Due the recent introduction of the Woolf reforms, which radically changed the civil court procedure, civil litigation is something that can only be successfully undertaken by Solicitors who specialise in that work virtually full time.
Unless your claim is for more than £5,000 your legal costs are rarely recoverable from the debtor, making it uneconomic to use a solicitor anyway.
As a result, and because I prefer non-contentious work, I only provide a limited Debt collection service. However, you can save time and money by carrying out a lot of the work yourself by following the advice below.
If at any time you need help, I will be pleased to suggest a lawyer that specialises in this field.
What should I do if I am owed money and the debtor CAN'T pay?
Before suing, consider how you are going to enforce any judgement. See I’ve won my case, what do I do now?
What should I do if I am owed money and the debtor WON'T pay?
What should I do if the debtor has a complaint or reason for non-payment?
If the complaint is unjustified, you should write briefly back, pointing out why the complaint is unjustified and asking for payment. Try to stick to the point in your letter – do not get upset. If matters are not resolved first, this letter will be read in court and a brief and polite letter will reflect better on you.
When should I sue?
Is there an alternative to suing?
You have to follow a statutory prescribed form. It will be worth paying a solicitor to do this simple task. The Demand needs to be served personally – unless you are able to do this yourself, you will need to pay an enquiry agent to do it for you.
If the statutory demand doesn’t work, you can then either resort to suing or issue insolvency proceedings, which are very expensive.
If there is any chance that the debt can be disputed (even on spurious grounds), a Statutory Demand is probably a waste of time: unless the dispute is clearly a sham, the court will automatically set the Demand aside at a special hearing and you will have to pay the costs.
Which court should I use if I have to sue?
If the debtor files a defence, the case will probably be transferred to the debtor’s local county court. If this is far away, it may make it uneconomic to continue with the case, so think of this aspect before issuing. Conversely, this transfer can work to your advantage – if the debtor’s local court has had frequent experience of the debtor, they will know that they are a ‘professional debtor’ and allow less opportunity for playing the system.
You can object to the case being transferred, but you will need a very strong argument.
How will the court manage the case?
You can find out much more about court procedures by going to www.courtservice.gov.uk and you can issue a claim online at <Money Claim Online>
What will it cost to sue?
If you use a lawyer you will incur their fees, which will depend on how much work is involved – these are not normally recoverable in claims below £5,000, making it normally uneconomic to use a lawyer in so-called ‘small claims’.
You will spend a lot of your own time preparing and fighting the case although this may not cost you in cash but it will distract you from productive work.
Enforcing any judgement will also involve paying court fees and use more of your time.
I've won my case, what do I do now?
- Charging Order This is similar to taking a mortgage over freehold or leasehold property, if the debtor owns such property or an interest in it.
- Execution This involves sending the bailiffs to the debtor’s address to see if there are any assets which are worth the bailiffs taking to sell to satisfy the judgement.
- Garnishee Order This is an order addressed to the debtor’s bank (if you can find out the identity of it and the number of the account), requiring the bank to pay the judgement debt from any funds in the account. Under this order, the bank would have to pay the lower of the value of the judgement debt or the credit balance in the account.
- Attachment of Earnings Order This is only applicable if the debtor is employed and being paid a regular wage. Under such an order, the debtor’s employer would have to pay the judgment debt by instalments by deducting them from the debtor’s wages or salary.
- Bankruptcy Although not strictly a method of enforcing a judgement, this is often an effective way of “persuading” a debtor to pay a judgement debt. However, it is only of any use if the debtor actually has assets and does not want to lose them. The danger of using this method is that it is initially fairly expensive and there is no guarantee of getting the costs back (if for instance the debtor is genuinely bankrupt). If you do not have any details of assets that the debtor might own, you can arrange a cross-examination about their financial affairs, to discover details of any assets.