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Small Claims Court

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I am about to take ex-client to the small claims court about some outstanding fees.  Never been through the process so would appreciate any guidance and tips

1. I understand we need to send a letter before action or will a email suffice giving say 14 days notice to pay otherwise legal proceedings will commence ?  

2. How long does it the process take and are there delays due to the Pandemic ?

3. Can we obtain witness statements ?

4. I understand we can charge court fees and interest but what happens if we submit the claim and then the client pays in full.   Can we still pursue the client for court fees and interest ?

5. I assume there are no credit status implications for the client 

Thank you

 

 

 

 

Replies (52)

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By bernard michael
10th Mar 2021 10:35

The best way to claim is use the online service,which is currently going through changes but is still relatively easy

https://www.gov.uk/make-money-claim

As for current delays - almost certainly for an unknown period

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By tom123
10th Mar 2021 10:48

another vote for money claim online.

For a sole trader there is no credit effect until judgement.

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Replying to tom123:
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By sanjay100
10th Mar 2021 10:52

Its against a Limited company (property) so would it affect their credit rating. If it does then sure this ex-client with borrowings would not want to risk a judgment

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Replying to sanjay100:
By williams lester accountants
10th Mar 2021 11:04

Yes, if judgment is entered it will affect their credit file. But, once you submit a claim, if the client has no intention to pay, they can easily waste 12-18 months in taking it to a full hearing, applying for additional information, requests for additional time to file etc., so be prepared for a long wait til you see anything from this (assuming the judge finds in your favour!).

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Replying to williams lester accountants:
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By sanjay100
10th Mar 2021 13:36

I am sure some told me earlier that small claims court doesn't impact credit rating

If it does affect credit rating then I just don't think property business will want to even risk going to small claims court.

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Replying to sanjay100:
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By tom123
10th Mar 2021 11:08

If the judgement is settled within 10 days, then the debtor can apply for a certificate of cancellation.

After 10 days, they can apply for a certificate of satisfaction.

Presumably the debt is undisputed?

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Replying to tom123:
Lisa Thomas
By Insolvency Practitioner
10th Mar 2021 11:25

I thought it was 28 days?

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Replying to Insolvency Practitioner:
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By Paul Crowley
10th Mar 2021 11:38

I had one person pay by cheque at the hearing.
Person in charge knew about cheques
stated that I should wait 8 weeks before confirming payment

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Replying to tom123:
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By sanjay100
10th Mar 2021 12:11

Thanks - yes the debt is undisputed and has been paying buts here and there but now seems to be procrastinating. If he continues to pay at that rate then the debt may get cleared in six months hence trying to weight up if its worth taking him to court depending how long will it take or just hope and wait.

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Replying to sanjay100:
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By Southwestbeancounter
10th Mar 2021 14:59

It depends on how much money you're talking about and the client's particular situation i.e. if he is trying his best and it will take 6 months then so be it, we're all suffering at the moment and trying to help one another out, but if he is just delaying and you don't feel you'll ever get paid without formal action chivvying him along then that's another matter.

I've just had someone clear their bill (in occasional instalments as and when) from December 2019 but I know them well and they were broke so I felt happy being patient in the circumstances. It all depends on the specific circumstances.

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Replying to sanjay100:
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By Rgab1947
12th Mar 2021 10:11

Not worth it.

I took one person to Small Claims Court and had to pay a £70 fee. Walked away.

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Replying to sanjay100:
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By legerman
12th Mar 2021 15:16

sanjay100 wrote:

Thanks - yes the debt is undisputed and has been paying buts here and there but now seems to be procrastinating. If he continues to pay at that rate then the debt may get cleared in six months hence trying to weight up if its worth taking him to court depending how long will it take or just hope and wait.

You'll be lucky to get a hearing within 6 months tbh. One of my clients took a customer to court January last year and the hearing wasn't until December. A previous case (pre covid) took 5 months.

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By Paul Crowley
10th Mar 2021 11:29

I used to deal with this stuff in the past when there were 4 partners
You may find that in all the stalling and procedures you could end up spending more time on the court process and all the consequences than you spent doing the job in the first place.
And trust me it will annoy the heck out of you.

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By paul.benny
10th Mar 2021 11:36

Sanjay

I've done this recently myself on behalf of a family member. When you initially submit the claim you only need the briefest summary, essentially enough for the other party to know what you're on about - eg unpaid invoices, dated xxx.

They will receive a notice by post within a couple of days and have 14(?) days either to pay, or to indicate that they want to enter defence. If they choose to defend, that's the point where both parties save to submit evidence. In my case, the respondent paid up. If the case does proceed to hearing, most are done on paper

If they don't respond to the notice, you can request judgement. I think there may be another fee at that stage.

