Legal Article - Business Law
County Court Claims and County Court Judgements (CCJ’s)
It is a fact of life in most businesses that you will either receive, or wish to issue, a claim through the courts.
If you make a claim against another person, perhaps to recover a debt, seek payment for a bounced cheque, claim for lack of title etc, then you, the Claimant issue a claim and if you receive a claim then you, the Defendant, either admit all or part of the claim or defend it.
Like marriage it is not something “to be taken lightly”. If you issue a claim then you will have to pay a fee which depends on the amount of claim. You may have to go to Court and there will be deadlines to be kept along the way which if neglected will mean the claim may be thrown out.
If the Defendant doesn’t pay, assuming you are successful then there is extra to pay for enforcing the Judgement either with bailiffs or otherwise. If you are not successful you may have to pay a large chunk of legal fees to the other side.
If you defend a claim then once again there are timetables to be followed which if missed can lead to you being stopped from defending your case. If you are unsuccessful in your Defence you may have to pay legal fees to the other side.
The issue of legal fees is extremely important. Generally for claims up to £5000 they are heard in the Small Claims Court where legal fees are limited. However, if above £5000, and the case is heard in the County Court then full legal fees are allowed.
It is not unusual for the fees in a claim to amount to over £2000!
Author: Dennis Chapman
Defending a Claim in the Small Claims Court
Defending a Claim in the Small Claims Court
The most important advice is DON’T IGNORE IT or delay dealing with it. A timetable has started to run and must be adhered to.
Within the pack of documents you will have received is a form headed “Response Pack” which includes an Acknowledgement of Service. It is always wise to send this back to Court within 14 days in order that it will then give you 28 days to prepare a full Defence to the Claim.
This should reach the Defendant within 14 days from service. Any interest claimed must be added.
If you cannot make the full payment straightaway you will need to fill in details of your circumstances and offer an amount by instalments.
Fast Track cases in County Court
Fast Track cases in County Court
The Small Claims division of the County Court, is where the majority of claims arise, since most claims do not exceed £5000 (the limit at the time of publication).
Perhaps the most common scenario is for the motor trader to defend a claim when the customer decides to make a claim because they are not getting the answer they want when their car has developed a fault. In such cases the amount of the claim is usually less than £5000.
Claims higher than £5000 could arise when a customer attempts to reject a car, or you may either be claiming or defending (and perhaps both) where you have been unfortunate in buying and selling a stolen car or a car on finance.
The decision on how to deal with either a claim or a defence when the case goes outside the small claims limit takes on a different dimension.
If you are making a claim against another person, that other person can engage the services of a solicitor/barrister to defend the action. If you are unsuccessful then you become liable to pay the full cost of that legal representation. For a “simple” case of a breach of satisfactory quality the legal fees alone can rise to £3000+.
Similarly if you are defending a claim and you are unsuccessful clearly the same will apply. Very many cases are not clear-cut and there is an element of risk when proceeding with court action.
It is therefore very wise to assess whether, say, it would be preferable to take a car back and refund the purchase price rather than drag it out in Court and have a potential hefty bill for legal fees to pay at the end of the day.
In a similar way you may be the subject of proceedings for, say, a claim for lack of title if you have inadvertently passed on a stolen car or one subject to finance. In such cases it may be clear-cut that you would win the day, but the person from whom you purchased the vehicle may not be traceable or, if traceable, not have funds to settle the claim.
In such a case it is not worth running up any further legal bills if you are not going to get the fees back at the end of the day.
When the claim is for £5000+ the claim will generally be heard on the Fast Track. The work involved with a Fast Track case is generally much more than for a Small Claims case. A lot of material needs to be prepared and strict timetables apply.
The first stage after the claim and defence is entered is for an allocation questionnaire to be completed as with Small Claims cases. If the other party agrees the case can be heard in the Small Claims Court but costs can be allowed.
Once the allocation questionnaires have been returned to Court, the next stage will be to receive Directions from the Judge as to a timetable to carry out all the stages before the case comes up for trial.
It is down to the Judge to decide this timetable but standard directions are as follows:
- by 4 weeks after allocation to the particular court e.g. fast track, each party must disclose what documents are relevant to the claim. Each party must also allow the other party to inspect the documents and provide copies.
