Before proceeding to court to chase a debt, consider the stress, length of time and cost involved. Mediation is usually a good avenue to explore possible settlements, but only if both parties are willing to meet halfway. If all attempts to compromise fail, what do you do?
You can represent your business yourself, as a litigant in person (LIP), but you need to understand the steps and where to get help if needed. For example, a paralegal can be a real asset if chasing a debt leads to the courts. A paralegal cannot ‘conduct litigation’ meaning that they cannot be an agent for you to receive service of documents or letters on your behalf, nor can they sign or file court documents on your behalf, but a paralegal can assist you in your role as a litigant in person (LIP) and complete forms and draft documents on your behalf (which you then sign and submit yourself).
First steps
You must comply with Civil Procedure Rules and this means that the other party (the potential defendant) must be sent a letter describing what the issues are and what is required to resolve them, and to give a date by which this needs to be done. Failing to comply with such resolution or timeline will mean that court action will be taken without further notice. This is known as the ‘pre-action protocol’.
If there is no response, or the matter has not been resolved to the satisfaction of the claimant, then proceedings can be commenced.
Size matters
Collecting a debt is one type of case that can be dealt with relatively simply if the debt is not more than £10,000, as this can be heard by a District Judge in chambers rather than in open court. However, anything with a higher claim or more complexity will be dealt with in open court.
A claim from is issued in triplicate: one copy is kept by the court, the other is given to the claimant and the third is sent to the Defendant with a response pack. This requires the defendant to respond within 14 days, either by producing a defence or by acknowledging receipt and stating that a defence will follow. Of course, the defendants may just decide to settle the case at this point, but if a defence is filed, then the ball starts rolling and the costs start to pile up.
At this point, the next stage is very much dependent on what type of case it is. The case will be allocated to a court ‘track’, and this will depend on the subject matter of the case itself.
Various tracks
There are three tracks. Essentially track allocation depends on the value and complexity of the case and the CPR overriding objective which relates to ‘representation’, ‘fairness’ and ‘proportionate cost’.
With more complex cases, there may even be a requirement to have a ‘costs budget’ hearing requiring the parties to assess the costs they may incur throughout the court proceedings, and this will include, lawyers’ costs for drafting and attendance at hearings, expert witness costs if required and permitted, and can include your own LIP costs in dealing with the matter personally, plus any incidental costs incurred. At such a hearing the judge will decide what may be fair in the circumstances and adjust the draft budget produced by both parties.
Thereafter, the court case will unfold according to the Direction Order of the court which gives precise dates and times when each stage has to be completed.
Know when more help is required
If you are dealing with a complex case, the question you need to ask yourself is whether you need to instruct a solicitor or a direct access barrister to assist. There are many areas where a paralegal practitioner can help you, but sometimes, you may have bitten off more than you can chew. A level of specialised expertise may well be required. Think about whether a barrister could be instructed directly. This may cut out a huge amount of cost, but the downside is, that as a LIP, you will be receiving all communications from the other side’s solicitors, and this could add extra stress to what is probably already a stressful situation.
By Amanda Hamilton, CEO, National Association of Licenced Paralegals (NALP)
ABOUT THE AUTHOR
Amanda Hamilton is Chief Executive of the National Association of Licenced Paralegals(NALP), a non-profit membership body and the only paralegal body that is recognised as an awarding organisation by Ofqual (the regulator of qualifications in England).
Web: http://www.nationalparalegals.co.uk
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