Covid didn't cause any delay for me because the process is mostly automated. Can't say whether it would delay a hearing if you get there.

I would certainly send a letter before action; 14 days is reasonable. Warn of additional costs if they fail to respond within the time. You do have to mark the case as closed if they do pay. It gives you an option for a part payment - eg if they don't pay the fees. You can chose whether to close it or to keep it open to recover the fees. No experience of how interest is dealt with.

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Replying to paul.benny:
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By sanjay100
10th Mar 2021 12:13

This is most helpful. Is it mandatory to send the letter before action or can I just send a email as was going to make an offer with a discount just to get rid of him.

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Replying to sanjay100:
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By paul.benny
10th Mar 2021 12:58

A letter before action is not mandatory but is good practice and I would certainly do it. As someone else has said, use recorded delivery post.

Don't offer discount or anything else. Just stick to 'pay up within 14 days or I will commence legal proceedings without further notice'. Or 10 days would be fine.

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By Paul Crowley
10th Mar 2021 11:43

Do not do it today
Wait out for more responses
Add the debt collection fee £40 if below £1000 and £70 if over £ 1000 ETC
Also add interest at 8% over base
Add these to the claim

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Replying to Paul Crowley:
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By sanjay100
10th Mar 2021 12:16

Actually that makes sense but I want to move on from this as quickly as possible so may just offer a discount % for prompt payment.

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Kitten
By Hazel Accounts
10th Mar 2021 11:57

I would send a letter with proof of posting (from the post office) rather than an emails can be flakey - you want hard evidence.

There's useful info on the Citizensadvice.org.uk website - have a look

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By memyself-eye
10th Mar 2021 12:39

the danger of offering a discount is that they will accept and then not pay promptly, whereas Aa ccj appearing concentrates the mind!

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Replying to memyself-eye:
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By sanjay100
10th Mar 2021 12:58

I would make it clear discount only applies for prompt settlement. Otherwise the full payment will be due if it went to court

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By Hugo Fair
10th Mar 2021 13:13

Unless you've got more than one client who "has been paying bits here and there but now seems to be procrastinating", I presume this is your ex-friend (from an earlier thread)? In which case, you need to decide your priorities (e.g. full payment or revenge or closure etc).

I know this is isn't answering your specific questions about the Small Claims procedure, but others have provided good advice as well as info. My point is that without knowing things like how much money is at stake and how much you value the ability to 'move on', it's impossible to say whether it's worth the costs and (potential) effort in chasing 100% payment - which may take a long time.

Like most people I hate being taken for a ride - but over the years have learned that it's sometimes more profitable (financially and emotionally) in the long-term just to walk away.
That said, there's nothing wrong in "making an offer with a discount just to get rid of him" IF you're prepared to accept whatever then transpires (i.e. he may agree then only make part payment) as there's not much point in piling on the agony if you go that route and THEN move on to the legal track later.

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Replying to Hugo Fair:
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By sanjay100
10th Mar 2021 13:40

I wrote off the amount for the friend but this relates to another client

I thought the small claims court was an easy and swift procedure. Amounts in question is £3000 over two companies. All the evidence is ready and with a property business he probably may have too much to lose if it goes to court. There is the time factor for them too. It will mean more hassle and stress for him. He isn't too good with paperwork and not switched on if you know what I mean.

He is not disputing the debt but he feels the charges were too high.

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Replying to sanjay100:
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By paul.benny
10th Mar 2021 13:48

If it's about the quantum of the fee, that's rather different matter from just not paying. He may well be inclined to defend the action, which means more cost and more time that you could be using more profitably. And you may end up with nothing.

He client said what he thinks he should pay?

This is now sounding like you should pick up the phone and negotiate a settlement.

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Replying to sanjay100:
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By Hugo Fair
10th Mar 2021 14:12

I'm sorry, but the story has just taken a major turn ... previously you said "the debt is undisputed" but now that "He is not disputing the debt but he feels the charges were too high." In my book that means the client IS indeed disputing the (amount of) the debt.

Courts are not friendly when the amount is in dispute - and will tend to assume that at least negotiation (or even arbitration) has been attempted before recourse to the law.

Arbitration is a whole other area you could explore - although the sum in question is probably borderline in terms of whether this is worthwhile.

With this new information I would definitely tend towards the solution OP proposed via negotiation. I might even be cheeky and offer a sliding-scale of discounts ... such as 25% off if paid within 5 days, or 15% if paid within 14 days, etc! The point is that you're not admitting to any problem with the original bill, but openly declaring a willingness to accept less in return for a rapid conclusion to the sorry situation.

