If you've a consumer or business issue that you've been unable to resolve with informal discussions or negotiation, the next step is usually civil legal action.

As the Claimant in a claim it will cost you time and money to issue court proceedings and there are four 'tracks' which a claim can be allocated to depending on the complexity and value of the matter.

• £10,000 or less in value should be allocated to the Small Claims Track
• Over £10,000 up to £25,000 in value should be allocated to the Fast Track
• Over £25,000 in value should be allocated to the Intermediate Track or the Multi Track

The majority of disputes and subsequent claims fall into the Small Claims Track which is designed for use without the need of a solicitor. However, in reality the process can be complex with various procedures, dates and correspondence all to be complied with.

But before starting down the path of issuing a claim, you need to have an understanding of how much it may cost to take someone to the small claims court.

Being the Claimant, you will need to the pay fees to the County Court to start and run the claim. These Court Fees are payable at two key stages of the claim and are required in advance, so ensure you have these available prior to starting your claim.

Should your claim be successful, and a judgment be returned in your favour, all the Court Fees you have paid will be added to the amount the Defendant must pay you.

Small claim court fees and limits and can vary across the UK as well as with different types of claims (personal injury, housing disrepair etc). In this guide we'll be referring to the process in England and Wales for Money Claims.

While there is technically no minimum amount for a money claim, the lowest issue fee (the fee you pay to start the process) is £35.00. Therefore if the amount you are looking to recover is very small, you should consider if issuing a claim will be cost effective for you.
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The Issue Fee is required when you first submit your Claim Form to the court and start your claim.

A claim can be submitted with a paper claim form or via the Internet using the Money Claim Online service. Previously there was an issue fee discount for using the online service, however this discount was withdrawn in May 2021.

Still the benefit of submitting the claim online is that you won't have to print and post the documents, so your claim will be issued faster. You will however need to register for an online account and you cannot use this service if you don't know the exact amount you are claiming for or the defendants are outside England or Wales.

Regardless of which method you use to submit your claim, the Issue Fee will be based on the amount you are claiming or the amount that you are estimating the claim is worth.
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​Correct as at 15 March 2024, but please see EX50 for full details and latest fees.
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If using the online service this fee is payable by credit or debit card prior to submission. If you use a paper claim form, you will need to include a cheque or postal order for the correct fee.

If your claim isn't disputed or defended, then judgment will be awarded in your favour and no other court fees will be payable (known as judgment by default).​
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If the claim is defended, then the case will need to proceed to a small claim hearing unless an agreement or settlement is reached beforehand. The court will send both parties a proposed allocation to the small claims track along with a Directions Questionnaire.

The Directions Questionnaire will ask you details about your claim in preparation for a hearing, including the proposed track, court location, any expert evidence, witnesses and if there are hearing dates to avoid.

While claims are usually allocated to the track based on the amount that is being claimed, the judge can alter this based on other factors, such as the complexity of the matter.

Once both parties have submitted a Directions Questionnaire, this will lead to an order from the court confirming the track and giving a date for the hearing, exchange of evidence and a date for paying the hearing fee.

​As with the other small claims court fees, the hearing fee for a small claim hearing will be based on the amount being claimed:

Fees correct as at 15 March 2024, but please see EX50 for full details and latest information.
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The Directions Questionnaire will also ask if you agree to your claim being referred to the Small Claims Mediation Service. If both parties agree to this, then a mediation appointment will be organised by telephone and a mediator will attempt to reach a settlement over the course of an hour or so.

The HMCTS Small Claims Mediation Service is free of cost so should be seriously considered as an option. Also, mediation appointments will be available quicker than a court hearing and you won't incur the Hearing Fee if the claim is settled at mediation.

It is expected that mediation will become a compulsory step in the small claims process in the future. As it is seen as an opportunity to settle disputes quickly and free up court time.

If mediation fails, then the claim will proceed to a hearing and the Hearing Fee will become due.
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Depending on your dispute, you may require an expert to provide evidence to support your claim. You will need the court to grant permission to use an expert and if permission is granted you will then need to pay the expert to produce written evidence.

As with court fees, if using an expert has been approved and your claim is successful, the cost of the expert will be recovered from the defendant up to a maximum of £750.

If your claim is successful, as well as the court fees and approved expert costs, there may be other items you can claim and recover from the losing party.

• Interest on the amount owed
• Late payment compensation if the claim is for a commercial debt
• Travel expenses getting to/from the hearing
• Loss of earnings due to attending the hearing
• Legal representative's costs if you've instructed a solicitor to make the claim on your behalf

There are various rules and limits around what can be claimed so it is always a good idea to get legal advice before starting your claim. Without legal advice then there is a risk you could miss out on recovering costs that you are entitled to claim from the opposing party.

Ultimately it will be down the court to deicide what costs and rate of interest are awarded in a successful claim, with the Judge having a wide discretion.
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Although the small claims process is designed to be conducted without legal representation, many people still choose to use a solicitor and can recover some of these costs as part of their claim.
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The way legal representation costs for small claim are calculated is complex and relates to the claim amount, how the Claim Form is served and the number of Defendants. There are then further costs that can be claimed if judgment is entered which depends on the amount claimed and how the judgment was obtained.

