Landlords, Tenants and Small Claims Proceedings

Introduction to Small Claims Proceedings

Small claims are civil (so not criminal, family, employment or immigration) legal claims, which are of low value or low complexity. The general rule is that if a claim is for less than £10,000 it will be a small claim. A very important aspect of small claims is that if the winning party has a lawyer acting for them the losing party will usually not be required to pay those lawyer’s fees.

The small claims process is designed so members of the public can bring or defend claims (a) without a lawyer and (b) without the prospect of paying the winners legal costs should they lose. If a party represents themselves they are known as a ‘litigant in person’.

The following guide is intended to give litigants in person the information they need to bring or defend a small claim. Some examples of claims that might be a small claim are given below. It is suggested that you read the whole guide whether you are bringing or defending a claim. It is predominantly based upon a claim for a specified sum of money such as rent arrears or the cost of repairs. All figures and links are correct as at 23rd November 2014.

As a landlord you might go to the Small Claims court when:

• be owed rent following a tenant vacating your property.

• have used the ‘accelerated possession procedure’ (a process designed for landlords to get a possession order quickly, click here for further details) but still want to pursue outstanding rent.

• seek an order of the court to allow a deduction from a deposit held in a tenancy deposit scheme.

As a tenant you might go to the Small Claims court when:

 

• you might want the landlord to repair the property (note - if the costs of the works are over £1,000 the claim will not be a small claim) or claim compensation for disrepair.

• your landlord might have failed to protect your deposit or failed to serve you with the ‘prescribed information’ (landlords are required by law to serve you with information about your deposit) or they might be refusing to pay some or all of it back to you (ss. 212 – 215 Housing Act 2004 sets out the law that applies to these claims).

Finally, there is a set of rules for claims called the Civil Procedure Rules (also known as The White Book or CPR). Where appropriate links to the CPR have been provided. Part 27 and the Practice Direction to Part 27 deal specifically with small claims.

Pre-action Protocols for Landlords

The pre-action stage is about exchange of information between the prospective parties in the hope that the dispute can be settled without the need to go to court.

Before a claim starts the prospective claimant is expected to follow certain steps called Pre-Action Protocols. There are specific Pre-Action Protocols for various types of claim, including disrepair claims. Where there is no specific Pre-Action Protocol the general Pre-Action Conduct principles should be followed.

Claimant (the word used for somebody who brings a claim)

In practice this means writing a letter to the prospective defendant setting out who you are, what you want and why you want it. You should include:

• Your name and address.

• The reasons why the defendant is liable (for example outstanding rent).

• A summary of the facts of the claim.

• An explanation of any amount of money claimed (for example a rent schedule or ledger).

• A suggestion to engage in ‘Alternative Dispute Resolution’ (there are many forms of ‘ADR’ such as mediation or tenancy deposit adjudication).

In the letter you should state a specific date by which you expect a response. It is advisable to make this at least 21 days after the date you post your letter, and explain that a failure to respond may result in proceedings being started.

If you are a business you should provide details of how the defendant can pay and your contact details, so the defendant can discuss repayment options. Also inform the defendant that free legal advice is available from organisations including National Debtline, Consumer Credit Counselling Service, Citizens Advice, and Community Legal Advice.

Practice point – limitation: Claims have a time limit on them. The normal time limit for the type of claim this guide is aimed at is 6 years. So if you are brining a claim for something that happened over 6 years ago you might be prevented from doing so by a piece of legislation called the Limitation Act 1980.  You may wish to consult a solicitor or barrister if you have any concerns.

Practice point – contractual costs: If the tenancy agreement includes a clause relating to the recovery of legal fees ensure that this clause is brought to the defendant’s attention in the letter.

Practice point – expert evidence: In the vast majority of small claims expert evidence will not be necessary. However, if you think your claim will require an expert you should state what kind of expert you think is needed, a surveyor for example, and suggest an expert to use (you can search the UK register of experts). Ask the defendant if they agree to the expert you suggest and if not whom they suggest.

Defendant (the word used for somebody who has a claim brought against them)

If you receive a pre-action letter do not ignore it. If you cannot provide a full reply by the date set out in the letter acknowledge the letter and ask for more time. In a full reply you should state whether you admit the whole, or some of the, claim or deny the claim and why. If you think you have your own claim against the claimant then you should state that you intend to ‘counterclaim’. Set out the details of your counterclaim in line with the guidance for claimants above.

