Have you got money owed to you? Then make a claim to get it back

Being owed money is frustrating, whether it’s for something that was ordered and not delivered, damage that’s been caused or even perhaps for an injury. For many people, sending a few letters demanding payment is about as far as they go.

When someone says “So, sue me” most of us think of costly lawyers, worrying court appearances and the risk that, at the end of it all, we might lose our claim anyway.

But it doesn’t have to be like that. Courts in the UK already have a simplified procedure for what’s known as ‘small claims’ and, thanks to a Government website called Moneyclaim Online, it’s now possible for people in England and Wales to lodge a claim for monies owed without even leaving home.

In this article, we’re going to explain all you need to know about using it.

Small claims, small effort
It would be great if everything in life always went according to plan – things that are ordered online always turn up on time and in good condition, nothing ever breaks down, and people who are paid to do a job always finish it perfectly and promptly.

Real life, however, isn’t always like that and, though thankfully the times when things go completely wrong are rare, it can be frustrating to end up left out of pocket because of someone else.

While we would always advise people to try a conciliatory approach to problems – it seldom helps to rush in, all guns blazing – sometimes, a stalemate is unavoidable and the only answer seems to be “See you in court”.

Many people would actually give up at this point, even if they believe they’re in the right. However, the small claims system in England and Wales is designed to make it easy for people to resolve disputes of up to £5,000, without all the pomp, ceremony and costs of a full court hearing; it often just involves people sitting in an office with a judge.

But many of us still find it inconvenient to take time off work and travel to a court, especially if the sums involved are relatively small. Even when costs can be reclaimed some people feel it’s just not worth it, while others may still consider even the small-claims procedure tricky or complicated.

Thanks to the internet, however, making a claim against someone is straightforward – and it can often be done entirely online. As noted, the service is called Moneyclaim Online (known as MCOL).

Got a claim?
Of course, there are many reasons for taking someone to court and Moneyclaim Online can be used only for some of them. As well, there are certain situations where it really is going to be best to get lawyers involved, or try some other solutions, such as mediation.

Essentially, MCOL is for situations where it’s pretty clear – though possibly disputed – that one person owes money to another. That might be because they haven’t finished doing something they were paid to, or did it so badly someone else had to be paid to put the mess right. Or they were paid for something, but never delivered it.

It can’t be used for personal-injury claims, such as trying to get the local council to pay compensation after tripping on a broken paving stone, or for things that would have to be decided by a jury, such as whether what has been said on a forum is libellous.

However, it’s also worth remembering that, even in cases where it’s clear someone’s owed money, going to court might not be the solution. For instance, if a company ceases trading after taking orders for, say, computers, there’s little point in taking them to court using MCOL, or any other process. If a company is no longer trading, there’s unlikely to be any money available.

The tax authorities have the first claim on debts and the only way ordinary people will get anything back is by registering a claim with the administrator – and, even then, it’s unlikely anyone would receive more than a tiny proportion of what’s owed.

In short, taking a company that’s no longer trading to court in order to recover ‘small’ amounts is almost always a waste of time.

Bear in mind that when a company is no longer trading there are other protections, principally where payment was made by a credit card. In this case the card issuer may be liable to refund money lost, and will do so without the expense of going to court – see our Consumeractive section for regular advice on matters like these.

Although MCOL can be used for claims up to £100,000, it is sensible to keep in mind the small-claims court limit – that’s £5,000 – and to restrict claims to simple, straightforward cases.

There are limits to the amount of information that can be submitted via the website and, if a case is complicated and may need witnesses or expert opinions to be presented, it may be worth instructing a solicitor to handle it.

Registering for Moneyclaim Online
Before using MCOL, it’s necessary to register on the Government Gateway website. Previous MCOL users also need to do this, though their old claims can be imported into the recently updated system. Either way, as we’ll show, it’s pretty straightforward to get started.

To start, visit the Moneyclaim online website. It’s a very good idea to read the displayed notes explaining how everything works and we also recommend spending some time looking at the Directgov pages about claiming for money.

Most visitors will be registering as an individual, but it’s also possible to register as an organisation – for example, so that a company can make a claim against a person or another company.

After clicking the link to register as an individual, users have to fill in their name and email address on the Government Gateway site. An identity (ID) number will be issued, and this should be noted down.

