Defending a small court claim

What is a small claim?

Why might you face a small claim?

A company's chasing me for a debt – what do I do?

You should check your credit agreement. When you take out a personal loan, credit card, payday loan or other form of borrowing, your agreement will typically be covered by the Consumer Credit Act. This means the lender has to follow a set process before taking you to court and must send you the following documents...

• A default notice. This should include detail on what the lender believes you owe, plus how long you have to pay – which must be at least two weeks from when you receive the notice. If your finances have changed and you can make some or all of the missed payments, do tell the lender, as it may be that you can arrange a payment plan.
  
  If you need to, try talking to a debt help charity, which can be a great support. Resolving the situation with the lender is likely to stop it from taking further action.
  

• A 'letter before claim'. If you don't respond after getting a default notice, the lender may send a letter before claim. This is a formal notice that the creditor is actively considering court action and should not be ignored.
  
  Responding at this stage can sometimes prevent court action altogether, and you can still make an offer of payment if you can't afford to pay the debt in full. Ignoring the letter makes court action more likely.
  

• A claim pack. This is a set of official court documents sent when a creditor or company formally starts a court claim. This means the matter has moved from debt collection to the court process.

If you don't believe you owe the debt, you'll need to challenge the claim by following the step-by-step help in this guide, which begins with replying to the letter before claim. You normally have 30 days to respond.

Bear in mind that if you lose in court, you'll still have to pay what you owe, and possibly the other side's fees and expenses. Plus, you could potentially get a county court judgment marked on your credit file, which can make it harder to get credit, loans, phone contracts and even some rental agreements. So, closely consider whether you should defend the case.

Is there a cut-off to bringing a court claim?

Yes, there is. And it's because of a legal limitation period which caps the amount of time someone has to take you to court.

Once you've passed this limit, you typically shouldn't have to face a court claim. The amount of time depends on where in the UK you are, and the type of case.

When is the cut-off?

Is the debt written off after this time?

The rules are different across the UK:

• In England, Wales and Northern Ireland, the debt is not written off after six years, but it typically can't be enforced through the courts. As such, a creditor may make other attempts to claim the payment, such as by hiring a debt collection agency.
  
  However, this is not court enforcement, and you usually won't be forced to pay unless you choose to.
  

• In Scotland, in most cases the debt is completely written off after five years if you haven't made any payments or acknowledged the debt in this time. Once this happens, it no longer exists in law and can't be enforced.

I've had a small claim made against me – what are my options?

The first stage of possible court action is the creditor sending you a 'letter before claim', but it's important to note that court is by no means the only outcome after this. In fact, the court will expect you and the other party to do what you can to resolve the situation as soon as possible, before a hearing.

You have three main options once you become aware of a small claim potentially being made against you:

• Accept the claim and pay

• Accept part of the claim and dispute the rest

• Deny the claim and fight it in court

While this guide is mainly about fighting a small claim, it's crucial to know what your options are, and to be able to make the right decision for you, based on your own circumstances...

Accept the claim and pay the debt

If you agree that you owe the debt, you may just want to accept the claim and pay the money. You can do this at any stage of the claim, but it's generally better to do it earlier to avoid further court action and potentially a county court judgment (CCJ) on your credit file, which can have a negative impact on your ability to borrow money in future.

If you accept the claim after it's been issued, the court will typically still give you a CCJ, but if you pay in full within 30 days, it can usually be removed from your credit file. Paying later means it will stay on your record but be marked as paid.

Deny the claim and fight it in court

If you don't accept the claim, then you could fight it in court. You should closely consider whether this is the right move, however. As explained above, you may have to pay significant fees if you lose, so it's really down to how strong you believe your case to be.

If you think the dispute is genuinely unfair – for instance, you were incorrectly penalised when parking, then it could be worth pursuing. But this is really down to your own judgement.

Should I defend the claim?

You should consider fighting the claim if you have a strong defence. The basis of this defence, which you'll need to outline and explain in your defence form, will likely be one of the following (although this list isn't exhaustive):

• You have already paid the amount being claimed.

• It's been issued for the wrong amount.

• It's been issued against the wrong person.

• It was issued out of time – most debt claims must be started within six years (five years in Scotland).

• The debt doesn't exist – for instance, you didn't have an agreement with the claimant.

• The goods/services were never provided or were faulty, making you not liable.

As explained above, you could respond by offering to pay the claimant a lower amount instead, if you believe the total being claimed is unreasonably high. However, do note that this could still end up with you being taken to court.

Take into account the costs

Only the claimant (the person or company making the claim against you) pays initial fees to bring a case to court: an upfront court fee and a hearing fee (if it gets to court). As the defendant, you'll only have to pay fees and the claimant's expenses if:

• You lose the case. If so, the judge will order you to pay the claim amount, plus some of the claimant's basic expenses, such as court fees, travel costs and lost wages (capped at £95 a day).
  