- by 10 weeks each party must have exchanged witness statements. These are a full account by anyone who is to be a witness of who, when, where, what, and perhaps why, relevant to the case.
- by 14 weeks if an expert is being used then expert’s statements must have been exchanged.
- by 20 weeks listing questionnaires will have been sent out by the Court to be returned within 2 weeks.
The listing questionnaire is merely a set of questions to make sure all the directions have been complied with, whether any further directions are needed, whether the expert can give oral evidence, how long the trial will be (max 1 day in fast track), and direct how the trial bundle (of documents) will be made up.
- by around 30 weeks the trial will proceed.
Multi-track trials are usually reserved for complex cases and would rarely be used for consumer type claims. Along the way the judge can hold case management conferences and a pre-trial review.
What to do if the Bailiffs come
What to do if the Bailiffs come
If you are the Defendant in a court claim and you do not pay the debt e.g. if you do not reply to a summons issued against you then a bailiff may appear on your doorstep trying to take away goods to be sold at auction to satisfy the debt.
There are different types of bailiffs for different types of debt as follows:
• County court bailiffs – these typically follow up debts through the county court and are the most likely ones that you would find seeking a county court debt.
• Sheriff’s officers – these are the equivalent of county court bailiffs but for the High Court.
• Certificated bailiffs – these are employed for debts to local authorities, parking offences, council tax etc.
• Non-certificated bailiffs – these cover all other types of situation.
What do I do if a bailiff arrives?
Firstly you should ask to see the bailiff’s authority. Remember, if it is solely private property and you let them in, then they may seize your personal property if you are the debtor. They do not have a right to enter private property – you can refuse entry.
Secondly you should find out what debt they are seeking to enforce. If you agree with the figures then you can make payment there and then. The debt will have increased through bailiff’s fees etc.
You can ask them to allow you “walking possession” of the goods so that you have time to pay. In such a situation the goods are essentially “quarantined” and can be seized on the next occasion if you fail to pay. Remember if the goods are seized then they may need to take a lot to be able to get a reasonable return from the auction.
If you have disputed the debt and an Application has been sent to the court to seek to get judgement set aside, explain this to the bailiff and show them a copy of the Application.
They can only seize goods that belong to you and as previously indicated there are restrictions on what sort of goods can be seized.
There is a complaints procedure if you feel the bailiffs have not acted within their remit and we can advise on this.
Issuing a Claim in the County Court
Issuing a Claim in the County Court
It is usual for the claim to be transferred to the local Court for the Defendant. This can be a nuisance if the Defendant lives a long way away. You have an opportunity to request the claim be moved back, though, but this is not guaranteed.
When Form N1 has been completed you need to send it to the Court, ideally with a copy to be sent to the Defendant, along with the appropriate fee (details from Lawgistics or the County Court). Keep a copy for our file.
From the date the debt arose you are allowed to claim interest at 8% p.a. If you wish to claim interest you need to specify it on your claim form where it asks for “particulars of claim”.
The usual wording is:
“The claimant claims interest under Section 69 of the County Courts Act 1984 at the rate of 8% per annum from (date of debt) to (date of issuing claim) of £ (interest amount A – see below) and also interest at the same rate up to the date of judgement or earlier payment at a daily rate of (interest daily rate B – see below)”.
To work out the daily rate of interest, “B”, you multiply the amount of the claim by 0.00022. To work out the larger interest amount “A” you multiply the number of days by the daily rate of interest “B”.
If you owed £5000 the daily rate of interest “B” would be £5000 x 0.00022 = £1.10
The larger amount “A” would depend on the number of days between the debt owing and the date of issue.
If, say the debt became due on 3rd April and the claim was issued on 30 October this is a separation of 210 days.
So amount “A” would be: £1.10 x 210 = £231
The Court sends the claim to the Defendant. The Defendant has the choice of either admitting the claim, in which case he/she should send you the full amount claimed, or defending the case, or doing nothing at all.
If the Defendant does nothing at all, you will have already received a notice from the Court confirming the dates of service etc. The small claims court imposes definite time restrictions and if a defence has not been received by the Court within 28 days maximum then you can apply to have Judgement entered using that same form.
Unless there is some special reason for wanting payment made immediately it is probably wise to allow, say 7 days, for payment to be made.