A registration reminder document (in PDF format) is available to download, too. The Government Gateway then redirects visitors back to the MCOL website to register there.

The MCOL site issues a ‘Customer Number’ that’s needed when contacting the Moneyclaim service, so it’s a good idea to print out the page displaying it and keep the number in a safe place.

Confusingly, although the customer number is needed when contacting MCOL, it’s not used to log in – that’s done using the Government Gateway ID number, so it’s vital to keep both these bits of information safe.

Making a claim
After registering with MCOL and the Government Gateway site, a claim can be filed right away. But before that, it’s worth taking a bit of time to consider what makes a claim successful.

It’s important to know just what’s being claimed for and to have a clear statement of facts. There might not be a courtroom involved, but MCOL still requires a ‘statement of truth’ before submitting a claim.

As regularly explained in Computeractive, keeping records of conversations with companies is very important – if taking someone to court, showing that they’ve been allowed time to put things right is vital.

A key part of this is a final ‘letter before action’, giving a clear deadline by which the other party should respond, and notifying them that legal action will be taken if they don’t do so.

There are plenty of template letters on the internet (the Government-backed Consumer Direct publishes one too).

It’s also worth noting that there are law firms specialising in debt recovery who will send such a letter for a small fee and, in some cases, that might be enough to make someone pay up.

For instance, Harvey Ingram will send a letter before action for just £2.40 (including VAT) – and there’s no obligation to use their other services if the letter doesn’t do the trick.

After gathering the information for a claim and making sure the other party has had time to respond to the letter before action, sign in to MCOL and click Begin New Claim.

On the next screen, a summary of all the information that is needed will be shown, together with the fees – these can be paid online using a debit or credit card. Click Continue and type in a reference for the claim, then click Next and confirm the contact details for the claimant (which will be you).

MCOL will then ask for the name of the defendant and it’s possible to enter a second person or organisation too, before clicking Next.

Now it’s time to supply details of the claim. There’s limited space, so it’s a good idea to write a summary beforehand using a word-processor program such as Word before copying and pasting it into the form, especially since it’s not usually possible to amend a claim once it’s been submitted (see the Moneyclaim FAQs for more details).

It’s also possible to claim interest on amounts owed – just tick the box to ensure the appropriate legal information is added to the claim. Below this, type in the amount that you are claiming and the site will calculate the appropriate court fee (the minimum charge is £25).

Finally, on the next page, review the summary, type in your own name to confirm the ‘statement of truth’ and proceed to the payment screen. Once payment has been processed, the claim will be issued within a couple of days by the Northampton County Court.

The progress of a claim can be tracked through the website using the reference number and all current claims – including those that haven’t yet been finished – will be shown after logging in to MCOL.

If you’re short of time or don’t yet have the full information, it’s possible to fill in some details of a claim, then come back and add more later, up to the point where the ‘statement of truth’ is confirmed.

What happens next?
After a claim has been filed using MCOL, the next steps are much the same as if it had been made in court – the defendant will be notified and has 14 days to respond. If they don’t, an application can be made for a ‘default judgement’ via the MCOL website.

However, just because someone’s had a judgment made against them, that doesn’t mean they’ll pay up. If they don’t, then an application for enforcement has to be made to the court, which will cost an additional £100, though this can be added on to the money owed.

It’s also possible that the defendant will deny the claim, or even issue a counterclaim. For example, one person might claim against another, saying that they’re owed £700 because they paid for something that wasn’t delivered; in defence the other person may claim that the agreed price was £500, so they’re owed £200.

If a claim is disputed, then it will end up in court. This means either the small-claims court if the amount is less than £5,000, or a county court – and you may have to attend court in person. The Directgov website has more details about exactly what may happen, and it’s well worth a look.

However, if the defendant agrees with a claim (or at least, doesn’t deny it), then they can pay the claimant directly and the claimant then uses the MCOL website to let the court know that everything’s been resolved.

Return to spender
Moneyclaim Online isn’t foolproof and it’s perhaps not the slickest of websites to use. It can’t help with every situation – the law’s far too complicated for that. But with a bit of information gathering and a few clicks of the mouse, the wheels of justice can be set in motion.