  You can read more about paying court fees below, including the help available if you're on benefits or a low income.

• You make a counterclaim against the claimant. You would only make a counterclaim if you believed the claimant owed YOU money. To do this, you'd have to pay a court fee – which would cost the same as if you were making a claim separately yourself. See more info on costs in our main Small claims court guide.
  
  

Consider getting help before deciding

It can be a good idea to consult with a legal professional before making a decision. There are lots of free or affordable options, as Citizens Advice outlines. These include going to a law centre or contacting Citizens Advice directly if it's a consumer issue.

You may also qualify for 'breathing space' during this time (either before or during court proceedings). This government scheme can temporarily pause court and enforcement action for up to 60 days, giving you time to get debt advice. If you're struggling during debt proceedings and think you may be eligible, the scheme could be worth applying for. This guide to breathing space from the charity StepChange has more details.

Step-by-step help for defending a county court claim

So, you've decided to fight the case. What now?

Well, going to court may appear a daunting prospect, but small claims court procedure is designed to be navigated without a solicitor's help. There won't be gavels, a jury, and you won't have to take an oath, for example, but you WILL need to state that what you have said in your defence statement is true – embellishing the truth could land you in hot water.

The court also expects both parties to do as much as possible to reach an agreement before a hearing – this is partly why, for many money claims under £10,000 (especially those made online), you'll be referred to free mediation, though this doesn't apply in every case. More on mediation later.

Do note that there may be differences in the process you experience than what is described below, depending on your specific case. You should always follow the directions set out by the court, even if they differ from what is described here.

Step 1. Reply to the 'letter before claim'

Step 2. Respond to the court claim

Assuming your case isn't resolved by your response, you'll now likely receive a court claim. Even at this stage, some cases may not go on to a hearing, but it's useful for you to be aware of the next steps:

a) Acknowledge the court claim form

Doing this lets both the court and claimant know that you intend to defend it. You must respond to the claim by replying within 14 days of receiving it, though if you use a form called an 'acknowledgement of service', you get 28 days to reply. So using the official form lowers the risk of a default judgment, which is where the claimant automatically succeeds with their claim because you haven't responded to them. You could also offer to pay a different amount at this stage.

Here's what to do next, depending on where you are:

• In England and Wales, respond via the Money Claim Online (MCOL) service or the Online Civil Money Claims (OCMC) service, depending on which one the claimant used. If the claimant made a court claim using a paper form, you must respond by post instead. You can also reply to an online claim by post if you can't get online. Read this explainer by Gov.uk for more info – plus directions on what to do.

• In Scotland, respond via Civil Online, or complete and print the form and send it to the court. You must also send a copy to the claimant. There are more details on the Scottish Courts and Tribunal Service website. You generally have 21 days to respond.

• In Northern Ireland, you must complete a 'notice of intention to defend' and return it to the creditor within 21 days.

b) Write your defence

You should include as much info as you can, such as key facts and any legal arguments you want to make. Be sure to address each point of the claim and state whether you admit or deny it, or neither, and explain your reasoning. If you don't address a particular allegation, the court may treat it as admitted, unless the rest of your defence clearly disputes it.

If you intend to make a counterclaim, state this as a separate header in your defence – the fee for this is based on the value of your claim, similar to making a standard court claim.

c) Submit your defence

• In England and Wales, send your defence to the Civil National Business Centre (CNBC).
  

  

  Use either:
  
  - The MCOL system via your Government Gateway account (don't forget to hit the 'submit' button), OR
  
  - The OCMC system (you'll need to create an account) – formally known as a Civil Procedure Rules (CPR) defence
  
  As above, you'll have 14 days to file your defence (28 days with an 'acknowledgement of service'), but the MCOL or OCMC system will confirm your exact deadline when you log in.
  
  You could also instead email or post your defence, although MSE Forumites say this is less reliable and not guaranteed to be received. So, put it in using MCOL or OCMC if you can (beware the character limit).

• In Northern Ireland, you need to submit your defence directly to the court office within a timetable set by the court (usually shortly after it receives your 'notice of intention to defend').

• In Scotland, you'll only need to file a separate defence for an 'ordinary cause' case. This is done directly to the court, so not online.

d) Complete the 'directions questionnaire'

If you're in England or Wales, the CNBC will send you an N180 form (aka a directions questionnaire), which you must complete and return to the claimant and the court. This will help the judge to better understand the case. You'll need to respond by a set deadline, otherwise you could see your defence struck out, meaning you won't be able to go any further and you could lose by default.

If you intend to use an expert (for example, a mechanic or engineer if it's a case involving a car), you'll need to ask permission to do so on the form. You'll also need to pay the expert's fees, but if you successfully defend the case, the judge may order the claimant to pay these costs, up to a cap of £750.

