Debt claims in Magistrates Court v County Court

News - 25/06/2013

Party Wall Awards often provide for sums of money to be paid by one owner to another; for example, as compensation for damage caused, or in respect of professional fees. If the debtor does not pay then the creditor may need to issue proceedings to recover the debt.

Under section 17 of the Party Wall Act any sums due in pursuance of that act (e.g. under an award, or an account) are recoverable “summarily as a civil debt”. This means that, in addition to a claim for the debt in the County Court, the creditor can enforce the debt under section 58 of the Magistrates’ Court Act 1980.

So what is the difference between the two processes?

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Magistrates’ Court

County Court

Court fee of £200 to issue the summons, and a court fee of £500 for a contested hearing

Court Fees of between £60 to £610, depending on the amount claimed

Proceedings must be issued within 6 months of when the debt is demanded

proceedings must be issued within 6 years of when debt becomes due

Reasonable Costs (including legal costs) can be recovered.

Only Court fees can be recovered.

Interest cannot be recovered

Can recover interest at 8%.

Hearing usually within a few weeks

Hearing can be 6 months after issuing proceedings.

 Although a larger set of Court fees is payable, and interest cannot recovered, this is (in my view) compensated for in the simpler procedure, and the ability to recover costs. I would therefore recommend proceedings in the Magistrates’ Court in preference to the County Court, provided of course that the limitation period has not expired.

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