How To Initiate A Money Claim?
A money claim is a simple claim for the recovery of damages in monetary form. In the United Kingdom, predominately three methods are used to initiate/file a money claim. The first method through which a money claim can be initiated is by using the internet-based service called the “Money Claim Online” (hereinafter “MCOL”). MCOL is a service devised by the ministry of justice to make the filing of money claims extremely accessible for citizens. However, the service is relatively new, and changes are still being made based on user feedback. Therefore, it is not recommended to the citizenry as of yet.
The second method is the longstanding online service called “make a money claim online”. The said service is also an internet-based service. However, unlike MCOL, it has withstood the test of time and has established itself as the go-to service.
The last method is the traditional paper-based approach. In the paper-based approach, a standard money claim form called FORM N1 is filled out by the claimant, and then the court issues the claim form at the request of the claimant to initiate the money claim. This method is widely used; however, the government of the United Kingdom is promoting internet-based services to file a money claim by providing various fee concessions. For more details on the paper-based method, please refer to part 7 of the civil procedure rules, 1998.
Prerequisites of A Money Claim
It is pertinent to note that there are no absolute prerequisites the claimant has to comply with to initiate a money claim. However, the court expects that the claimant has taken certain steps to settle the dispute before entering into litigation; if these steps are not complied with by the claimant, the claim either becomes invalidated or the chances of the claim becoming successful declines. Hence it is highly recommended that the claimant takes certain steps before filing a money claim.
The Ministry of Justice, on their official website, has provided comprehensive guidelines in the form of practice direction named “pre-action conduct and protocols”. These practice directions provide detailed prerequisites required to file a money claim. Moreover, it also lays out the subsequent consequences that may follow if the claimant and the defendant fail to comply with the prerequisites. The list of prerequisites recommended before filing a money claim is as follows:
- The first prerequisite would be the determination of the amount of damages by the claimant. If the claimant wants to recover for a specified/fixed amount, then the claimant can use any of the abovementioned methods to start a money claim. However, if the claimant is unaware or not sure about the amount of recovery, then the claimant is restricted to the paper-based approach. It is noteworthy that in this regard, the MCOL method is even narrower because the maximum amount claimed should be less than £100,000. As shown above, the MCOL method is very restrictive. Therefore, before filing a money claim under this method, it is highly recommended that the claimant thoroughly reads the Money Claim Online – User Guide for Claimants.
- The second prerequisite is the requirement to send a notice to the defendant. The draft of the notice should contain concise details of the claim; the claimant should also mention the specific amount they want to recover and how they calculated the said amount. After notice has been served to the defendant, the claimant has to give the defendant reasonable time to prepare a response before filing the claim. The time is usually fourteen (14) days’ – three (3) months, depending on the complexity of the claim. For more details, please refer to clause six (6) of the practice directions.
- The third prerequisite is whether the parties tried to resolve the dispute through an alternative means such as going to a mediation service or hiring an alternative dispute resolution service.
It is worth mentioning that the aforesaid prerequisites are the most important as the court gives them more weightage. However, the court may also consider other factors depending on the method of filing the claimant chooses.
Note also that there are a few possible consequences of non-compliance with the prerequisites of filing a money claim. The court may, in some cases, hold that the prerequisites are unnecessary and relieve the parties from the obligation of complying with them. Courts may, in other circumstances, stay the proceedings altogether until the prerequisites are complied with, and in other cases, the court may apply various sanctions on the parties. Therefore, it is highly recommended to comply with all possible prerequisites before filing a money claim so that the chances of your claim becoming successful increase.