​Correct as at 15 March 2024, but please see CPR Part 45 for full details and latest fees.
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Therefore, if you choose to use a solicitor for you small claim, you can typically expect to receive around £50 to £130 awarded towards your legal costs if your claim was successful.

The relatively low legal representative costs that are recoverable in the Small Claims Court is the reason you don't see 'no win no fee' funding being an option when dealing with small claims. So if you do decide to seek legal help with a claim, ensure you look for a law firm offering fixed fee small claims services.
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While you may not be able to recover all your legal costs as part of your claim, there are still some compelling reasons to consider instructing a solicitor for a small claim.

Firstly (and most importantly) a solicitor will be able to advise you on the law and your prospects of success. Spending money on issuing and attending a court hearing only to have no basis for a claim would be an expensive mistake.

Secondly a solicitor will be an expert on litigation and the court process, ensuring you comply with the relevant directions/deadlines and that your claim is comprehensive. If your claim is significant, missing out or even miscalculating an item such as your interest entitlement can prove costly.

Finally, even if your claim is successful and judgment is awarded in your favour you may still need to enforce that judgment. A lawyer can advise you on the most cost effective and productive enforcement methods that are available.

Taking a person or a business to the small claims court isn't free and not without risk. Knowing the potential costs along when fees will require paying is likely to influence your decision on if it is worthwhile process to undertake.

However, if your claim has merit and you can afford the court fees, then many of your small claims court costs will be awarded back to you should your claim be successful.

Most drivers have never heard of the Motor Insurers' Bureau (MIB), but if you have been involved in a road accident and there is a problem with your motor insurance policy, you may have received a letter from them with a claim against you.

By law you must have a valid insurance policy to drive on UK roads. While some drivers choose to deliberately avoid purchasing insurance, for others it can be more of an oversight.

Insurance policies can have complex terms and conditions which if not understood fully at the time of purchase can result in a policy holder not being covered for the use they require. But by far the most common oversight is simply not renewing or updating key details on an existing policy.

​While the reason for being uninsured may be a genuine mistake, it will have little impact on your legal options in the event of an accident and the MIBs involvement in a legal matter.​

The MIB is a non-profit organisation that steps in to provide compensation to victims of road traffic accidents when the at fault driver is uninsured, untraced, or has a foreign-registered vehicle.

They provide a safety net for these innocent victims by settling claims for personal injury, property damage and associated losses. Ultimately resulting in the claim being dealt with as if the at fault driver had the benefit of an insurer.

In 2023 the MIB assisted on approximately 30,000 incidents and paid out compensation of over £375 million, with both these figures being predicted to increase in the coming years.

While the MIB plays a crucial role in ensuring that victims receive compensation, it also has a responsibility to protect the interests of its contributing insurance companies. This means after a victim's claim has been dealt with, the MIB may then pursue monetary legal action against the uninsured individual if it believes they share some responsibility for the accident.
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The injured party (the Claimant) will have likely instructed solicitors to act on their behalf. The solicitors will have made enquiries on the parties involved in the accident and established their insurance position. If no valid insurance policy has been found, then they will refer the claim to the MIB.

Depending on the progress of the claim, you may have received a letter from the MIB advising you of their involvement or court proceedings from the claimant’s solicitor naming you as a Defendant along with the MIB.

If the MIB have written to you requesting information on the accident, you should provide them with the required details, your version of events and any physical evidence you have of the incident (collision damage photographs, dashcam footage etc.). The MIB will want to thoroughly investigate the incident to establish the facts and the potential liability (fault) position.

​While you may have been without insurance at the time of the collision, this does not automatically mean you were fully at fault for the accident. But likewise, if the accident was clearly your fault, then the MIB being aware of this may expedite the claim process and ultimately reduce the legal costs that are incurred as part of any compensation claim.
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In any court proceedings following an accident, it is likely that both you and the MIB would be named as Defendants. While you may think that this means you are both on the same side against the Claimant, the MIB has no obligation to advise you or act in your best interests.

Therefore, it is essential to act promptly to obtain your own legal advice and representation to respond to the claim. There will be tight deadlines to acknowledge the claim and submit your Defence. Failure to do this will likely result in the Claimant obtaining judgment (CCJ) against you.

A defendant personal injury solicitor will be able to advise you on your position, comply with the court proceedings and liaise with the MIB's solicitor on common issues where it is appropriate to do so.

While there is always the possibility that after the accident claim is concluded the MIB may make a separate claim to pursue you for the costs they have incurred. This should not prevent you from robustly defending the allegations and dealing with the accident claim.

In a best-case scenario, you may be successful in your defence resulting in the Motor Insurers' Bureau not having to pay out compensation to the claimant. However even if the claimant's claim is successful, in full or in part, your defence and compliance with the proceedings will likely reduce the costs incurred by the MIB and ultimately what you may be liable for.
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If you find yourself being claimed against as an uninsured driver, you still have the right to defend the claim and allegations yourself, regardless of the MIBs involvement.