If the Defendant is going to defend the claim then you will receive an Allocation Questionnaire, which asks for some basic details about the case, including who you will use for witnesses, and what dates they are not available.
If the issue is a technical one then an expert may be needed to help the Judge reach a decision. It is sensible to agree an expert with the Defendant if you can as it keeps down costs. The Judge can currently only allow £200 towards expert fees.
If for some reason the date of the hearing has become inconvenient then you have to make an Application to the Court to have it changed. A fee may be chargeable.
The hearing of the claim is informal and usually in a private room. The decision is made at the end of the hearing.
In a Small Claims Court the grounds for appeal are very limited. It would generally only be on a point of law – not fact. If you wish to appeal then you must apply to the Court immediately.
Removing County Court Judgements
Removing County Court Judgements
If you have an award made against you then the Judgement will usually be entered on the Register of County Court Judgements. People supplying credit, check this Register to assess whether to give credit. For a fee it is possible to search the register for any entries against you.
A judgement can be removed from the Register by:
either - paying the full amount of the judgement within one month or - getting the judgement set aside which requires an Application being made to the Court.
If the judgement is not removed it remains on the Register for 6 years. If it is paid then an entry of “satisfied” is put on the Register.
Ideally you need to get the Claimant to confirm payment has been made but in any event a letter must be sent to the Court with that confirmation or a note indicating the other party have not confirmed. A fee must also be paid to receive confirmation of removal or satisfaction.
Enforcing County Court Judgements
Enforcing County Court Judgements
If you win a claim against someone else then that Defendant has a choice of:
a) Paying the claim in full
b) Paying a part of the claim
c) Not paying at all
If payment is made in full then clearly there is no further action necessary. Payment of part of the claim can be an agreed settlement. If the Defendant is not well off then he/she may genuinely not be able to pay the debt.
It is no good throwing more money at a claim to try and recover the debt if there is no likelihood of getting any more money at the end of it. It may go against your principals but it may well be a waste of money.
If you are not happy with a part payment or if the Defendant does not pay in full then there are a number of options to enforce the judgement.
The most common choice is to request a warrant of execution procedure. This does not involve capital punishment(!) but involves sending bailiffs to recover goods, which can be subsequently sold to recover the debt.
There are a number of options and it can be confusing to know which is the best course of action.
Other choices include:
• Attachment of earnings order
• Garnishee order
• Charging order
The attachment of earnings order is only of help if the defendant is employed. Essentially the defendant’s employer is ordered to pay money regularly to pay off your debt.
The garnishee order requires someone who holds money for the Defendant e.g. a bank/building society, to pay your debt.
Under the Charging Order Act 1979, a charging order only comes into play when the person tries to sell his/her home or land and at that point the debt is paid to you. You can find out if somebody owns their own house by enquiring with the local Land Registry Office. All you need is an address.
Quite often you do not know the circumstances of the person from whom you are trying to recover the debt. You may know whether they are employed but it is unlikely whether you know they have got a house or money in the bank.
If you feel they have goods to seize then it may be an option to arrange for the issue of a warrant of execution but the goods that can be taken and where they can be taken from are limited.
Consider:
• Bailiffs do not have an initial right to enter someone’s home. They can enter an unlocked door or window if nobody is there.
• For a private person the bailiff can only take goods belonging to the person perhaps jointly but not a partner with whom they live.
• Bailiffs cannot take essential household items e.g. clothing, bedding.
• Bailiffs cannot take goods on finance.
• Bailiffs generally don’t take items that are not going to fetch much at auction.
If you are doubtful about what there is to seize then a useful option is to request an Oral Examination. This does not involve a dentist but for a fee you can request the Defendant be ordered to attend Court and give information about his/her assets.
It will give you a good idea, which would be the best option to choose. You may need the case to be transferred to the Defendants own court and an application will need to be made.
Oral examinations are usually carried out by an officer of the court. You can also ask questions. The Defendant has to confirm on oath that the information is correct. If the Defendant does not turn up they are usually given a second chance and you may be asked to pay towards the Defendants travelling expenses.
Providing this is paid, if the Defendant does not turn up a second time they may be arrested.
Once you have the information it will make it easier to decide on the next course of action to pull in the debt.
Forms for the various orders are available from the court and we can help with these if and when they are required.
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