Your client isn’t paying you. You’ve exhausted all options and feel like small claims court is your last resort. But before you go ahead there’s a lot to consider. Not just the practical element of how the process works, but whether the value of the invoice is worth the strain on your energy.
We’ll break down what the process looks like so you’re prepared for what lies ahead. We’ll also hear from freelancers who went through small claims court themselves, and whether they felt it was worth their time.
The basics of small claims court
The value of the invoice must be under £10,000.
There needs to be evidence behind your claim. This is why contracts are valuable. Lots of freelancers work on the basis of trust, but if your payment terms come into dispute a contract can strengthen your case by showing you’ve adhered to the terms of the agreement and are owed payment.
Whilst the claim will proceed in your local county, your client can request the matter is transferred to a court closer to them. It’s not uncommon for the case to be transferred to the defendant’s local court so take this into consideration when making your decision.
There is a formal process with chasing late payments prior to filing a claim. The legal expenses product can assist with this by giving you access to the late payment templates you’re required to send, or you can utilise the legal advice helpline for guidance.
Even if you win your case, there is no guarantee your client will pay you. You win the legal entitlement to the money, but this does not always mean you’ll get your money. With Jack customer, Chris Wilson, learned this the hard way. He said the positive feeling from winning was short lived once he knew there’s still the process of getting the money.
It’s worth doing due diligence on a client before you begin working with them to highlight potential red flags (hey, that’s something we can help with!), but even before filing your claim you should check for any indication they’re liquidating. Sadly there’s little point in going through the small claims process if there is no money to recover, unless the moral victory is important to you.
Starting the process
You’ve followed the late payment steps and have sent the letter before action. Now it’s time to start the process, which you can begin online at Money Claim Online.
As challenging as it is when setting out your case, it’s important to avoid letting emotion take over. The court isn’t interested in how your client has made you feel. They’ll be looking at facts like what date the contract began, how it was broken and what you’re owed.
Avoid name calling and lengthy backstories. Instead stick to the facts and provide sufficient evidence. At this stage you don’t need to give a full audit trail of evidence like emails between you and your client. This can be provided later if your case goes to a hearing.
In terms of cost, you can get a breakdown of court fees from here. The fee is based on the amount you’re claiming, plus any interest.
Over to your client
Once your client has received the particulars of your claim they have 14 days to respond with one of three options:
- Defend the claim (a copy of their defence will be sent to you)
- Admit all or part of the claim (they’ll notify you what they’re willing to pay)
- Make a counter claim (for example, a refusal to pay because you haven’t adhered to the terms of the agreement)
If your client defends the claim you’ll receive a Directions Questionnaire, payable by you at a fee of £40. This will determine how complex the claim is and also provides the option to arrange mediation.
Mediation introduces an impartial third party to help you and your client talk through the issue and come to an agreeable solution, prior to any legal action being taken. If there is no solution or the parties choose not to arrange mediation, you’ll proceed to a court hearing where you’ll be expected to pay a hearing fee.
Being accommodating with the mediation process reflects better on you should your case go to a hearing. It shows you’ve attempted alternate forms of dispute resolution.
If your claim progresses to a court hearing
You must prepare relevant documents relating to the case to bring to the hearing. This could be the contract, invoice and any email communication between your client and you that’s considered evidence. This is why it’s so important to have an audit trail for all client projects.
All of this might sound scary but small claims court is an informal process. The court hearing will focus on the point of dispute. Once again it’s important to remove emotion and approach things logically, sticking to the facts and evidence. This is an opportunity for the judge to listen to all parties, which will lead to a decision in the form of an order.
If the decision is in your favour the order will state how much money should be paid to you. This will now be on your client’s record as a CCJ and could possibly affect their credit rating.
Fees you can expect to pay
We’ve covered what fees you can expect to pay throughout this blog post. These include paying a:
- Court fee
- Directions Questionnaire fee
- Final hearing fee
- Sheriff officer (only if they attend the client’s address for recovery of payment)
Using your insurance
Small claims court can be a confusing and scary process for freelancers. If you have legal expenses insurance you can rely on the legal advice helpline to guide you through it. This is a service Chris wishes he had when he was preparing for his hearing.
“The hardest thing was knowing if I was doing things right, the order to do it in, the next steps etc. I was fumbling around guessing my way through it all. Had there been a resource which made the whole process easy to understand and navigate prior to engaging in the claim it would have been a lot less stressful. As the amount wasn’t huge I couldn’t justify appointing a lawyer to do it all for me or to get advice.”
Is it worth it?
This is a personal decision as well as a business one. Only you know how much bandwidth you can give to chasing late payments, or how important the invoice is to your cashflow.
I do feel that the more we stand up to difficult clients, the likelier they are to think twice about taking advantage of freelancers in the future. The more we collectively stand up to bad clients, the better we’ll be treated in the long-term. A client with a history of CCJs might be enough to deter another freelancer from working with them. With that said, there are other factors to consider.
Is there any money to recover?
This can be a drawn out process, with it taking months to go to a hearing. One freelancer we spoke to described the process as “draining”. Are you prepared for that?
Is this purely about the principal, or is your business dependent on that money being paid?
Could your time be better spent elsewhere?
Are you equipped to cover the small claims fees with the possibility of not recouping the cost?
Can you take time off work to attend a hearing?
Parting words from a freelancer that’s lived the experience
Chris recommends trying to reason with the client first, only committing to pursuing legally as a last option. Is there a way it can be worked out without court? Is a payment plan an option?
Have some things in place to protect you before you start work like a contract and terms. Always get a percentage of the payment upfront that covers your time.
And lastly, “if you’ve exhausted all other avenues and you have no other choice, I’d weigh up whether the monetary value is worth the mental anguish of going through proceedings—especially when you aren’t guaranteed you’ll win your case”.
