Debt Recovery: A Quick Guide to Money Claims

As summer draws to a close and accounts teams return to full speed, it is often at this time of year that clients start reviewing outstanding debts. This includes everything from unpaid invoices under £10,000 (which fall within the small claims track), to six and seven figure debts proceeding via the fast track, intermediate track, or multi-track.

Whether the sum is modest or significant, the key to a successful claim lies in the evidence. The golden rule remains: maintain a clear paper trail. Where the debt arises from unpaid invoices, you must be able to demonstrate the existence of a contract usually established by the classic elements: offer, acceptance, consideration, capacity, and an intention to create legal relations.

The Pre-Action Stage

The pre-action protocol for debt claims, part of the Civil Procedure Rules, applies where a business (including public bodies and sole traders) is seeking to recover a debt from an individual.

A compliant letter of claim should be sent to the debtor. For straightforward matters, a response should be requested within 14 days. In more complex cases, a longer period may be appropriate. The letter should clearly set out, but not limited to:

  • The nature of the debt
  • Any interest being claimed
  • Details of the underlying agreement
  • Payment instructions

The Court expects both parties to engage constructively and make genuine efforts to settle the matter. If settlement is offered, it should be properly considered, taking into account the amount in dispute and any relevant contractual provisions regarding costs.

Issuing the Claim

Once the pre-action stage is complete, the next step is to issue a claim. Money claims are issued under Part 7 of the Civil Procedure Rules. The County Court will formally issue the claim form, which is dated on the day of issue.

The particulars of claim may be served at the same time as the claim form, or within 14 days of service of the claim form. The relevant forms for:

  • Acknowledging service
  • Admitting the claim
  • Filing a defence

must also be served with the claim documents.

The claim form is deemed served on the second business day after it is delivered. However, the Court may authorise a different method or place for service, or in exceptional cases, dispense with service entirely.

What Happens Next

The defendant has 14 days to respond to the money claim. Where the particulars of claim are served separately, the 14-day time limit runs from the date of service of the particulars.

If no response is received, the claimant may apply for default judgment. Part 12 of the Civil Procedure Rules governs when and how a default judgment may be entered.

If you are considering recovering a debt or defending a claim, it is important to seek legal advice early to ensure compliance with the pre-action protocol and procedural rules and to give yourself the best chance of success.

For advice and assistance, please contact Arjun Mediratta in our Dispute Resolution team at Rooks Rider Solicitors.

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