Is the Small Claims Court any use?

Madd Finn

I am a firm believer in the adage that the first rule of courts is "Stay the hell out of them!"

So I do not welcome the prospect of having to engage with one. But I have been left waiting for payment by a supposedly reputable small company (or SME) and am now in dispute with them about whether I should be paid at all.

The details should not concern anyone but suffice it to say I think I have a pretty strong case and have been considering taking them to the small claims court if they continue to stonewall me. The sum in question is small: in three figures.

However several people whose advice I have asked have said that even if I win a judgement against them I still have little chance of being paid. They can continue to ignore me.

Having said which, none of these people have personal experience of the small claims court. It just seems to be a commonly held belief that a ruling there is not worth the sound of the gavel when it comes to enforcement.

Is it worthwhile taking a claim to the small claims court at all? What happens if I win the case and the defendant still doesn't pay up?

Any actual experiences people have had would be helpful.

Thanks

dermot_sheehan

You can enforce it the same way as any District Court decree:
1. It can be sent to the sheriff for the County where the debtor resides to levy execution on their goods.

2. It can be registered as a judgement mortgage against any property they own.

3. It can be registered in the High Court central office and it will show in stubs gazette and impact their credit rating.

4. If it's for more then €1,904 a petition could (theoretically) be brought in the High Court to wind them up.

The problem for most litigants under the small claims rules in the District Court is while the system helps them get judgement, enforcement can be difficult.

Sending the decree to the sheriff (No. 1) to levy execution is straightforward though sheriff's fees (of around €20-30 I think) have to be paid.

Registering it as a judgement in the central office (No. 3) is also straightforward by filling a form with the decree and stamp duty of a few euro has to be paid also.

Registering a judgement mortgage is more complex (No. 2), an affidavit has to be sworn and certified by the District Court office which described the property owned by the company exactly (if its registered land it can give the folio number). This then has to be filled in the Registry of Deeds if unregistered land or Land registry if registered land. A few of around €100 has to be paid to register it in the Land Registry.

If the company still doesn't pay the debt and the land has to be sold by the court to pay the judgement mortgage, this must be done by issuing seperate proceedings in the Circuit Court or High Court and would be beyond the reach of most users of the small claims court.

It will almost never be cost effective to liquidate a company for a District Court debt though a creditor can threaten it by sending a demand letter if the debt is more than €1,904. A petition has to be brought in the High Court if the threat is followed through on and the company is sought to be liquidated. Given that the district court small claims rules are limited to claims of less than €2,000 it's only a tiny minority of cases that would be eligible and in nearly all of the expense of liquidating the company would greatly exceed the debt.

In a synopsis, enforcing judgement can sometimes be more expensive then obtaining judgement in the District Court and more complex for a lay litigant which is why some people say the judgement isn't worth the paper its written on. If the property owns lots of goods or is concerned about its credit rating, options No. 1 and No. 3 are straightforward enough and can be effective.

Madd Finn

Thanks.

Obviously option 1 (hope the feckers pay up) remains the preferred one. But failing that, the registration in the High Court ploy you mentioned looks fiendishly promising!



Much appreciated.

Milk & Honey

The Small Claims court does not deal with debt cases. You are looking at a District Court procedure.

Madd Finn

Milk & Honey wrote: »

The Small Claims court does not deal with debt cases. You are looking at a District Court procedure.

Hmm. It's not really a debt. The company's contention appears to be that they don't owe me anything because they dispute that I provided them with the service I'm demanding a fee for.

I think I can prove very easily that I did.

This could be one of those grey areas. But sure isn't that what courts are for?

Kosseegan

Madd Finn wrote: »

Hmm. It's not really a debt. The company's contention appears to be that they don't owe me anything because they dispute that I provided them with the service I'm demanding a fee for.

I think I can prove very easily that I did.

This could be one of those grey areas. But sure isn't that what courts are for?

It is really a debt. You say you are owed money, they say you are not. That is exactly what the courts are for. It is just that the Small Claims Court does not deal with debt cases. It is District Court proceedings you need to contemplate.

dermot_sheehan

Small claims rules have been modified to permit debt recovery by businesses:
http://www.irishstatutebook.ie/2009/en/si/0519.html

Kosseegan

No it hasnt.
From the middle of that SI
business small claim” means a civil proceeding instituted under this Order by a business purchaser against a business vendor in relation to a contract in respect of any goods or service purchased, but excluding any claim—


(a) arising from an agreement to which the Consumer Credit Act 1995 applies), or


(b) arising from an alleged breach of a leasing agreement, or


(c) for debt or liquidated damages,



See (c) above. All that happened was that business consumers could claim for defective goods and services supplied to them in the course of business.

dermot_sheehan

My mistake.

JD Dublin

I am taking some customers to court for non-payment of bills. I supplied them with services and either never got paid or only got paid part of the bill at the time. Can anyone tell me the procedure I need to go through to take them to court and get judgement against them?

In all cases they are individuals, not companies, and in all cases the bills are less than 2,000 ( but there are several customers. ). Reason I am doing it now is that I want to be a secured creditor when the new bankruptcy arrangements come in to place. I supplied them with services, and both they and I run businesses.

I cant afford to pay solicitors to do this work, as naturally they want to be paid upfront when they dont know whether I'll be paid at the end of the process.

Kosseegan

The procedure is set out here.

http://www.courts.ie/rules.nsf/DistrictRules?OpenView&Start=1&Count=30&Expand=3#3

Procrastastudy

Just for the enforcement lark...

I've personally had them turn up and tell me we're going to take stuff unless you pay so I think they are fairly effective in the collections department.

JD Dublin

Thanks for that, very useful Kosseegan. I will post here when I get some way along the process of taking these people to court.

I am sending out 'final' warning letters today, so I foresee we will start proceedings on 1st March 2012 against those people that still refuse to pay .

jblack

JD Dublin wrote: »

In all cases they are individuals, not companies, and in all cases the bills are less than 2,000 ( but there are several customers. ). Reason I am doing it now is that I want to be a secured creditor when the new bankruptcy arrangements come in to place.

Why would you be a secured creditor?

JD Dublin

jblack wrote: »

Why would you be a secured creditor?

Because the net effect of getting a judgement against someone is that under the new insolvency bill, you will then be a secured creditor and harder to ignore than a non-secured creditor.