Deciding whether to take your debt claim to court

Legal action should be a last resort to recover debts and you should explore all other options first:

• Take all other reasonable steps, including communicating with the customer - see ensure customers pay you on time.
• Consider some form of alternative dispute resolution (ADR).
• Consider taking back your goods and services, if appropriate.

Mediation is a way of resolving disputes without the need to go to court. It involves using an independent third party - a mediator - who helps both sides come to an agreement.

Negotiation is when the people involved in the dispute - or their representatives, such as solicitors - discuss the issue until they reach an agreement that is acceptable to both sides.

Arbitration involves an independent third party deciding what should happen based on evidence given to them about the dispute. 

Early neutral evaluation (ENE) is when people involved in a dispute send evidence to an independent third person who gives their opinion on the dispute.

If making a claim seems the only answer, you should consider your chances of winning. If your claim is disputed it could be difficult to prove the customer is at fault. You will need to provide as much evidence as you can of the validity of your claim, such as purchase orders or invoices, and copies of reminder letters.

The Advice Services Alliance provides further information on ADR.

Make sure the customer can pay

If the person or business you're taking action against has no assets or has a history of bad debt then you can't be certain of receiving all of the money owed.

Credit reference agencies can provide credit reports on businesses as well as on individual consumers. You will need to have some information ready, such as:

• the name of the business or person you want to get a credit report for
• the last known address
• why you want the credit report

You can check a company's bankruptcy status and outstanding debts with the NI Courts and Tribunals Service.

If you win your claim, the customer is required to pay the sum claimed.

Be prepared for the costs

You will have to pay court fees in advance. However, they may be recovered from the defendant if you win. Note that:

• court fees are payable when you issue a claim and at different stages of the claim, including if you have to enforce the judgment
• if you lose, or do not succeed in enforcing your judgment, you will not be able to reclaim the court fees
• if you win and succeed in enforcing the judgment, you may be able to claim your solicitor's fees and other costs back from the defendant, so long as they are outlined on the court order
• if you refuse to consider alternative ways of sorting out your claim before taking court action, you may not be able to claim your costs back and the court may order you to pay your customer's court costs, even if you win the case
• you can check the current court fees
• you may be able to receive assistance with court fees