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06th July 2008

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Litigation - Getting started

Is the debt disputed?
  If the amount or existence of the debt is in question a claim should be issued in the county court. The amount in question will determine to which track it will be allocated.   Subject to the amount (see below). If (a) the creditor is contemplating bankruptcy or winding up and (b) the debtor has assets, it is possible to issue a statutory demand. Not strictly a method of debt recovery but may result in payment.  
How much is owed?

It is generally not worth instructing us, given that our costs are likely to outweigh any damages recovered. Costs are only awarded in exceptional circumstances.

Procedure
The pre-hearing directions issued by the court will be standard and usually involve minimal pretrial preparation. We advise the client to act as a litigant in person.
(HMCS information on procedure)

Because there is the potential to recover costs from the opponent (if judgment is obtained against them) we advise that the debtor instructs us to act on their behalf.

If the time needed and evidence required renders a claim suitable, the Court will allocate it to this track. Standard directions will be issued and a hearing set usually within 30 weeks. Hearing costs are fixed but other costs will be assessed by the court.

A variety of cases can be dealt with within this track and case management of such claims is more detailed. Standard directions are unlikely to be suitable and the court will provide directions specific to the nature of the claim. Leading up to the final hearing it is likely that a case management conference will be held to determine the directions to be issued which will set out the timetable for the claim.

A creditor may only serve a statutory demand for a debt over £750. If the debt is less, then a claim should be made in the small claims track at the county court.
(HMCS information on procedure)

£750 or more?

£750 or more? Here a statutory demand can be served on the debtor. (See above)
(Insolvency Service advice & procedures)