Issuing a money claim

Think carefully before taking somebody to court. You may find it more effective and cheaper to solve your issue via mediation or another alternative dispute resolution (ADR) process. The courts strongly encourage finding an out of court method of settling your dispute and attempting this is usually part of the standard Pre-Action Protocols (ie the rules and procedures that must be followed prior to proceeding with a claim in court).

If you do plan on continuing with legal proceedings, remember to send the person who you’re claiming against a Letter before action first, to give them a final chance to settle their debt.

Even if the court action is successful, there is no guarantee that the debt will be recovered. It may not be possible to enforce the judgment (ie the court/judge’s decision), particularly if the person who you’re seeking money from has no assets. There may be other debts outstanding against them, which reduces the likelihood of the debt in question being paid.

Moreover, significant sums may be incurred in pursuing the case. The costs may escalate if the claim is disputed.

Issuing a claim online

You can issue a claim online by using the government service (ie the Money Claims service) or through the court’s service (ie HM Courts & Tribunals’ Money Claim Online service (MCOL)). To be able to issue a claim online, the claim must be:

• for a fixed (‘specified’) amount less than £10,000

• against no more than 1 person or organisation for the government service, and no more than two people or organisations for the court’s service

• not against a government department

• sent to an address in England or Wales with a valid post code

For use of the service, you will be required to pay court fees for online claims by credit card or debit card. 

Once issued, you will become the ‘claimant’ and the person you are issuing the claim against will become the ‘defendant’ of the claim. The court will usually issue, print, and send the claim form to the defendant on the day that it is submitted online. You will also be sent an email or letter detailing the date that the defendant will need to respond to your claim by. Claims started online are always issued in the name of Civil National Business Centre (CNBC), where all such claims are processed.

If you have been paid by the defendant after the claim form has been sent to them, you should tell them you have received their payment and update your claim online via the service.

Issuing a claim by post

This  is also known as issuing a claim ‘on paper’. This method should be used when you are claiming for an unspecified amount (ie where the amount that will be awarded is left up to the court to determine), but can also be used for fixed amount claims.

When issuing a claim by post, it is important to use the correct form. You must complete Form N1 with your details and the details of the person/organisation who owes you the sum being claimed. The form includes space for details of the claim.

If the claim is based on a written agreement (ie contract), for example, an agreement to purchase goods or services, attach a copy of the agreement to Form N1.

Don’t forget interest. If you intend to claim interest on the debt owed to you, make sure this is included on Form N1. For more information, read Calculating interest on commercial debts.

Send the completed Form N1 and relevant cheque (or postal order) to the correct address. The cheque or postal order will be required to pay the court fees; the fees are lower if you use Money Claim Online. 

The court will stamp the claim form and, in most cases, serve it on the defendant by sending it to the defendant by first class post. 

After issuing a money claim

If your claim progresses because the defendant disagrees with the claim or the amount claimed, you may be required to attend a hearing. At this point, your case will be transferred automatically to either the claimant’s or defendant’s local County Court to be heard. 

Depending on the complexity of the case, it will likely be allocated to either the Small claims track, Fast track or Multi track. 

It is possible for either party to ask for the proceedings to be transferred to another County Court or to be set for another date, via the County Court where the hearing is due to be held.

You should receive judgment on the same day as the hearing. The court will also send you a copy of the decision by post

If you are not satisfied with the decision on your case, you can choose to appeal it. This process must be started within 21 days of receiving judgment. You can find out which court to appeal to via the government’s court finder tool.

For more information about this process, read Small claims court. 

In Scotland, a money claim for up to £10,000 is brought in the Sheriff Court. There are two ways to bring a claim in the Sheriff Court:

• through the simple procedure – if your case is worth less than £5,000 and isn’t complicated 

  • you can also claim for delivery or recovery of possession of moveable property and for an for an order which makes someone do something specific, but only if the alternative monetary value of the claim would be £5,000

• through the ordinary cause - where your case is worth more than £5,000 and is complicated

For more information, read Small claims court in Scotland.

Simple procedure claims

A simple procedure claim can usually be made in the Sheriff Court closest to you. It may also be made in the Sheriff Court in the area where you or the respondent has its business (but this may not be convenient if it is somewhere else in the UK).

To bring a claim by simple procedure, an application must be submitted via the Scottish claims service, ‘Civil Online’. If you would like to submit a claim on paper, you must apply for Sheriff approval.

Where the claim is not simply for money, the value of the claim must be within the £5,000 financial limit to be brought via the simple procedure.

Ordinary procedure

When bringing a claim by ordinary cause, there is no prescribed application form. This system uses an initial writ (ie a document that sets out the details of the claim and starts proceedings) as a basis for a claim. Various examples of these can be found on Scottish Courts and Tribunals website. However, the initial writ is usually prepared by a lawyer.

As submitting a claim by ordinary cause can be a complex legal process, it is advisable to seek legal advice from a solicitor.

Time limits

No matter what jurisdiction you are issuing a claim in, you must always be wary of bringing a claim within the time limit (or ‘limitation period’). Time limits are the prescribed periods of time within which claims must be brought. Once a time limit has elapsed,  court action is no longer an available option.

Each category of claim (eg personal injury) will have a different time limit set. For example, the time limit for bringing a:

• personal injury claim is usually three years

• small claim for a defective product or poor service is six years after you paid for it

• civil claim in Scotland is generally five years

Responding to a money claim

Once a money claim has been issued and sent out by the County Court (in England or Wales) or Sheriff Court (in Scotland), the responsibility is on the defendant to respond to the court before the deadline.

The defendant has a variety of options available to them in response, depending on what jurisdiction the claim was issued in.

For more information, read How a claim is defended.