Taking a 'friend' to court for a small claim - advice please

billy_bulldog

In mid 2007 I lent a friend £2000 towards a flat deposit, first months rent and some incidental living costs (they were moving away to a new town and needed to be in a new place before their new job started, hence this should have been a bridging loan). As you do (stupidly) with friends, trust is implied and verbal promises given by them as to the repayment of the money (you know where this is going don't you?)

So here we are in 2009, they have never repaid a penny dispite my occasional text or call to chase them up politely. They have now moved again and changed mobile number, but I think I have tracked them down to an address and am about to issue a small claim against them through the county court.

My question is this - I have no written agreement, but I do have proof of the monetary transaction going from my bank to theirs. Do I have the right to now pursue them through the court, or have I no chance? Would the court even hear or consider such a case?

Any advice gratefully received. Thank you.

vaporate

No written agreement/contract. Not enforceable.

There is a thread about this. You will receive the same reply from others I guess.

choille

I think they'll say it was a gift.

First I would bill them & write an official looking one with interest added & at the bottom put that if this bill is not paid within - so many days - say 21? then you will raise a court action against them & pursue them for all expenses incurred in raising such an action. Send it recorded delivery.
I think before you raise a small claim you have to have proof that you have attempted to recover the money - sending a bill recorded gives you that proof. sometimes it's enough to make them settle, but don't know if it'll work.
Friends eh?

All the best

timmmers

choille wrote: »

I think they'll say it was a gift.

First I would bill them & write an official looking one with interest added & at the bottom put that if this bill is not paid within - so many days - say 21? then you will raise a court action against them & pursue them for all expenses incurred in raising such an action. Send it recorded delivery.
I think before you raise a small claim you have to have proof that you have attempted to recover the money - sending a bill recorded gives you that proof. sometimes it's enough to make them settle, but don't know if it'll work.
Friends eh?

All the best

Good idea (excpt the interest part maybe), if they reply with anything but "What loan?" you have your proof of the loan existing don't you?

t

PNPSUKNET

if you email them this can act as evidence, you will be able to issue small claims without a contract.

Ames

Don't forget though that even if you win a court case there's no guarantee you'll get any money, so you could well be throwing good money after bad.

Jakg

Sending them a bill proves you tried to get money - doesn't mean it was a loan, though.

Cheekiest tactic is to make a mistake on the bill (i.e. add an extra £500 or £750) so they reply saying what the loan value actually is - then you've got them :P

choille

I usually add interest (we run a small business) or add a late payment charge of £45 to their original bill. I also add at the bottom that if payment in full is not received within 7 days I will raise the matter in the county court & will persue them for the debt, plus any expenses that I have incurred in doing so. That usually rustles up indignation & a cheque for the original amount - for some reason.
I know someone who copies off a page of a small claim action form that advices the debtee what to do & also includes that.
Hellish when you have to be like that, but it's worth a stamp.

McKneff

Send them a note asking for the £3,000 they borrowed, they might just write back and say it was only £2000 - job done:D

salar15

The fact that there's no written evidence of one doesn't prevent there being a contract. However, you would have to demonstrate that both parties expected the money to be repaid. If so, there should be an enforceable verbal contract. The fact that you've taken steps after the event to follow up on this is good evidence that this was the case, but you would have to prove that both parties expected a process of repayment AT THE TIME that the contract was made.

In terms of actually proceeding with the action, there are various hoops you're meant to jump through before you bring a case to court - search for Pre-Action Conduct under the CPR Rules and see particularly Section III of the Practice Direction. If these steps aren't followed, then you potentially risk being unable to recover your costs, even if you win the case. It would be a bit risky to jump from texting and asking politely for your money back, to issuing a claim in the court - you have to escalate gradually.

As someone mentioned above, it's worth making sure that your friend would actually be able to pay up - there's no point bringing an action if there are no assets to enforce a judgment against.

Hope that helps!

billy_bulldog

Thank you all for the advice and opinions given above.

I have now located this persons address (having used a 'person finding' agency) and have just drafted a letter to them asking for more than I actually lent - this is so that they will say 'but you only lent me xx'.

Also, I have stated that I am "requesting an immediate settlement of the £xxxx, or a definite payment plan and schedule from yourself with regards to clearing this amount". I hope this then shows them (and the court at a later date) that I actually will accept payments over xx weeks or months, therefore I am not being unreasonable or unfairly harsh in my demands.

Question - if they accept the debt, and then start to make payments but stop repaying at a later date, would a court see this as me having taken every reasonable step before making a small claim?