I get court orders for payments here in Germany all the time. It's a rather straighforward and simple process here and not too much different from the proceedings in the UK. You fill out a form online and send it to the court. You then get a court order for payment. The debtor is notified of the court order and has a limited time to dispute it. If it is not disputed you can then send the bailiff to collect the money. I started about two years ago collecting payments through courts rigorously. My personal experience: 20 percent pay as soon as they get the court order. 1 percent disputes the court order - but recalls the dispute before it goes to court. (So far there has never been an actual court hearing or session.) Another 20 percent pay as soon as the bailiff is knocking at the door. The rest has no money to pay and they have to make a list of all their possesions so I can check if there is anything worth to seize and auction off. And their names are registered at the court in a public list of debtors - so other merchants using any form of credit checks are safe.
However once I have a court order for payment the statute of limitations for the invoice is 30 years under german law and I plan to send the bailiff about every three years to try collect the money + interest. And if only to anoy those people.
So far it has paid off.
I get about two court orders for payments per month. When my business grew to a size where chargebacks or returned direct debits got more frequent I bought a book about small claims law here in Germany so I could fill out all the forms myself and wouldn't need a lawyer. Court fees are modest, too - start at 23 EUR here. Today the process is even simpler. I simply fill in the forms online and send them with a click of my mouse.
I think the proceedings in the UK are not that much different. Check out this website for more information:
[
hmcourts-service.gov.uk...]
Or here:
[
adviceguide.org.uk...]
And after you have done so you can make your claim online here:
[
hmcourts-service.gov.uk...]
According to this document the fee for a £500 claim is £45 (£35 pounds if you use the online form to file your claim):
[
hmcourts-service.gov.uk...]
I certainly would not let someone get away with £500 so easily. If you feel uncomfortable about making the claim yourself, invest some money in a book about small claims or in a lawyer for advice. If you let a lawyer make the claim for you, see that you get a copy of all the paperwork so you can do it yourself next time. Also you should be aware that usually certain conditions have to be fullfilled before you can take your case to court. For example here in Germany the claim has to be due for payment and you usually have to send at least one payment reminder.
In my opinion today: Making yourself familiar with the small claims procedures in your jurisdiction is one of the first things you should do if you start a business.
I started my business about 8 years ago and I have lost thousands of Euros because I was stupid enough to listen to all the people on online forums who said collecting small claims was not worth it and just throwing good money after bad and a waste of time.
In most countries collecting small claims is easy and it's cheap - when you know how the system works.
Collecting money internationally - you are in country A, debtor is in country B - is a different story however and so far I have not tried that. But if both parties are in the EU there is a new small claims procedure since 2009 for claims not exceeding 2000 EUR.
[
europa.eu...]
I have read somewhere that the costs are between 15 and 200 EUR but can't remember where. Since I had no EU debtors in the last month I don't know the details of the proceedings yet. But I bet I will have to find out in the next few month. Since 30% of our customers are in other European Union countries it's only a matter of time.
On a personal note... I have found that filling in court papers and especially sending out the bailiff can be quite a satisfying experience. Even if I do not get the money in the end: To get a call from the bailiff that the debtor has not appeared to the appointment where he has to make an inventory of all his possesions and the bailiff has now applied for an arrest warrent to arrest the debtor to force him to disclose all his valuables - (or the fact he has none) is worth the money and the effort.
