Problems with pursuing a small claim and possible solutions | Bluestone ARM


The problem of debt of less than £5,000.00 in the small claims court

In the current difficult economic conditions a small business unpaid debt of £5,000.00 or less may often represent a major problem for that business.

With debts of less than £5,000.00 being classified as small claims for the purposes of the County Court system, the prospect of pursuing the debt through the court system is particularly difficult. Whilst the small claims system is more streamlined and less legalistic than cases which are not dealt with in the small claims court, we are still talking about law and using the courts.

The difficulty with the small claims court is that legal costs are almost completely irrecoverable. Using solicitors who may charge upwards of £200.00 an hour is generally simply not logical or good business sense in these circumstances, and most small businesses are fully aware of this.

What tends to happen in the above situations is that a creditor will pursue the debtor for some time. If this does not work, many debtors will turn to debt recovery agencies, for completely understandable reasons.

Most debt recovery companies are geared up to operate on a volume basis. They are aware that recovery can be a hit and miss affair and most of these companies will send standard letters to a  debtor and follow a set process of making phone calls to the debtor. These tactics are well known to debtors and consequently, a significant proportion of debtors will simply ignore the debt collection company and effectively call their bluff.

In the above scenario, which is all too common, a small business ends up in a very difficult situation and this is where Bluestone’s approach offers a genuine alternative, as we do not handle volume collections.

For debts of between £1,000.00-5,000.00 our approach is to :-

  • analyse the debt and the debtor – why haven’t they paid, what have they got to lose, what are their tactics ?
  • utilise a bespoke strategy to pursue the debt, contacting and communicating with the debtor in a  way which is clearly different to a standard debt collection approach
  • where necessary and agreed with a  client, we pursue the claim through the courts using our experienced in-house legal team, which avoids the problem of pursuing a claim without legal advice

So, if you are a creditor and are owed between £1,000.00 to £5,000.00, get in touch with us to find out how we can help.

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