What is a money claim?
The term ‘money claim’ refers to a legal action (ie court claim) where one party (ie the claimant) seeks financial compensation or another monetary remedy from another party (ie the defendant). Money claims are typically associated with civil cases where a claimant alleges that they are owed a specific amount of money (eg due to a breach of contract). Money claims are typically issued in the small claims court.
For more information about issuing money claims and the claims process, read Issuing a money claim, Small claims court in England and Wales and Small claims court in Scotland.
Note that the process for bringing money claims for more than £5,000 in Scotland is complex. As a result, the information provided in this guide on defending money claims in Scotland only addresses claims for less than £5,000. Ask a lawyer for information on more money claims of more than £5,000.
How can a defendant respond to a money claim?
A money claim involves the defendant receiving documentation (eg in the form of a letter) detailing your claim against them. This will usually explain who they are, how much money they are claiming and when the defendant has to respond.
The defendant will normally respond to a money claim by:
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accepting that the amount is owed (and paying you the full amount)
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accepting that money is owed but disputing the amount in question, or
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defending the claim (ie rejecting the claim that money is owed)
The process that follows this depends on how the defendant chooses to respond to a claim.
What if the defendant responds by admitting that money is owed?
The process for dealing with money claims depends on where the claim is brought.
Money claims brought in England and Wales
The defendant can respond to a claim and offer to pay the money owed in:
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instalments (eg using a Letter proposing payments in instalments), or
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one lump sum at a date in the future
They can also admit that they owe money but fail to make any proposal for payment.
It is then for the claimant to decide what to do. They can:
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accept the proposal for payment (eg using a Letter accepting payments in instalments), or
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refuse the repayment proposal and ask the court to decide
If there is no proposal for payment, the claimant can request a judgment from the courts. Note that this may incur extra court fees.
Money claims brought in Scotland
The defendant can respond to the claimant’s claim and admit that the money is owed and:
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offer to make payment in full to the claimant or their lawyer - once the claimant receives payment in full they should inform the courts of this
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request time to pay the debt either online or using Form 5A - the claimant can either accept or reject the defendant’s request. If the claimant rejects the request, the courts can decide whether to grant the defendant time to pay
A defendant may admit that payment is due but fail to make payment arrangements or request more time to pay. If this is the case, the claimant will need to request a judgement from the courts.
What if the defendant disputes the claim?
The process for disputing claims depends on where the money claim is brought. However, in most cases this will involve a hearing in court, which will involve court fees being paid (which are different in England, Wales and Scotland).
Money claims brought in England and Wales
In disputing the claim, the defendant must provide a defence (ie the reasons why they disagree with the claimant’s claim).
The courts will send the claimant a form (known as a ‘directions questionnaire’) to help them decide when the court hearing should be. They may also ask the claimant to provide more information on the case. The courts’ directions can also require the parties to disclose documents relevant to their case. This is done by serving a list of documents on the other. The list must include documents the claimant is relying on and documents that do not help their case. Each party is entitled to inspect any document on the list.
It is crucial that you comply with all directions provided by the courts (eg returning any forms in a timely manner), Otherwise, a penalty can be imposed or the case can be postponed.
A hearing will then typically take place to help the courts reach a decision. However, in some circumstances, the parties can agree for their case to be dealt with by the courts based on the papers before them without the need for a hearing. Alternatively, a case may be settled before trial. In these circumstances, confirm this in writing and send a copy to the court.
At the hearing, the parties can represent themselves, have legal representation, ask someone other than a lawyer to advise them in court, or ask someone to speak on their behalf.
When the trial has taken place, the parties will receive the court's decision. This is typically provided on the day. Reasons for the decision are not normally given.
For more information, read Small claims court.
Money claims brought in Scotland
Where the defendant disputes the claimant’s claim, they need to formally notify the claimant of this. To do so, they can fill in Form 4A and send a copy to the claimant and the courts. It is then up to the sheriff (ie a judge in the Sheriff Court) to decide how to proceed.
The sheriff has a number of options to choose from, including:
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referring the parties for alternative dispute resolution
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arranging a case management discussion
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arranging a hearing
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considering making a claim without a hearing
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dismissing the claim
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reaching a decision because the claim is unlikely to succeed
You will be informed of the sheriff’s decision. If you need to attend court, you will be informed of the date and time and the reason for the hearing/discussion.
For more information, read Small claims court in Scotland.
What if the defendant does not respond?
The process for dealing with the defendant’s failure to respond to a money claim depends on where the claim was brought.
Money claims brought in England and Wales
If the defendant does not respond to the claimant’s money claim, the claimant needs to ask the courts to order the defendant to pay. It is relatively easy to obtain judgment in the claimant’s favour (known as a 'judgment by default'). The claimant can do this by requesting a judgement:
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online (if they made their claim online)
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using Form N225 (if they made their claim by post and their claim was for a fixed (or ‘specified’) amount)
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using Form N227 (if they made their claim by post and their claim was for an unspecified amount)
Note that you must then take enforcement action to recover the debt.
Money claims brought in Scotland
If the defendant does not respond to the claimant’s money claim, the claimant needs to obtain a judgement in their favour. The claimant can do this by filing Form 7A - Application for a Decision with the courts.
What if a defendant fails to repay the money owed?
If, at any time, a defendant fails to make a payment that has been agreed upon or ordered to make by the courts, the claimant can ask the courts to take appropriate enforcement action. Read Court orders and enforcement to find out more about the types of action that can be taken and how to do this.
Remember to follow our How to recover debt checklist if someone owes you money. If you have any questions or concerns about money claims, do not hesitate to Ask a lawyer.