While the MIB may eventually be responsible for paying any compensation awarded, simply ignoring the correspondence and any court proceedings is not advisable. As this will likely just increase the duration and costs of the claim.

Therefore, you should always seek legal assistance as soon as possible from your own experienced personal injury defence lawyer. By obtaining specialist advice, guidance and legal knowledge of the MIB uninsured drivers agreement, you can protect your position and ensure a fair outcome.

Late paying customers are usually the primary source of business cash flow problems. Research by Siemens Financial Services found that a typical UK SME spends an average of 130 hours a year chasing late payments and unpaid invoices often account for 14% of a small business' annual turnover.

How you manage late payers can have a huge impact on your business, so utilising your legal and statutory rights to claim interest and compensation will help mitigate the impact of late paying customers.

Usually you will have specified on your invoice, order or contract terms when payment should be made by. Often this is 14, 30 or 60 days from the date of the invoice or delivery of the goods or services.

If there is no payment period agreed, then legislation sets a default period of 30 days.

Therefore, in the absence of a set payment period you are able to class a payment as late 30 days after you delivered the goods or services, or 30 days after informing your customer of the debt (whichever is later).

All businesses have a statutory right to charge interest on any late payments. This is detailed in the Late Payment of Commercial Debts (Interest) Act 1998 (the Act) which creates a right to statutory interest in commercial contracts for the supply of goods and services.

Therefore, if you supply goods and services for business purposes and do not have a provision for claiming interest on overdue payments in your terms and conditions, you can rely on the above Act to claim both interest and compensation. In summary it allows a business to:

• Claim interest at 8% above the Bank of England base rate on outstanding invoice amounts
• Claim compensation of between £40.00 - £100.00 per invoice on any that are overdue
• Claim additional reasonable costs of collecting the debt if they are more than the above compensation amount (i.e. solicitor fees)

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The exact amount of compensation that can be claimed varies depending on the value of your invoice:

No, there is no requirement to inform your business customers at the time of the order or purchase that you will claim interest and compensation for late payments inline with the Act.

However if you do make customers aware that further charges will be incurred on overdue amounts, either on your invoices, statement of account or terms and conditions, it may serve to deter any late payments from occurring in the first place.

Business to Business transactions only
Importantly interest and compensation under the Act can only be claimed on commercial contracts (B2B) and not on consumer contracts (B2C).
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Undisputed debts only
If there is a genuine dispute as to whether the customer owes the invoice amount, then you will be unable to add further charges until the dispute has been resolved and the amount owed clarified. Therefore, it is always better to enter a dialogue with customers as early as possible as to why they are disputing the debt and haven't paid.

Consumer Credit and Security exclusions
There are a few types of contracts that are excluded in the Act (section 2), specifically Consumer Credit Agreements and contracts that function via a mortgage, pledge or other type of security.

Customer relations consideration
Whilst it is your legal right to charge compensation and interest on any overdue commercial debts, you may also want to consider the impact on future business with the customer. If you've had a good trading history with them up until recently, you may wish to contact them by telephone to make sure they are fully aware of the overdue debt before writing to them to advise of the interest and compensation additions.

Once a payment is overdue all you need to do to claim the interest and compensation is write to your customer detailing the:

• Invoice number/reference that is now overdue
• Late payment compensation which you are claiming on this invoice
• Daily rate of interest that will be accruing until payment is made
• Total amount currently owed
• Methods that payment can be made (bank transfer, credit card, cheque sent to your business address etc.)

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If you are a VAT registered business, note that VAT should not be added to the compensation charge.

​You may also be want to refer to the 'Late Payment of Commercial Debts (Interest) Act 1998' as the basis for your calculations in case your customer is unfamiliar with the entitlement.

Finally, keep a copy of the letter as it will provide useful evidence in the event you need to begin court action to recover the debt in the future.
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If the charges that have been added are the only reason for none payment, you may wish to take a commercial view on the debt.
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For example, if your unpaid invoice is £9,000 but your customer is refusing to pay the additional £70 late commercial payment compensation, you may wish to forgo the compensation entailment in favour of recovering the outstanding invoice amount quickly.

But if payment isn't forthcoming even after advising your customer of the accruing daily interest, then your next step is to start the process of pursuing the debt through the courts.

Legal Advice and Action
At this point it would be beneficial to contact a solicitor to advise on what debt recovery options are available to your business and the most cost effective way to recover the monies owed.

​This usually involves first sending the debtor a formal Letter Before Action which will again detail the amount owed, the interest and compensation due and inform that if payment is not forthcoming court proceedings will be issued without further notice. Interest will still continue to be charged during the court process as well as additional amounts being able to be claimed to contribute to your legal costs.

Whilst hopefully the combination of chasing, advising of interest accruement and a solicitor Letter Before Action will result in swift payment, you need to keep in mind that any court claim must be started within six years of the last date a payment was made or when the debt was acknowledged.