Initiating proceedings if you are a Landlord

If you receive no response to your pre-action letter, the defendant indicates that they dispute the claim or Alternative Dispute Resolution fails then you should consider whether it is necessary to commence proceedings.

If your claim is for a specified sum of money, but not a protected deposit, and there are 1 or 2 defendants you may use the Money Claim Online Service (MCOL) www.moneyclaim.gov.uk.  It is not possible to cover the MCOL procedure in this guide but click here for further information and see the MCOL CPR Practice Direction.

If you cannot or choose not to use MCOL you must issue your claim at a county court. Strictly, to issue a claim you need only complete a claim form. However, in practice for your claim to get off the ground you will need:

• the claim form.

• the particulars of claim.

• supporting documentation.

The claim form to start a claim in the small claims court

For the vast majority of claims you should complete a Part 7 claim form (N1).

Each box on the claim form states the information that should be included. For small claims the value box should state: “the claimant expects to recover not more than £10,000”. (If your claim is over £10,000, or is a claim for housing disrepair over £1,000, then it is likely that it will not be a small claim and you may wish to seek assistance from a lawyer). The defendant’s address should be their last known address or, if a solicitor has indicated they will accept service for a defendant, the solicitor’s address.

*Important note – claims relating to tenancy deposits must be started using a Part 8 claim form (N208). You should also include a witness statement setting out your case. See the Witness statement section below for further guidance. You can find more information on Part 8 here.*

Particulars of claim for Landlords

The particulars of claim are where the claimant tells their side of the story. It should be a concise statement of the facts on which your claim is based. Separate the claim into numbered paragraphs and try to keep each fact or allegation to a separate paragraph. It is usual to set out the particulars of claim in chronological order.

The particulars of claim may be included in the claim form itself (there is a box on the second page) or may be a separate document. If you use a separate document then it should have the appropriate court heading and must be verified by a signed and dated statement of truth as follows: “I believe that the facts stated in these particulars of claim are true”.

Practice point – interest. If you wish to claim interest you must state this in your particulars of claim.

• You may have a contractual right to interest under a tenancy agreement; if so state the clause that gives you that right. State the rate of interest in the clause, the amount of interest already accrued and the continuing daily rate of interest.

• Otherwise you can claim interest under s.69 of the County Courts Act 1984, it is usual to claim interest at the rate of 8% although it is within the courts discretion to award interest at a different rate. State the amount of interest already accrued and the continuing daily rate of interest.

Practice point – contractual costs. You should state your right to contractual costs in your particulars of claim with reference to the clause in the agreement.

If you require assistance in completing a claim form or particulars of claim you may wish to consult a solicitor or public access barrister.

Supporting documentation Landlords should use in the County Court

It is good practice to attach highly relevant documents to your particulars of claim. Always make copies and do not send the original documents to the court or another party. In these types of claims the most important document is the tenancy agreement itself. If the claim is for rent arrears an up to date rent schedule or ledger should also be attached.

It is also useful at this stage to think about all the documents you may need. You do not have to attach them all to the particulars of claim; you will have an opportunity to send them to the court and other party later (see Disclosure below). Documents that might assist your claim or defence:

• Photographs (of damage or what requires repairing).

• Correspondence (letters, emails, text messages).

• Receipts for any expenditure you say was necessary because of the other party.

• A receipt for your deposit from your landlord.

• Professional reports or bills (for example pest control or surveyor).

• An inventory (paper, photograph or video).

• Check in and check out documents.

Issuing the claim in the Court

Take or send

• a copy for the court for the court

• a copy for each defendant

of all the above documents to your local county court or MCOL. Retain a copy for your records.

Pay the appropriate  county court fee:

For further information about fees in the county court (correct at 4th August 2014) see EX50.

Service – the claim form

Once a claim form is issued it must be served upon the defendant within 4 months. Service means sending a document to another party. The easiest way is to allow the court to do it for you using the copies you provided. The court will then send you a notice stating what date the claim form was served on the defendant, known as the deemed date of service.

You can serve the claim form personally by asking for the sealed copy from the court office after you issue the claim and:

• handing the claim form to the defendant in person.

• sending it to the defendant using any next day delivery service e.g. first class post, document exchange etc.

• leaving it at their last known address.

Part 6 of the CPR contains the rules relating to service:

There are complex rules about serving the claim form outside of England and Wales. If this is necessary it is suggested that you take advice from a lawyer.

