plus £343 in court costs
Useful link:
https://www.gov.uk/apply-to-bankrupt-someone/apply
Charging order
This is a court order that secures the debt against your traders property, for example their home. This means that if the trader sells or remortgages their property, then the money from the sale of the property will be used to pay off the debt owed to you.
If you have won a CCJ against your trader, then it may be worth considering registering the interim charging order at HM Land Registry after you have a judgment. This will make sure the order is effective immediately. This could be useful if you don’t think you trader will pay or will move titles of ownership before you can collect payment.
There is a fee to be paid to raise a charging order on a property. This is an initial fee of £110. If the charging order is granted this can be recovered from your trader.
Useful link: