Legal action should always be regarded as a last resort. By the time County Court proceedings are being considered, every reasonable opportunity to recover the debt without litigation should already have been exhausted.
From day one, every commercial debt recovery instruction received by NPD & Company (UK) Limited is managed in accordance with the Civil Procedure Rules (CPR). Our objective is simple: to resolve the matter without the need for Court proceedings wherever possible.
The Civil Procedure Rules govern all civil proceedings in England and Wales. They establish the procedures that parties are expected to follow before, during and after legal proceedings, promoting fairness, proportionality and the efficient resolution of disputes.
A fundamental objective of the Civil Procedure Rules is to encourage parties to exchange information and disclose the documents upon which they intend to rely. This enables each party to understand the other’s position, assess the strengths and weaknesses of the case and, wherever possible, resolve the dispute without asking the Court to intervene.
In practice, this process frequently achieves its objective. Once the relevant documentation has been exchanged, a debtor may recognise that the claim is well-founded and decide to pay. Equally, a claimant may conclude that the available evidence is insufficient to justify legal proceedings. In many cases, the parties reach a commercial settlement without the time, expense and uncertainty of litigation.
Only where the pre-legal process has failed to resolve the matter, and all other avenues have been exhausted, do we recommend that legal proceedings through the County Court be considered.
Drawing upon almost 40 years of commercial debt recovery experience, NPD has guided businesses through the County Court process for many years. Before legal proceedings are commenced, we explain the potential outcomes, the commercial implications of litigation and the procedure involved, enabling our clients to make an informed decision as to whether legal action is the appropriate course. Should they decide to proceed, we guide them through the entire County Court process, assisting with the preparation and electronic issue of claims through the County Court Online system and providing practical advice from the issue of the claim through to Judgment and, where necessary, enforcement.
Many commercial debt claims are relatively straightforward and can be progressed efficiently without the immediate involvement of a solicitor, helping clients avoid unnecessary legal costs whilst still pursuing recovery through the Courts.
However, we also recognise that not every case is straightforward. Where a claim raises complex legal issues, involves disputed points of law or requires specialist legal expertise, we work closely with experienced solicitors and will not hesitate to recommend that a matter be referred to them. Our priority is always to ensure that clients receive the most appropriate advice and representation for the circumstances of the case.
One of the most important principles of civil litigation is that the burden of proof rests with the claimant. It is for the claimant to satisfy the Court, on the balance of probabilities, that the debt is owed. It is not for the defendant to prove that it is not.
In reality, many small claims are far from perfectly documented. Businesses do not always operate with formal contracts, signed delivery notes or comprehensive records. County Court Judges are well accustomed to dealing with cases where the documentary evidence is incomplete or less than ideal. They will consider all of the available evidence, assess the credibility of the parties and decide, on the balance of probabilities, whether the claimant has proved the claim.
Once the decision has been made to commence legal proceedings, the claim is issued electronically through the County Court Online system.
The Court fee, any applicable statutory interest and any recoverable debt recovery charges are added to the total claim.
Many claims are resolved shortly after the Defendant receives the Claim Form. Some debtors pay the claim in full, together with the Court fee and costs. Others make an acceptable proposal of payment, with the proceedings remaining in place until the agreed payments have been completed.
There is always the possibility that the Defendant will file a Defence. Defended County Court claims are significantly more complex and fall outside the scope of this guide. We will examine defended claims, the litigation process and preparation for trial in a separate article.
Although some claims are defended, many are subsequently settled as the proceedings progress because the time, cost and uncertainty of litigation often encourage the parties to reach a commercial settlement. We have even acted in cases where a Defendant paid in full, including costs electronically on the steps of the Court on the morning of the hearing.
Once the Claim Form has been issued and served, the Defendant has a prescribed period within which to respond. If no response is received within that time, the claimant is entitled to request Judgment in Default.
A Default Judgment is entered because the Defendant has failed to respond to the proceedings, rather than because the Court has heard the evidence and determined the dispute.
Once Judgment has been entered, the debtor is expected to comply with the Court’s Order.
If the Judgment is settled immediately after it has been entered, the claimant can notify the Court online before the Judgment is published. In these circumstances, the Judgment will never become a matter of public record.
If the Judgment is not settled immediately, it is likely to be published and become a matter of public record. However, if it is paid within 30 days of the date it was entered, the claimant can notify the Court and the Judgment will be removed from the Register. In effect, it is expunged and will no longer appear as a registered County Court Judgment.
If the Judgment is paid more than 30 days after it was entered, the Court can still be notified that payment has been made. The Judgment will remain on the public Register for the remainder of the registration period, but it will be marked as Satisfied, confirming that the debt has been paid in full.
Once a Judgment has been obtained, we immediately notify the debtor and explain the commercial consequences of allowing a County Court Judgment to become a matter of public record.
This includes the potential impact upon the company’s creditworthiness, banking facilities, supplier relationships and future commercial credit assessments. Many debtors choose to settle the Judgment at this stage rather than allow those consequences to take effect.
Obtaining a County Court Judgment does not always bring the recovery process to an end. If the debtor still fails to pay, a number of enforcement options are available, each designed to recover the outstanding debt in different circumstances.
Selecting the most appropriate method of enforcement is often critical to a successful recovery. The various enforcement procedures available, together with their advantages, disadvantages and the circumstances in which they should be considered, are explained in our separate guide to Enforcing a County Court Judgment.
If your business has an outstanding commercial debt, regardless of the amount involved, contact NPD & Company for a free, confidential discussion. We will review the circumstances of your case, explain the recovery options available and recommend the most appropriate course of ac-tion.
Legal action through the County Court is only one of the recovery tools available and is always regarded as a last resort. In many cases, debts can be recovered without the need for Court pro-ceedings.
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The answer depends entirely upon timing. The first issue to consider is the exact date and time the County Court claim was issued compared with the exact date and time the debtor made payment. The County Court Online system records the precise date and time proceedings are issued, whilst electronic payments will usually provide their own date and time record. Establishing which occurred first will often determine the claimant's legal position.
If the debtor paid the principal debt before the County Court claim was issued, you should first establish whether that payment ought to have been identified before proceedings were commenced. The Court fee will normally not be recoverable, although statutory late payment interest and any reasonable debt recovery costs may still remain payable. The lesson is simple: always check for payment immediately before issuing a claim.
If the principal debt was paid after the County Court claim had been issued, the proceedings do not automatically come to an end. Provided the amounts claimed are correct, the Court fee, statutory late payment interest and any recoverable debt recovery costs remain payable. The claim continues, but the amount outstanding is reduced by the payment received.