Service – the particulars of claim

If they are short the particulars of claim will be contained in the claim form itself. However, if you have prepared separate particulars of claim these may be served with the claim form or up to 14 days afterwards. In practice unless there are limitation issues it is easiest to include the particulars of claim in or together with the claim form when the claim form is issued.

Responding to a claim in the County Court

The trigger for responding to a claim is receiving the particulars of claim. Most often in small claim cases they will be included in the claim form or served at the same time; however, if they are not you may need to wait up to 14 days for them to be served on you.

Once you have been served with the particulars of claim you may:

• File an acknowledgement of service.

• File and serve an admission.

• File and serve a defence.

• File and serve a defence and counterclaim.

Filing means sending the document to the court. There are strict time limits for responding to a claim and you must do one of the above within 14 days of the deemed date on which the particulars of claim are served on you.

If the particulars of claim were served by post or other delivery method then the deemed date of service is two business days after they were sent. Check the postmark or the delivery information. If they were left at your address or given to you in person before 4.30pm then the deemed date of service is the day that was done. If it was after 4.30pm then the deemed date of service is the next business day. For further information on deemed dates of service for the particulars of claim see CPR 6.26.

Which step to take in Court Proceedings?

The forms that you require to undertake any of the above steps should be included with the claim form when it is served upon you. This is called the response pack.

If you need more time to consider the claim against you then you should file the acknowledgement of service (N9), this extends the time for filing a defence to 28 days from the deemed date of service of the particulars of claim.

If you dispute the whole of the claim then you should file the defence and counterclaim form (N9B). The defence must address each and every allegation made in the particulars of claim and either admit or deny them. If you cannot do so because you do not have any knowledge about the fact or allegation then ask the claimant to prove the allegation in your defence.

If you admit the whole claim file the admission form (N9A). You can ask for time to pay or to pay in instalments on this form and should complete the financial information boxes on the second page.

If you admit some of the claim but dispute the rest you should file both the defence and counterclaim form and the admission form.

Finally, you may admit or dispute the claim but also believe you have a claim against the claimant, a counterclaim e.g. a tenant claims for disrepair but you have a claim against them for rent arrears. In this circumstance complete the defence and counterclaim form and set out your counterclaim in the appropriate space on page 2. You will have to pay a counterclaim fee based upon the value of your counterclaim (see the table in the Issuing the claim section). If the claim was issued through MCOL the reduced MCOL fee applies. If it was issued through the county court the county court fee applies.

If you require assistance responding to a claim you may wish to consult a solicitor or public access barrister. Remember the time limits and be conscious that it might take some time for an adviser to assist.

Practice point – extension of time. Perhaps you need to gather information or require assistance from a lawyer and need more time to file your defence. You can ask the claimant to agree an extension of up to an additional 28 days. If you do agree an extension you must inform the court in writing.

*Important note - claims relating to tenancy deposits follow the Part 8 procedure. Therefore if you are served with this type of claim different rules apply. You must file an acknowledgment of service (N210), within 14 days of the deemed date of service. If you dispute the claim you must also file and serve a witness statement setting out your defence to the claim. See the Witness statement section below for further guidance.*

Progression of the claim (claims not relating to tenancy deposits)

Defendant/ Tenant files an acknowledgment of service

Where the defendant files an acknowledgement of service the court will send a notice to the claimant informing them this has been done. This notice will contain a date by which the defendant must file and serve their defence. If that date passes and you have not been served with the defence you may request default judgment (see Default judgment below).

Defendant files a defence (and counterclaim)

Where the defendant either files and acknowledgment of service followed by a defence (and counterclaim) within the required time or files a defence (and counterclaim) without filing an acknowledgment of service the claim becomes a defended claim. The court will send a notice to the claimant informing them that the claim is now defended and the court will proceed to send directions questionnaires to both parties (see Directions questionnaires below).

Default judgment in Property Disputes

A default judgment is judgment on the claim and unless it is set aside then it is treated as though the claim had proceeded to a hearing and the claimant had won.

If the defendant does not file an acknowledgment of service within 14 days of the deemed date of service or files an acknowledgment of service but then does not file a defence within the required time a claimant may request default judgment using form N225.

Practice point – if you served the claim form personally you should file a certificate of service (N215), to prove that the claim form was served, before applying for default judgment.

If the claimant obtains a default judgment then the defendant can make an application to set it aside. This application is outside the scope of this guide but if this situation applies to you then you may find it useful to read the rules relating to such applications at Part 23 and Part 13 of the CPR or to consult a lawyer.

