UK County Courts

UK County Courts

UK County Courts help business entities recover debts that otherwise would have to be written off. Most business entities approach the UK county court only after exhausting all options. The law does take its own course, but UK County Courts try to make the life of businesses easier. The Late Payment of Commercial Debts (Interest) Act 1998, for instance, allows businesses to claim interest from the date the payment is due to the date of judgement.

Debt Recovery and UK County Courts

For many business entities, especially small ones, taking customers to a UK county court is a difficult decision. Small businesses do not want to antagonize customers, but neither do they have the financial strength to write off debts. Business entities also worry if the news of their legal action will scare away potential customers. In most cases, business entities succeed in reaching an out-of-court settlement, but in some cases may be forced to initiate legal action.

However, the business entities, before going to UK County Courts, need to think through a few issues. A majority of business claims in the UK County Courts relate to the payment of money for work executed or goods delivered. Business entities have to think about is whether their claim will be disputed or not. If the facts of the case are clear then business entities can proceed to other issues. If this is not the case, business entities need to honestly evaluate their own case and if necessary, seek legal advice.

If business entities believe that they have a strong case, then they should see if the customer has the means to pay the debt. The financial status of the customer often creates problems in enforcing the claim. Business entities also need to ascertain if other county court judgements have been issued against the customer. Business entities also need to think about the time and expenditure involved in making a claim. The court fees and lawyer fees are also important issues.

If the claim is not disputed, then the business entity can file a claim in the nearest county court or online at www.moneyclaim.gov.uk and obtain a judgement. If the customer pays up, then business entities will be saved the trouble of enforcing the judgement.

If the claim is disputed then the business entities need to fill an allocation questionnaire. On the basis of the claim amount, the UK County Court assigns the case to any one of the following tracks:

• The small claims track (<£5 000)
• The fast track (>£5 000<£15 000)
• Multi-track (>£15 000)

The complicated claims are usually allotted to the multi-track. The process of handling claims varies from the track to track for the UK County Court.

Typically, most customers pay up after the judgement goes against them. In cases where the customer would not pay, business entities have to initiate enforcement proceedings. If the individual customer cannot pay, then business entities need to think seriously about launching enforcement proceedings. In case of corporate customers who cannot pay, the business entity might be forced to launch winding up proceedings, which is a time-consuming process.

Certainly, UK County Courts offer business entities a way of recovering debts. However, business entities need to think about several issues before approaching UK County Courts. By all accounts, business entities can avoid going to the UK County Courts in the first place by thinking twice before extending credit. Now credit reference agencies and other outfits provide business entities with information for assessing the credit worthiness of customers. With credit history of customers a click way, business entities have the opportunity to minimise litigation.