What steps should I take before claiming money at court?

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If an organisation or individual owes you money, there are a few steps you must take before you can claim at court. The court will expect you to have completed the ‘pre-action protocols’ before applying to court. Pre-action protocols refer to the initial steps you and the other party are required to take. The steps will require you and the other party to attempt to settle the dispute outside of court. The court will also require you complete the steps fully and properly providing as much information to the other party to facilitate a resolution outside of court. If you do not comply with the pre-action protocol, it can have a negative impact on your claim at court.

Exchange of information

Before making a claim at court, the court will expect that you and the other party have exchanged sufficient information with each other. Exchanging information with each other will allow you to understand each other’s position. It will allow you to communicate with the other party on the best way forward to resolve the dispute. Exchange of information allows you and the other party to resolve the issue without going to court or to consider alternative methods of dispute resolution. Resolving the dispute outside of court will reduce your costs. If the dispute is not resolved, exchanging information will enable you and the other party to narrow down the issues and will aid in the management of the proceedings if you do claim at court. 

You can initiate the exchange of information by sending the other person or organisation a pre-action letter. This should include:

  • Your name and address;
  • A summary of what happened;
  • What you expect the other party to do to resolve the situation;
  • What is the amount you want if you are expecting the other party to make a payment;
  • A deadline for the other party to send a reply; and 
  • That you intend to make a claim at court if the other person or organisation does not reply. 

Reasonable use of the pre-action protocol

The pre-action protocol must not be used tactically to negatively impact the other party. You and the other party cannot require each other to do anything that would be unreasonable and disproportionate. The pre-action protocol should only be used to identify, narrow and resolve the issues within the dispute.The costs that can arise when completing the pre-action protocol cannot be reimbursed as costs of the proceedings. You will be expected to give the other party a reasonable amount of time to respond. This will vary depending on the complexity within the case. If it is more complex, it will be appropriate to give a longer period of time for the other party to reply. 

The information exchanged must be proportionate to the dispute. You or the other party cannot require the other person to provide information that would not be relevant to resolve the dispute. If you or the other party do request more information, the court may consider that to be a disproportionate use of the pre-action protocol. This can have cost implications at the end of the proceedings.

Alternative methods of dispute resolution

Before starting the claim at court, you and the other party can discuss alternative methods of dispute resolution, such as mediation, early neutral evaluation, and arbitration, to try to resolve the dispute without going to court. Mediation is where a third party mediator will facilitate a discussion with you and the other party to attempt to come to an agreement. In early neutral evaluation, a third party expert will provide an informed opinion based on the information you provide them. You and the other party can use this information to come to a resolution.  Arbitration is where a third party arbitrator will decide on the case based on the information provided. If you and the other party did not attempt alternative dispute resolutions and you do not have reasonable evidence to show that alternative dispute resolution has been considered by both you and the other party, the court can order the party who did not cooperate with alternative dispute resolution to pay additional court costs. 

Non-compliance

The court may decide you or the other party have failed to comply with the pre-action protocols if you or the other party have:

  • Not provided each other with enough information to try to resolve the dispute outside of court;
  • Not acted within the time limit set out within the pre-action letter or within a reasonable period of time; or 
  • Refused to cooperate with alternative dispute resolution or refused alternative dispute resolution altogether.

Where there is non-compliance of the pre-action protocol, the court may stay the proceedings to require you and other party to comply with the pre-action protocol before continuing the proceedings. The court may decide to relieve you or the other party from the obligation to comply with the pre-action protocol. The court can also apply sanctions for failing to comply with the pre-action protocol which will mean that the party who did not comply will have cost implications at the proceedings. 

How Legal Utopia can help

You and the other party can use Legal Utopia to understand your legal positions and to access guidance on the procedure and process of money claims. Legal Utopia will also give you an insight into the court system and how a claim will progress at court. This will allow you and the other party to make an informed decision on the next steps and reduce friction in the court proceedings process.

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