Directions questionnaires

If the claim is defended then the court will send directions questionnaires (N180) to both parties. The court will state the date that these must be returned to the court. You should ensure that you comply with this time limit. If you do not the court will often set a further date for compliance together with what is known as an ‘unless order’. Typically this will state that unless you comply by the second date your particulars of claim, defence or defence and counterclaim will be struck out.

Directions questionnaires contain several questions which assist the court in ascertaining the complexity of the case e.g. how many witnesses are involved, are the parties seeking to rely on expert evidence. Given the nature of this guide it is expected that the claims of those reading it will be relatively simple and be unlikely to last more than a few hours or at most 1 day.

If the claim is over £1,500 the claimant must pay a £40 allocation fee when returning the directions questionnaire.

Progression of the claim (claims relating to tenancy deposits)

If the claim is disputed then the defendant will serve a witness statement setting out their side of the story on the other parties. At this point you should be able to tell if there is a substantial dispute about the facts of the case e.g. landlord argues significant damage to property but tenant denies it. If so and the claim value is under £10,000 then you can agree yourselves that the claim should continue as a Part 7 claim and ask the court to allocate it to the small claims track. In the vast majority of claims this is a sensible way forward, particularly if neither party has lawyers acting for them. Although the court does not have to allocate it to the small claims track in practice they should listen to the parties and the claim should then proceed to a small claims hearing in line with the steps below.

Practice point – no acknowledgement of service. If the defendant does not file an acknowledgment of service in response to a Part 8 claim form then the court will list the matter for a hearing. The defendant will be allowed to attend but may not take part without the permission of the court.

Allocation

Unless there is a substantial dispute between the parties as to which track they think the claim should be allocated to this will normally be done without a hearing. The court will issue a proposed notice of allocation to both parties together with directions for how the claim will proceed.

Different courts have different standard directions and different directions may be given for different types of claims. It is essential that you read the directions. Make a note of:

• the dates that the court requires you to do something by.

• exactly what it is the court requires you to do.

Ensure you comply with the directions on time.

The directions will also state the time, date and venue for the hearing. The hearing will usually be at the defendant’s local county court. This may be a different court from the one in which the claim was issued so double check. The claimant has to pay a hearing fee by a certain date in the order, usually 7 or 14 days before the hearing. The fee depends on the value of the claim:

Disclosure

There will usually be a direction for disclosure of all documents on which you intend to rely. This will usually mean sending copies of the documents to the other party and the court by a specific date. However, check the wording of the order and ensure you follow the instructions. You may not be allowed to rely on a document that is not disclosed in accordance with the directions.

Witness statements

Every person, including the claimant or defendant, who will be a witness must provide a witness statement and these must be filed and served by the date set out in the directions. The witness statement should include all the evidence that the witness wishes to give to the court and must comply with Practice Direction 32. They should have the appropriate court heading, contain numbered paragraphs and the evidence should be in chronological order. Crucially, the witness statement must be verified by a signed and dated statement of truth: “I believe that the facts stated in this witness statement are true”.

The hearing

On the day of the hearing itself allow plenty of time to get to court and arrive at least half an hour before the start time in the order. If you are relying on documents that have been disclosed take the originals with you. On arrival check in with the usher so that the court knows you are there. The other party may have a lawyer or representative at court and you should speak with them before the hearing. It may be possible to agree some aspects of the claim before the hearing and this will assist the court.

The Judge and any lawyers at a small claims hearing will be wearing suits but not wigs or robes. It is advisable for litigants-in-person to dress smartly. The hearing will usually be held in the Judge’s chambers but occasionally the court may hold the hearing in an actual courtroom. You can check with the usher beforehand so it does not come as a surprise. Even if the hearing is in a courtroom it will still be fairly informal. You do not need to give your evidence on oath and usually all parties and witnesses remain seated while addressing the Judge, unless they prefer to stand.

A Deputy District Judge or District Judge will usually hear the claim. If they are male address them as ‘Sir’ if they are female as ‘Madam’ or ‘Ma’am’. Occasionally a Circuit Judge may hear a small claim; they should be addressed as ‘Your Honour’ unless they inform you otherwise.

In small claims the witness statements stand as that witness’s evidence and the other party is given an opportunity to cross-examine the witness. Where both parties are unrepresented the Judge will more than likely have their own questions which they will ask the witness.

