How to Issue County Court Claims, and Obtain CCJs
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County Court claims and CCJs
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A County Court Claim takes place when an individual or business applies to a County Court to demand payment of an unpaid debt from a company or person. Any person or business can apply to a County Court to demand payment of an unpaid debt in accordance with Part 7 of the Ministry of Justice’s Civil Procedure Rules.
Before applying for a County Court Claim, a claimant should 1st serve the debtor with a pre-action letter. This is a formal notice explaining the circumstances surrounding the debt, and requesting payment within 14 days.
You can make a County Court Claim if the defendant fails to pay or reach an agreement to pay. The court fee, which is paid in advance, depends on the amount of the claim. Fees are less expensive online, and claims in excess of £100,000 can only be made via post.
Proceedings commence when the court issues a claim form, which must be completed by the claimant, along with the Particulars of Claim (POC). The POC, which can be included on the claim form or attached separately, outlines exactly what the claim is about.
Upon receipt of payment, the claim form, and POC; the court will process the action, and issue a County Court Notice to be served on the defendant who has 14 days to acknowledge receipt.
A defendant who fails to respond in time is deemed to have accepted the debt. This could lead the claimant to file a Request for Judgment form for the court to order a judgment in default. However, judgments in default can be set aside because the court has only heard from 1 party.
When a claim has been defended, before scheduling hearing dates, the court will write to both parties and suggest they try settling the dispute though mediation. Both parties will be advised to attend a mediation centre where they can share the cost of hiring a mediator at rate of around £1,500-day.
If you're bringing a claim and get past the mediation stage, before going to trial, the court will require both parties to fill out a Directions Questionnaire. This will help the court manage the case, and decide whether the claim should be allocated to the small, fast, or multi track (see below).
For small claims of less than £10,000, neither party is entitled to recover their costs. As a result, it's sometimes better for claimants to represent themselves as neither party will recoup their legal expenses.
Fast Track and Multi Track
Fast track claims are valued between £10,000 and £25,000. Although these claims are hurried through the system, they can take 12 to 18 months to go to trial depending on how busy the court is, and the complexity of the case. Multi Track claims - for debts greater than £25,000 - are prioritised as they tend to be complex and involve more litigation.
Some defendants frustrate the process by deliberately failing to comply with court-issued directions. This forces the claimant to apply for an Unless Order, which declares that unless the defendant complies by a particular date; their case is liable to be struck out of court. Unless Orders sometimes backfire because even if a litigant wins or successfully defends a claim; the courts may order them to pay all the costs as they were the non-compliant party.
County Courts are loathed by claimants because even the most flimsy defence can buy a defendant an additional 6 months for a debt they’d originally agreed to pay in 30 days. As a result, it's normal for claimants to spend £10,000 to £15,000 trying to recover a £30,000 debt. Even if the claimant wins; by the end of the trial, the debtor would've had their £30,000 for 12 to 18 months.
Moreover, it's become conventional that when the claimant tries to collect payment, they discover the debtor company has collapsed and reconstituted elsewhere. Consequently, claimants often prefer to chase overdue debts by issuing a winding-up petition because this action is swifter than the County Court process.
But a claimant cannot issue a statutory demand or a winding-up petition for a disputed debt. Consequently, a shrewd debtor, who has no intention of paying, will create a dispute. These types of disputes rarely come up immediately. Usually, they arise after the 1st request for payment has been made.
Advice for Claimants
A claimant who's chasing a sizeable debt, but knows little about the defendant should consider applying to the court for an oral examination. This requires the defendant to attend a hearing to answer questions under oath about their income, assets, savings and expenditure. From the information disclosed, the claimant can decide which type of enforcement action will best help them recover the debt.
County court debt claims are complex and you will need expert advice and support. I&L helps claimants recover monies quickly. Call 020 7504 1300 now for free and confidential advice…