Small Claims Actions

Debts
Whether you buy goods on credit, take a loan to purchase something, or simply run up an overdraft, it is all too easy to get into debt. If things go wrong and you cannot keep up repayments, you lay yourself open to a civil court action by the creditor for recovery of the money lent, and for interest and court expenses.

As consumers, we are always under pressure to buy goods on credit or to borrow to finance purchases. The law on the commercial provision of credit is strictly controlled, and the consumer is protected from exploitation. For example, if you are sold credit by a salesman who comes to your own house rather than at a shop where you have gone to purchase something, you are entitled to a cooling off period after signing the forms, within which you can change your mind about the purchase and get out of the contract without being bound to it and without penalty. If the supplier of credit charges you an inordinately high rate of interest, he may not be entitled to enforce the contract, as it would be an extortionate credit agreement.

Where a debt has been legitimately incurred a creditor has a considerable range of weapons to enforce repayment. He may freeze your bank accounts or lodge an inhibition that prevents your house being sold. These actions can be taken at the outset of the court case against you. If the court eventually awards the creditor a decree against you, he may then arrest your earnings in the hands of your employer, proceed to a warrant sale of some of the contents of your home, or even have you made bankrupt.

A court action and court decree are extreme measures for a creditor to take. As a debtor, you should try to head off such procedures if at all possible by negotiation. If you get into heavy debt, you should see a solicitor immediately for advice. You may be entitled to legal aid. Your solicitor may be able to negotiate an arrangement with your creditor, or with all your creditors in a multiple debt problem, to have the debts paid off over a period of time without the need for court action. If a court action has been raised already, your solicitor can help to try and get a time to pay order or time to pay direction imposed by the court. This will have the effect of allowing the repayment to be made over time without the creditor having the right to carry out enforcement measures such as arrestment or warrant sale.

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Small Claims Actions

If you have a legal dispute with someone, or if there is a financial claim in which you are involved, then you may find yourself as a party in a Small Claim Action in the Sheriff Court.

At the moment as long as the amount at issue is no more than seven hundred and fifty pounds, any litigation can only be dealt with under the small claims procedure, which is designed to be a simplified form of court action. The idea is that in small claims, the amount of time, money and effort spent on resolving the dispute should not become as enormous as it can in the ordinary civil courts, in which costs and expenses can run into thousands of pounds, often more than the sum being fought over. The government are consulting on proposals to increase the limit substantially.

In the small claims procedure, court expenses are severely limited. If you win your case, you will get no more than seventy five pounds of expenses, plus certain outlays you may have made, on top of the sum of money you are suing for. In other words, if you hire a lawyer to fight the case for you, his or her full bill will not fall on the losing party to pay. You may have to meet part of it from your own resources. However, if the sheriff presiding in the court thinks that your opponent has put up a ridiculous defence, or has acted improperly, full costs may exceptionally be awarded.

Remember, although you may be entitled to legal advice and assistance in getting preliminary help from a solicitor, civil legal aid is not available to pay for a lawyer to conduct the case in court.

If you wish to raise or defend a small claim, do see a solicitor first. If you are the pursuer, you must lodge the small claim form outlining the basis of your case at the sheriff court with the relevant warranting fee. A copy of the form must then be served on the defender, and if the defender wants to contest the case, both parties will come to the preliminary hearing fixed by the court. At that hearing, the sheriff tries to find from both parties what issues are to be resolved or proved, and should try to look into the case to see if the parties can be brought to a resolution of the matter there and then. If they cannot, a full hearing is fixed for a further date, and evidence of witnesses and any relevant documents will be brought to the attention of the court.

After the full hearing, the sheriff makes a judgment in favour of one party or another, together with an order in respect of interest and expenses. If the sheriff makes an error in law, the disappointed party can appeal.

Although the small claim system was designed to avoid the parties' need for legal representation, experience has shown that the party without a lawyer is often at a distinct disadvantage. See your solicitor first, if you are going to be involved in a small claim.

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