Debt Collection and Litigation Services

Disputed Debt and Litigation Services

A debt may be disputed because the customer or client who owes you the money believes there is a legitimate reason, such as a breach of contract, not to pay you.

The first step would be to send a demand letter and give the debtor a period of time to pay the debt, failing which legal action will be taken. Although court legal action can be taken immediately, the claimant may not be entitled to recover its legal costs and fees if the court holds that the claim could have been resolved without court action.

There are two types of civil courts in England and Wales. There is the High Court and there are the County Courts. The High Court is located in London, but has District Registries across England and Wales. The County Courts are located in most major cities. Both of these courts have similar jurisdiction in civil claims, although proceedings may only be started in the High Court if the value of the claim is more than £100,000.

For small claims, which is a claim of under £10,000, it usually takes around 30 weeks from initiating court proceedings for the matter to be tried at court (known as the trial). For claims of over £10,000 it takes at least 12 months from issuing the court claim to reach trial.

If the debtor is not resident in England and Wales, the creditor must obtain permission of the court to serve the court claim outside of the jurisdiction of England and Wales.

The limitation period for debt claims is typically six years from the date when the debt was incurred or the date of the last payment, whichever is the latter.

The general procedure from commencing the lawsuit to obtaining judgement is:

The debtor (in court proceedings known as “the Defendant”) is served with the claim form and supporting documents, giving the Defendant 14 days to indicate an intent to defend the claim
If the Defendant intends to defend the claim, they must serve their full defence within 14 days of giving notice that it intends to defend the claim
If the Defendant does not serve the defence, the Claimant (heretofore called “the Creditor”) can apply for default judgement against the Defendant
If the Claimant believes the defence has no chance of success, the Claimant can make an application to the court for summary judgement against the Defendant
If the defence has a chance of success, then the procedure continues as follows:
the Claimant has an opportunity to file a reply to the defence
A Case Management Conference is held at the Court by a judge who gives directions for the conduct of the case. This includes orders regarding the disclosure of documents, the exchange of witness evidence in the form of witness statements and setting the case down for a trial.

An application to the court can be made at any time during the proceedings for a freezing order, if it can be shown that there is a real risk that the Defendant will dissipate assets to deprive the Claimant of the fruits of a victorious judgement.

Foreign Claimants, that is claimants who are based outside the UK, may be required to give the Defendant security for the costs. This is to cover the Defendant’s legal fees in the event that the Claimant does not succeed at the trial.

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law@andrewtobias.co.uk

020 7935 8399

Disputed Debt and Litigation Services

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