In Scotland or Northern Ireland, you're not sent a directions questionnaire. If parts of the case need to be discussed, the judge or sheriff will arrange a hearing at court.

e) Submit any other documents

In England or Wales, the case file will then be transferred to your local county court, and you'll eventually receive a 'notice of allocation', giving you a date and time for the hearing. It will also specify a deadline for you to submit a witness statement and any other documents you intend to rely on, to the court and the claimant – usually 14 days before the hearing, but sometimes earlier than that.

Your witness statement can expand on your defence statement and should include any evidence to back up your case.

In Scotland or Northern Ireland, the judge or sheriff may direct you to provide evidence in writing, but often you just say what evidence you have at the hearing. There isn't always a formal 'witness statement' stage like in England and Wales.

f) Attach a costs assessment

Be sure to attach a costs assessment (just an A4 page) if you are taking a day's leave from work, have specifically incurred other costs, or have had to pay for childcare or travel to the hearing. Take proof of costs, such as receipts and wage slips, to your court hearing, should it get to this.

Step 3. Take part in mediation

Step 4. Go to the court hearing

The day of the hearing

Get there half an hour early so you can go through security and sign in with the usher in good time. Once in, don't discuss anything with anyone from the other side, if they attempt to talk to you – wait until the case is officially heard in the court room.

During the hearing itself, be confident but respectful. Take a crib sheet with bullet points to help you focus if you're representing yourself, plus printed versions of both sets of witness statements and evidence, so you can follow what is said.

The judgment

Once all the evidence is heard, the judge will make their decision. As a civil law case, this will be decided on the 'balance of probabilities' – in other words, if your version of events is more likely true than not then the judge will rule in your favour, and vice versa. If you've attended court, you'll hear the judgment at the end of the hearing, plus the judge's reasoning behind this. If you don't attend the hearing, you'll be sent a letter with the judgment.

• If you win, you've successfully challenged the dispute. You now won't have to pay the claim or any court costs. You'll also be able to ask that the claimant pays some of your costs (although bear in mind that this is at the judge's discretion and is not guaranteed).

• If you lose, you WILL have to pay the claim. Plus, you'll have to pay the court fees, and, potentially, other expenses too (see details of court fees in our main Small claims court guide). We cover what happens if you lose below.

What happens if I lose the case?

If you lose a small claims case, the judge will issue a judgment against you (commonly known as a county court judgment, or CCJ). You'll be sent a copy of this in the post, which will explain the judge's decision and include an order to pay the amount owed, plus any costs.

The judgment will also lay out the payment terms: saying how much you must pay, who you must pay and when the payment must be made by. You typically get 14 days to pay, but if you don't do so by this point, the creditor can ask the court to enforce the judgment, which may include:

• Taking the money from your wages. The court can order your employer to do this.

• Freezing and taking money from your bank account. Or, in some cases, money can be taken directly from your benefits.

• Sending bailiffs (enforcement agents) to your home to collect the money. You'll also have to pay bailiff's fees on top of the outstanding debt.

In very rare cases, you could be imprisoned for ignoring a court order relating to a debt – for example, if the court believes you're deliberately refusing to pay when you can. However, this is highly unlikely, and prison isn't a normal outcome for unpaid consumer debts.

Quick question

What if I'm unable to make the payments?

In this scenario, you have two options:

1. Get financial help

2. Ask for the terms to be changed

It's possible to apply to the court to change the payment terms. This won't change the total amount you owe, or cancel the judgment altogether, but it can alter:

• How much each payment is

• How often you pay (for example, monthly instalments instead of upfront)

• Whether payments are delayed or spread out

The option that's available to you depends on how the payment terms were originally set: this could have been either by the court, after the judge or a court officer considered your circumstances, or without someone looking at what you could afford (for example, if you hadn't attended court and a default judgment was entered, then the terms would be decided automatically, based on procedure). Which applies to you depends on how your case developed.

It's also important to be aware that some of these options involve extra court fees. So, weigh this up against the financial impact of the current payment terms if you don't qualify for support.

a) A redetermination of payments

This is where you ask the court to change how much you pay in each instalment. You can only do this if:

• The court set instalments without a hearing, and

• You apply within 14 days of the court sending you the payment terms

To apply, simply write to the court explaining your financial situation and what payments you can realistically afford. There are usually no fees involved in this process.

b) Vary a judgment where the court didn't set payments

You can apply to vary a judgment (and therefore the payment terms) if it was made:

• In default (you didn't respond, so the full amount became due), or

• On admission (you offered payments and the claimant accepted)

You'll need to complete an N245 application form and pay a £15 fee. This is a fixed fee and the process doesn't usually require a hearing.

c) Vary payments that were set by the court

You can apply to have your payments varied using an N244 application notice if they were set by the court – but only if you can't afford the payments or your circumstances have changed since the order was made. For example, this might apply if you've lost your job or someone has become dependent on you.

This is the same application form as you'd use to apply to set aside a CCJ.

There's usually a fee to apply (which can be around £313), though you may be able to get help with fees if you're on a low income.

Can I appeal against the decision?