Choose your battles carefully

Richard Renouf says taking legal action when you feel you’ve been treated unfairly is your – and your customers’ – right.

But whether it’s the right thing to do is a different matter.

MAKING a court claim is really easy. Is that a good thing or a bad thing? For some time now, it’s been possible to start court proceedings online and to pay by card, so a potential claimant can do everything from their desk or armchair.

They don’t need to go to the court to pick up the forms anymore. A claim in the small claims track can be for up to £10,000 and the service is intended to be user-friendly so the use of lawyers is discouraged.
If someone’s claiming against you, it’s probably a bad thing. When it’s easy to start a claim, it’s more likely to happen. You have a job that goes wrong but you think the customer is being unreasonable and so you reject their complaint.

Then you find the customer is ‘going down the legal route’. It’s the other way around if you’re wanting to claim against someone; a customer who refuses to pay up, for example. You don’t have to take much time to issue a claim, so easy access to justice works in your favour.

Before any court claim starts, there should be a ‘letter before action’. This outlines what the would-be claimant feels is owed and why, and that if payment isn’t received with a certain time court action will begin. Without such a letter, a court may consider a claim is unreasonable and that more should have been done to avoid proceedings, so this could be reflected in the final outcome.

This obligation to resolve issues without court action continues throughout a claim. It’s now more likely than not a claim will go through the court mediation service before it proceeds through the courts. This means a trained mediator spends an hour (sometimes more) discussing the claim with one party then the other, going back and forth between them until a settlement is negotiated.

If this isn’t successful, the parties are still encouraged to look for a way to resolve their dispute at every stage in the court process. This has resulted in a large proportion of claims – up to 90% of small claims track cases - being settled without a court hearing.

To most people, however, the concerns aren’t about how easy it may be to issue a claim, but whether the courts are biased against the ‘big company’ or will allow the customer to pay the debt – if you’re successful – at 50p per month for umpteen years, or even whether the customer will pay anything at all.

There’s a ‘bias’ in the court system, but it’s not against big companies. It’s based on the presumption that a person or company will only pursue court action if they feel strongly that they have a claim. Once the claimant has outlined what this is, the court expects the defendant to prove the claimant is wrong, otherwise this presumption will result in the court finding for the claimant.

As most claims are by customers who have been stonewalled, or passed from one person to another without anyone taking ownership of their issues and helping the customer out, this is the reason for the belief big companies are disliked.

A customer who wishes to pay off a debt in small amounts over a long period of time will not find it as easy as they might think. In the civil courts anyone seeking to prolong payment, whether by asking to pay in instalments or simply asking for a longer time to pay, must show the judge this is necessary by declaring their income and outgoings and showing that they cannot reasonably pay within the usual period of 14 days that applies to most judgments. If they default, there are ways a debt can be enforced.
Issuing a claim is as simple as going online to www.moneyclaim.gov.uk. To begin your first claim you have to register, but the site provides all the guidance and information you need. However, it’s worth considering the possible costs before you do.

Financially, the issuing of a ‘small’ claim will cost between £25 for a claim of up to £300 and £410 for a claim of up to £10,000 (offline claims are more expensive – between £35 and £455 respectively). If the claim proceeds to a hearing, there are further charges of between £25 and £335 in the small claims track. These are the fees from July 2018 when a third charge, the allocation fee, was taken away.

However, this means that, for example, a claim for £5,000.01 or more would cost £745 in court fees. Then you may have additional costs to add to this as you prepare yourself for the hearing -such as photocopying, postage, and so on – and you will not be able to claim these back even if you are successful with your case.

Then there’s the hidden cost of your time. And that of anyone else involved. If you need witness statements or documents from your records which take time to prepare, this will not be recompensed.
The stress involved in pursuing or defending a claim should not be underestimated. Worry, pressure to meet deadlines while maintaining your other work, and going head-to-head in the court room are all demanding.

Finally, there’s the cost of the outcome. I don’t mean the award made to you or against you, but the cost of losing a customer. Winning this small battle may have much greater costs in the long-term and these are best considered before you have let things go too far.

Taking legal action when you feel you’ve been treated unfairly is your right, and that of your customers. Whether it’s the right thing to do is a different matter.
www.richard-renouf.com