Guide to the Early Stages of a Debt Recovery Claim
If you do decide to start a debt recovery claim, you will need to follow a series of steps.
The first stage in the debt recovery claim process is to deliver to the court a Claim Form and a Particulars of Claim along with the court fee.
A Claim Form is a general document which includes information about the parties and briefly describes what the claim is about.
The Particulars of Claim is a more formal document which should be prepared by a legal professional. In straightforward cases you can use the reverse of the Claim Form, but if the case is overly complex or lengthy, you may need to prepare a separate document entirely.
The Court will request that 3 copies of the Claim Form and Particulars of Claim are provided. This is so that a copy can be issued to the Claimant, the Court and the Defendant. If there are multiple Claimants or Defendants then additional copies will need to be distributed to all involved parties. Court fees will need to be paid but these will depend on the value of the claim.
When it comes to dealing with the debt recovery claim, a claim less than £25,000 is usually processed through the County Court. A claim in excess of £25,000 will be dealt with at the High Court.
Issue and Service
Once the Claim Form and Particulars of Claim have been drafted, they must be sent to the court who will receive and ‘stamp’ the documents. When the documents are stamped, this means that they have been issued. Usually the court will serve the Claim Form and Particulars of Claim on the Defendant.
The documents can be served on the Defendant by the Claimant or the Court. If served by the Court they will be sent by first class post along with a Defendant Response Pack.
This will explain what steps the Defendant needs to take and what forms they will have to complete.
Notice of Issue
If the Court serves the documents on the Defendant, they will provide what is known as a Notice of Issue to the Claimant. This document will confirm to the Claimant that the Particulars of Claim and Claim Form have been issued and served on the Defendant. The Notice of Issue will include the date that the documents were sent and the date that service was affected. When the documents are served by post, deemed service is usually the second business day after the documents were posted.
Response from the Defendant
Once received, the Defendant will have a number of options in reply to the claim. They must file their response within 14 days of the deemed service date and their response can be any one of the following:
Sometimes a Defendant will not dispute the claim. Where this is the case, they will complete and return to the Court the Admission Form which is included within the Response Pack. Where an Admission is filed, the Claimant can request that the Court enters a judgement against the Defendant. When the Defendant completes an Admission, they can request time to pay the amount being claimed. If the Defendant requests time to pay it should clearly outline the details of its income and outgoings within the Admission document and identify what they can pay and when.
Once filed, the Court will then send a copy of the Admission form to the Claimant and ask whether request made by the Defendant is acceptable. If not, the Claimant must write to the court and explain why. The Judge will then decide how much the Defendant will pay and by when. There may be occasions when the Claimant and Defendant will be invited to a hearing at the Court and make representations about the timescale for payment and what should be paid.
The Defendant may dispute the claim in its entirety and if they do they must send to the Court and Claimant their Defence. This will outline, in detail why they dispute the claim.
An Acknowledgement of Service
When the Defendant issues an Acknowledgement of Service, this is an indication to the Court that they intend to prepare a defence and defend the claim. When completing an Acknowledgement of Service, the Defendant must state whether they wish to dispute the entire claim or part of it. A Defendant may also dispute the Jurisdiction of the Court.
If a Defendant files an Acknowledgement of Service, they will have a further 14 days to prepare and file their Defence with the Court. Sometimes, the Defendant may request additional time in which do file their Defence. In this case, they must request an extension from the Claimant and explain why an extension is required. If the Claimant refuses to grant the extension, the Defendant can apply to the Court.
The Court will not look favourably on a Claimant who refuses to grant an extension, particularly if the amount of time requested was reasonable. They may also instruct that the Claimant meets the costs of the Defendant seeking an Order.
Failure to Respond
In a situation where the Defendant fails to respond the Claimant is able to file a request for what is known as a Judgement in Default with the Court. There is a standard document which the Claimant can complete in this instance. The Court will normally issue a Judgement against the Defendant when a request is received.
Depending on the outcome of serving the Particulars of Claim, the Court will set the timescales for what happens next, particularly if the claim is defended completely.
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This article was written by a member of the Expert Answers legal advice team and posted by Expert Answers admin. Expert Answers provides online legal advice on all aspects of UK Law to users in the United Kingdom.