Limiting a financial claim

[Platypus]

If a customer owed MyCo say £10k, can I arbitrarily limit my claim to £5k in order that I could use the small claims court in the (very likely) event they don't pay?

You might think this sounds stupid (as in why write off £5k) but the contract under which the money is owed isn't that strong (my mistake) and I'm not confident would take the scrutiny that a "full" court hearing would give it. Therefore I might well lose my case and end up paying costs.

If I limit the claim to £5k I can use the small claims court and then if I lose my costs are very much less. I hear that the small claims court is more sympathetic in such cases anyway (i.e. taking the view that where an intention is clear, a person should not be able to avoid their debts by means of a technicality).

It's not for provision of IT services.

Anyone any experience of anything similar?

Can I just bill my customer £5k and state that I am limiting my claim?

[HeliCraig]

I believe you can claim for whatever you want.

If I was you, I would be a bit smart and actually invoice them twice, both for around £4,900 (remember to leave room for the stat interest to be added on!).

Send the first invoice, wait 30 days, send a "notice before" action letter for the first invoice, then issue proceedings.

Then send the second invoice. When the first case is all dealt with, assuming no "full and final settlement clause" then you can sue again for the second invoice.

I did something similar on behalf of a friend when looking for £12k's worth of bank charges back from Natwest. Both claims were defended, then paid, the 3rd (for the 2k + int) is now on hold pending the outcome of the test case(s).

HTH.

[Platypus]

Hi Craig,

thanks for the answer. I didn't think it was legal to split a claim into smaller amounts in order to get them heard in the small claims court?

[TheBigYinJames]

Hi Craig,

thanks for the answer. I didn't think it was legal to split a claim into smaller amounts in order to get them heard in the small claims court?

I think if they claim is divisible in any way (i.e. separate tax months, money for different jobs) you can divide it up. If you paid £20k for a car, you can't then just arbitrarily split it up. But if you paid £20k for 5 cars, you can. Same with the work.

[Dow Jones]

5k

I am not a legal expert, well no more than HC is (!), but let me tell you something:
Firstly, if you've summarised your claim to them, you can't go back and split it up (you are right on this one).
Secondly, if you 'downgrade' your claim to say 5k or under, there is every chance of this being 'fast-tracked' to High Court where you'll be facing not just solicitors' but barristers' costs for yourself and the otehr party. Whoever loses, pays both.
Thirdly, you've misunderstood the whole point of the Small Claims Court. This is meant to be used for claimants (usually individuals, occasionally small companies) that can put a claim without having to pay exorbitant solicitors' costs upfront. It's neither an 'easy' option as you suggest nor does it encourage 'trigger-happy' claimants. If your claim is not backed up by contract T & C, then you are no better off there. Having said that, and being myself in a similar situation, I wish you all the best in getting your money.

[Incognito]

Quite legitimate to split your claim. If the 10k is from 8 weeks work then do as someone advised and split it into 2 or 3 date periods, i.e. invoice A for 01/01/08 to 21/01/08. Then so on and so on. Word of warning though, don't start the next legal process before getting the first one through the courts, the court will join the claims if they're all similar.

[Platypus]

Quite legitimate to split your claim. If the 10k is from 8 weeks work then do as someone advised and split it into 2 or 3 date periods, i.e. invoice A for 01/01/08 to 21/01/08. Then so on and so on. Word of warning though, don't start the next legal process before getting the first one through the courts, the court will join the claims if they're all similar.

Thanks, but this is not the case in my case. It doesn't relate to X weeks' work.

[Platypus]

Secondly, if you 'downgrade' your claim to say 5k or under, there is every chance of this being 'fast-tracked' to High Court where you'll be facing not just solicitors' but barristers' costs for yourself and the other party. Whoever loses, pays both.

Thirdly, you've misunderstood the whole point of the Small Claims Court. This is meant to be used for claimants (usually individuals, occasionally small companies) that can put a claim without having to pay exorbitant solicitors' costs upfront. It's neither an 'easy' option as you suggest nor does it encourage 'trigger-happy' claimants. If your claim is not backed up by contract T & C, then you are no better off there. Having said that, and being myself in a similar situation, I wish you all the best in getting your money.

Can you explain how/why the case might be fast-tracked? Of course I want to avoid going to "big" court for fear of having costs awarded against me.

It's my understanding that the costs involved in going to small claims are less because you can't have the other side's solicitors costs awarded against you, except if you bring a vexatious action (which mine isn't). So I'm sure sure in what way you think I've mis-understood the SCC. Can you explain?

Thanks for your help / insight.

[Dow Jones]

Scc

Judges at County Court level normally deal with small cases that are more-or-less straightforward as they only have an hour or so to decide on the merits of each case, anything complicated or deemed 'above their station' can be fast-tracked to High Court level where it can be discussed and debated over days/weeks if need be. Hence even if your claim is for say £ 4900, it could easily go to High Court despite the £ 5k 'limit' if the judge thinks so.
It's entirely up to him/her, I'd say if you've got any grounds for suing and it's a large amount, speak to a solicitor, form-filling is the easy part, anyone can do it, the hard bit is getting someone to look up similar cases and argue that yours is a winner.