Debt Claim Series Part 1: The process of a simple small track debt claim

If so, this briefing note series is designed to explain the process of a simple small track debt claim in brief and the options you might have. 

It is not to be deemed legal advice, and the only way to ensure you have correct advice relevant to your claim is to contact us to assist. 

I am being pursued for a debt, or I need to issue a debt claim. What do I do?

Civil procedures can be daunting and scary. If you are trying to recover money or damages from someone or some company that has caused you loss, you may very well be entitled to money to compensate you for your loss.

It is often advantageous for individuals who have suffered a loss to instruct a solicitor to guide them through this precarious challenge and help clear a passage to success, as this will remove some of the day to day stress and anxiety from the litigation procedure. 

In the following series of seven articles, we will walk through the stages of a litigation process – from the inciting incident that gives rise to the entire claim to enforcement of a County Court Judgment. 

We shall examine each of these stages together from both the positions of the claimant and the defendant. However, the principles, time frame, and behaviour of the parties will translate to any number of claims from disputes between Landlords and Tenants, contested probates, neighbour disputes, defamation, and property damage. This list could go on and on.

This series is meant to be illustrative of a civil small track debt claim in an English or Welsh Court and not definitive. These articles are not a substitute for genuine legal advice, and if you have any queries about litigation that is either ongoing or in prospect, you should speak to your solicitor.

Do I need to issue proceedings against someone?

If someone has acted in such a way that causes you loss, you have a right to issue a claim against them in court to compensate you for that loss. This is often referred to as suing somebody or the right to sue. 

For example, you ordered an item from a local shop and paid a deposit or lent somebody money. The sales assistant assures you that it will be with you in 14 days. After two months of broken promises and delay, you give in and buy the item from somewhere else. The shopkeeper refuses to give you back your deposit. There is clear loss here arising from a breach of contract.

In this scenario, litigation may be a suitable avenue to explore in order to get your money back. Having decided to investigate litigating in order to recover your money, you might be wondering:

I need to sue someone. Where do I go?

Come and see us. This can be done either over the phone or in one of our five offices. Our litigation department has vast experience in running, managing, and handling a claim and can conduct the process for you with efficiency and grace. We will discuss your case with you, provide an estimate of time and fees, and take instructions on how you wish to proceed.

What do I need to bring with me?

There will be some administrative bits to get out of the way at the very beginning. Solicitors are tightly regulated and are required to take copies of your identification and proof of your address.

Importantly you should all of the relevant information you can about your matter. You may have a contract, bank statements, copies of order notes. Any messages between you and the other side – from emails and letters to texts and phone transcripts will help your solicitor build a picture of the case.

Most importantly is information on the other side, your relationship with them, and how the dispute arose.

All evidence that you think is central to your case should be shown to your solicitor as early as possible this will allow them to get an idea of your chances of success in court and advise you on what they think is the best possible course of action.

What will the solicitor do next?

The solicitor will review all of the documents you have provided and their notes from your meeting. They will assess whether you have a claim based on the information you have provided and clarify what those grounds are. This is usually set out in a client engagement letter which welcomes you to the firm and explains the next steps that the solicitor will carry out on your behalf.

As well as the client engagement letter, we’ll also send you SO Legal’s terms and conditions and information sheets relevant to your matter. 

We’ll try not to bombard you with information at this stage, but we find it useful for you to know what we’re talking about – if you have any questions at this (or any other point moving forwards), you now have a point of contact who can provide you with answers.

After you’ve digested all the information in that pack and you want to continue with the litigation, you’ll formally instruct your solicitor. You’ll be asked to place some money on account of costs and disbursements (like court fees) so that they can start work.

What’s the first step after I instruct my solicitor?

Often the first step taken is to write to the other side. Because litigation is a long and often complex process, we try and avoid it if we can. The Courts approve of this and expect the parties (that’s you and the other side) to resolve the matter outside of the court if at all possible.

The letter before action will set out the basis of your claim to the other side. The purpose of this letter is to try and explain to the other side how they caused your loss and how much money they owe you because of their actions. It is important at this stage to ascertain who you are suing.

There are a lot of questions we ask at this stage about the other side in the matter. For example, if it is an individual, do they have assets to enforce against if you win? If a company, are they solvent? Has there been some guarantee by a director? Are you the guarantor? 

These questions are vital for successful litigation. Even if you have the best possible claim, if the party on the other side is insolvent, you will not be able to enforce a judgment, so you could be throwing good money against bad.

Different types of litigation have to follow different rules – these are contained within practice directions and pre-action protocols. 

If your next-door neighbour owes you money, for example, the letter before action would have to comply with the pre-action protocol for debt recovery. These rules stipulate what information should be given to the defendant and how long you have to wait for a response before you can issue a claim.

It is possible to issue a debt claim without sending a letter before action, and many litigants in person (people who haven’t instructed a solicitor), but this is not recommended. By sending the appropriate letter your solicitor will protect you in relation to costs. We’ll talk more about costs in a later article.

The letter before action should be a bona fide attempt to settle the claim before it starts – and not merely a formality to get out of the way so the claim can be issued. If the defendant doesn’t concede, engage in discussion, or (which is the more common of the three outcomes) doesn’t respond at all, then you will be able to instruct your solicitor to issue your claim.

What if I’ve received a letter before action? Should I be worried?

If you’ve received a letter before action, then you should seek legal advice straight away. Solicitors have to be wary of conflicts of interest – as the same firm cannot work against someone who is, or has been, one of their clients. 

Unless the letter you’ve received has come from us, you can ask us to represent you in the matter and defend the oncoming claim.

If you’ve received a letter before action, you should show it to us as soon as possible. The procedure when you first come in will be much the same as above. We’ll need ID and proof of your address and all the information and evidence you can provide to show that the person claiming against you is mistaken or incorrect and that you do not owe what they are claiming.

We will review the claim for you and get a response to the claimant. You can at this stage avoid costs and further aggravation:

• Pay the sum if it is owed
• Defend the claim and state that either the basis of the claim is wrong or that the parties are incorrect (often a claimant will claim against an individual and not a company when they know they won’t achieve a result against the company)
• Wait until the claim is formally issued

Time is of the essence in claims, and you shouldn’t delay before visiting a solicitor. After reviewing the information and documents you provide, your solicitor will engage in correspondence and attempt to stop a claim from being issued. These are known as limitation dates, and these can be seen in our briefing note on limitation dates here.

Conclusion

When you issue a debt claim or are on the receiving side of a debt claim (the respondent), it is important to do the following:

• Look at the papers fully
• Speak to us and meet us/instruct us to review the claim. Provide ID, clear instructions and
• Look at who you are issuing against/if you are the correct respondent
• Discuss the timeline of events and matter with us
• Check limitation dates
• Issue a letter before action/reply to the letter before action – the preliminary step to issuing proceedings.

The next article will detail the process on issuing a debt claim when the preliminary work and letter before action has not warranted admission, payment or the result you wished for. At this stage, we need to actually issue.