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Replying to Hugo Fair:
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By sanjay100
10th Mar 2021 15:05

No its not disputed as he is not saying he is not paying. He just keeps pointing it out and won't let go. He has said he would pay from the beginning albeit reluctantly, my understanding is once you say you were going to pay and have been paying I don't see what ground he has in court to then claim that he refused to pay as the amount was too high. I am not sure he has much of a defence. Back my mind he will try to find holes in my work with his new accountant then his case may be a little stronger.

He may only realise the seriousness of the matter once I do pursue the amount legally.

I might give him 10% for prompt payment but thats about it.

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Replying to sanjay100:
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By Janski
12th Mar 2021 12:41

You say £3000 over 2 companies. So 2 separate claims would be necessary.

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By bernard michael
10th Mar 2021 13:54

Have you looked at Statutory Demand as a means of getting paid. Concentrates the debtors mind wonderfully. However don't use this procedure if there is a valid reason for disputing the debt as it upsets the judges

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Replying to bernard michael:
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By sanjay100
10th Mar 2021 15:07

Yes I had a look and they have stopped this process. Anyway, its very expensive

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Replying to sanjay100:
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By legerman
12th Mar 2021 15:28

sanjay100 wrote:

Yes I had a look and they have stopped this process. Anyway, its very expensive

Have they? A statutory demand is simply a document that says unless the debt is repaid in 21 days you can apply for a winding up order on debts over £750.00 and won't cost you a penny to serve. Obviously if after 21 days the client hasn't paid you then apply to the court for a winding up order, which will cost the best part of £2000.

However you could call their bluff, serve the stat demand then just proceed with County Court Action if he doesnt pay.

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By JD
10th Mar 2021 16:58

To avoid the debt being disputed you may wish to start one step back (before the letter before action) and send a statement with a reminder of the details of any payment plan you have and invite them to come back to you (within X days) if there is any difficulties or outstanding matters that that need to be resolved.

When it gets to the next stage of putting things in front of a judge, you are then able to show that you have been reasonable and that at X date the debtor felt that all was in order - it makes it obvious if and when they try and raise issues later to avoid payment.

....completed a request for judgement today, with the client concerned having not made any submission as separately he has already confirmed that there are no issues.

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@enanen
By enanen
12th Mar 2021 10:08

Move on and get some new clients. Stop work and if contacted for professional clearance approve but advise outstanding accounts so you cannot provide details of your work until paid no matter what anyone says. The time you will spend on court paperwork and procedures especially if contested will depress you.

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By birdman
12th Mar 2021 10:16

Not done this for a long time, but there was an online legal firm I used (all totally above board) who would send a letter before action, at a cost of just £3! My personal take was that if the debt wasn't paid after they received that letter, pursuing through the Courts was likely to be a waste of my time and effort. The only time I did go through the Courts was prior to discovering the former route, I obtained judgment with an order to pay £1 per week, which they did for about a month then declared bankruptcy. A quick Google showed that (eg) Lovetts Solicitors still provide this service.

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Replying to birdman:
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By legerman
12th Mar 2021 15:34

birdman wrote:

Not done this for a long time, but there was an online legal firm I used (all totally above board) who would send a letter before action, at a cost of just £3! My personal take was that if the debt wasn't paid after they received that letter, pursuing through the Courts was likely to be a waste of my time and effort. The only time I did go through the Courts was prior to discovering the former route, I obtained judgment with an order to pay £1 per week, which they did for about a month then declared bankruptcy. A quick Google showed that (eg) Lovetts Solicitors still provide this service.

Thomas Higgins is the one you're thinking of I think

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Replying to legerman:
Melchett
By thestudyman
12th Mar 2021 17:18

legerman wrote:

birdman wrote:

Not done this for a long time, but there was an online legal firm I used (all totally above board) who would send a letter before action, at a cost of just £3! My personal take was that if the debt wasn't paid after they received that letter, pursuing through the Courts was likely to be a waste of my time and effort. The only time I did go through the Courts was prior to discovering the former route, I obtained judgment with an order to pay £1 per week, which they did for about a month then declared bankruptcy. A quick Google showed that (eg) Lovetts Solicitors still provide this service.

Thomas Higgins is the one you're thinking of I think

Yes, most likely TH given the price.

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Replying to thestudyman:
Red Leader
By Red Leader
12th Mar 2021 17:49

Thos. Higgins still going but their prices have gone up. Still good value though. The £3 price was crazy but good while it lasted.

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Replying to Red Leader:
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By bernard michael
13th Mar 2021 08:53

Red Leader wrote:

Thos. Higgins still going but their prices have gone up. Still good value though. The £3 price was crazy but good while it lasted.