After the Judge has heard/seen the evidence then they will hear from each party or representative. This is called a ‘closing speech’. This is the opportunity to point out specific answers that were given in evidence and draw the Judge to the evidence/documents that you say supports your case.

At all times in the hearing try to be concise and ensure you speak loudly and slowly because the Judge will take a note of what you say.

It is usual for the Judge to give judgment immediately after closing. They will set out the facts of the case and their reasons for the decision. The decision will set out who the Judge finds to be liable and what ‘remedy’ the court is granting, for example damages for outstanding rent or an order that the landlord complete the works that need doing. It is advisable to take as good a note as possible of the judgment. The Judge will then ask each party what they say about costs (see Costs).

Very occasionally the Judge may give a ‘reserved judgment’, this means they need more time to make a decision. Another hearing will be scheduled where they will ‘hand down’ the judgment (read it out) and then hear what the parties say about costs.

If you think the Judge has misunderstood or misapplied the law or has got something to do with the facts wrong you may consider appealing the decision. You should ask for permission to appeal from the Judge who has heard the claim. Appeals are outside the scope of this guide but further information can be found in CPR 52 or by consulting a lawyer.

Costs for Landlords in the County Court

CPR 27.14 is the rule that deals with costs on the small claims track. Usually the winning party can recover only:

1. Court fees e.g. the issue fee, hearing fee etc.

2. Witness expenses of travelling to and from court e.g. 45p in the mile plus parking.

3. Loss of earnings, capped at £90 (you should take evidence from your employer or your accounts to show how much you have lost).

4. Experts fees, capped at £750. In the event you have had to pay for an expert report and you win the court can award up to £750 to cover the cost of that report.

According to Rule 27.14(g) the court can award more than the above costs where the losing party has behaved unreasonably. There is no definition of unreasonable behaviour but some examples might include not complying with the pre-action guidance, not complying with the directions set down by the court or, at the extreme, fabricating evidence.  As stressed above this is why it is important to comply with the rules and directions of the court at each stage of the claim. If you are a litigant in person and the losing party has failed to comply causing you to spend time on the claim then you can ask the Judge to award you £18 per hour for the extra time you had to spend. Keep a detailed note if this applies.

Finally, if there is a costs recovery clause in the tenancy agreement you can argue that the court should award further costs. If you have paid a lawyer to draft your particulars of claim or witness statements you could ask for that specific cost to be paid by the losing party. There is case law for and against the proposition that a costs recovery clause allows costs above the normal small claims track costs. There is no guarantee that a Judge will grant you additional costs. If you have identified the clause from the pre-action stage then you will not lose anything by asking the Judge to apply it in your favour.

What happens next?

The Judge will make an order setting out who has won, how much the losing party has to pay the winning party and when they have to pay it by. Normally the losing party is ordered to pay the damages and costs awarded by 14 or 21 days after the hearing date. You can agree between yourselves if you will accept later payment or payment in instalments. It is sensible to have that agreement recorded in the court order. Similarly the Judge may grant a later date or instalment order after hearing from the losing party about their ability to pay. The order will also set out anything a party has to do e.g. carry out repairs, or not do e.g. not evict a tenant. The order will contain a date by which the party has to comply.

You will then have to wait and see if the losing party complies with the order of the court. If they do not then you may have to take enforcement action against them for example seeking a charging order to secure your damages or an attachment of earnings order where money is deducted from their wages each month and paid to you. This guide cannot go into all the methods of enforcement but further information can be found here. Alternatively, you may wish to consult a lawyer to assist you enforcing your judgment.

About the author

Edward Ross is a Barrister specialising in Landlord and Tenant Law. He is a member of 3PB Barristers and appears before courts and tribunals across England and Wales. He regularly represents landlords and tenants in claims relating to possession, unpaid rent, housing disrepair and tenancy deposit disputes. He is able to offer advice and representation on all aspects of Landlord and Tenant Law and Property Law. Edward is also Public Access licensed, so members of the public can go directly to him without having to involve a solicitor.

Disclaimer

The information contained in this guide is correct as at 24th November 2014. It may or may not reflect the most current legal developments. The guide does not constitute legal advice. It is not intended to create and does not create any lawyer-client relationship between the author and those using the guide. The author accepts no liability for the use or interpretation of this guide or for the quality or safety or the links provided herein. As legal advice should be tailored to a specific case this guide should not be used as a substitute for the advice of a competent legal professional.