Small Claims Court

By Pasecom Group Ltd editorial team · Reviewed 20 October 2026

This section is for businesses weighing up court action over an unpaid invoice owed by a UK limited company, LLP or PLC. It explains how the small claims track works in England and Wales, what it costs, how long it tends to take and how it compares with using a collection agency. Detailed guides are listed below.

What the "small claims court" actually is

There is no separate small claims court. Money claims are issued in the County Court, usually online through HMCTS. If the debtor defends the claim and it is worth up to £10,000, a judge will normally allocate it to the small claims track, which has simpler procedures, limited recoverable costs and informal hearings. Undefended claims never reach a hearing: you request judgment by default instead.

The main steps

1. Letter before action. Send a clear letter giving the company a reasonable time to pay or respond, usually 14 days, in line with the Practice Direction on Pre-Action Conduct.
2. Issue the claim. File the claim online or on paper, pay the issue fee and set out the amount, interest and the basis of the claim.
3. Response. The company has 14 days from service of the particulars of claim to respond, or 28 days if it acknowledges service first.
4. Default judgment or defence. If there is no response, request judgment. If there is a defence, the claim is allocated and usually referred to mediation.
5. Hearing. If mediation fails, a judge decides the claim at a hearing, which may be in person or remote.
6. Enforcement. If the company still does not pay after judgment, you apply for enforcement, which costs further fees.

What it costs

Court fees are set by HMCTS and depend on the amount claimed. There is an issue fee when you start the claim, a hearing fee if it goes to a hearing, and further fees for each enforcement step. Check the current figures on GOV.UK before you issue. On the small claims track you usually cannot recover legal fees from the other side, so paying a solicitor for a small claim often makes little economic sense. Your own time preparing and attending is a real cost too.

Interest and compensation

On a qualifying business contract you can include statutory interest under the Late Payment of Commercial Debts (Interest) Act 1998 at 8% above the Bank of England base rate, plus fixed compensation of £40, £70 or £100 per invoice. See statutory interest and late payment compensation.

Common pitfalls

• Suing the wrong entity, for example a trading name instead of the registered company.
• Issuing without a proper letter before action.
• Missing evidence: no signed terms, no proof of delivery, no record of the debtor accepting the work.
• Assuming a judgment means payment. A company with no assets may never pay.

Court or collection agency?

For an undisputed invoice, a demand from a collection agency is often the quicker first step, and the claim can still go to court later. Debt Collection UK, a trading name of PASECOM GROUP LTD (company 17139327), introduces B2B claims to independent partner agencies, who collect. The fee is 15% of what is recovered, payable only when you have been paid. We are not solicitors and do not issue proceedings. If the debt is genuinely disputed, take legal advice instead.

Frequently asked questions

What is the small claims limit?

In England and Wales most money claims worth up to £10,000 are allocated to the small claims track if they are defended. Larger claims go to the fast, intermediate or multi-track.

Do I need a solicitor for a small claim?

No. The small claims track is designed for people and businesses who represent themselves. A company can be represented by an employee or director with the court's permission.

Can I recover my legal costs in the small claims track?

Usually only limited fixed costs, such as court fees and some witness and travel expenses. Legal fees are generally not recoverable unless the other side has behaved unreasonably.

Will I have to go to mediation?

Most defended small claims are now referred to the Small Claims Mediation Service before a hearing. If mediation does not settle the claim, it goes on to a hearing.

Is a collection agency an alternative to the small claims court?

Often, for an undisputed invoice owed by a company. A partner agency's demand settles many files without a claim. The fee is 15% of what is recovered, payable only when you have been paid. Recovery is not guaranteed.

Can I use the small claims court against a sole trader through this service?

No. This service only handles claims against UK limited companies, LLPs and PLCs.

Guides in this section