I've recommended them to clients and they've been very effective. The good thing about them is they are tenacious almost to the point of harassment

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Replying to bernard michael:
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By sanjay100
13th Mar 2021 23:28

Won’t the defendant realise these are just one of those cheap solicitors that are just sending emails and not officially representing you. They will just find out by googling. What I am trying to say it will not have so much effect than if I engaged a local solicitor myself

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By cbarling
12th Mar 2021 10:22

Remember that even if you win the defendant can suggest a payment schedule to the court. If his business is under financial stress, given the pandemic, the court is likely to accept this so you may be no further forward.

I actually wrote an article on this very subject a couple of weeks ago "How to sue in the UK small claims court" https://www.powerednow.com/how-to-use-the-small-claims-court

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Replying to cbarling:
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By sanjay100
12th Mar 2021 22:32

This is very useful indeed thank you.

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By CMPACDGDB
12th Mar 2021 10:26

Definitely do it; stealing expertise is theft. Have used small claims court for years and very effective. Strongly recommend LBA which can be final demand with statement that court action will follow if not paid. Note that in this Court you CANNOT claim legal fees unless exceptional circumstances apply, but you don't have to pay your adversary's if you lose either. You can and must claim court fees and can often claim a day-attendance if there is a hearing, and travel if you have to attend Court physically. You can also claim statutory interest at a month-watering 8% from when debt was due. My experience is that the majority (90%) pay in full as soon as they get the first letter from the Court, so I think highly cost-effective. Good luck!

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By CMPACDGDB
12th Mar 2021 10:27

Definitely do it; stealing expertise is theft. Have used small claims court for years and very effective. Strongly recommend LBA which can be final demand with statement that court action will follow if not paid. Note that in this Court you CANNOT claim legal fees unless exceptional circumstances apply, but you don't have to pay your adversary's if you lose either. You can and must claim court fees and can often claim a day-attendance if there is a hearing, and travel if you have to attend Court physically. You can also claim statutory interest at a mouth-watering 8%. My experience is that the majority (90%) pay in full as soon as they get the first letter from the Court, so I think highly cost-effective. Good luck!

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Replying to CMPACDGDB:
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By sanjay100
12th Mar 2021 22:42

Thank you. The case is relatively straight forward and he knows he doesn't have a defence though back of my mind he may try to pick holes with my work.

I know for several reasons he won't want to risk court acti0n. I am hoping LBA will make him understand I am serious as enough is enough.

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By Michael.Hall
12th Mar 2021 10:26

Complete waste of time! Went down the 'money claim online' route a few years ago for an unpaid bill of approx. £400, which then cost another £75 or so in fees, etc. Got to the Small Claims Court where the 'judge' told the defendant and myself to 'stop behaving like a pair of silly schoolboys, to go away and sort things out yourselves'. And I lost a day's earnings on top! Never again!!

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Replying to Michael.Hall:
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By CMPACDGDB
12th Mar 2021 10:28

And you didn't appeal??

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By John Wheeley
12th Mar 2021 10:31

Do you have a valid letter of engagement in place ? It might be the first item that the Court examine.

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Replying to John Wheeley:
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By sanjay100
12th Mar 2021 22:45

Yes in one case but not the other due to time pressures at the time and accounts were due. The work was completed and only question was the amount reasonable.

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By Watson Associates
12th Mar 2021 10:45

Send all the directors a letter stating that if the Company can't afford to pay your bill it would seem the Company is technically insolvent & should cease trading immediately. If it doesn't then the Company could be guilty of wrongful trading meaning that the directors could be held personally liable. Then do a joint claim against the Company & the directors if required.

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By davidbrewster
12th Mar 2021 11:07

I have dealt with one Statutory Demand. It is free and can produce a wake-up call but to progress would require professional legal advice in my view . In any event, COVID-19 does restrict the issue at the moment.

I have experience of three online money claims.

One against a major retailer who settled in full fairly immediately.

One against a major insurance company who filed a defence through solicitors. After a lot of work producing a Statement of Claim settled at 50%.

In both those cases, whilst in the hands of the court emailed the defendants separately with copies of correspondence to and from the court.

The third case against a client with O/S invoices who had never disputed them, just ignored them but nevertheless filed a six page defence after receiving a judgement in default. That happened on 4/12/2020 and have not received anything much from the court that makes any sense since.

The online Claim Form does not allow much space to set out the case and the court will request further particulars in the event of a defence.

I don't think the Small Claims Court require any defined Pre Action Protocol (as such) but it makes sense to go through this process before action.

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Replying to davidbrewster:
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By sanjay100
12th Mar 2021 22:52

Sorry the defendant has still not paid in the third case ? What happens now after you receive judgement.

Will that impact their credit rating after judgement

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