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Hello, this is Jim, a dual-qualified lawyer (UK & Republic of Ireland) and happy to help you today.
For that sum, it would be a small claim and yes, the claimant needs to issue proceedings in the county court. You will need to reply to the proceedings - the court will send you a response pack to do this to allow you to state your defence. The claim will then be listed for directions and would be heard on a date between 6 and 12 months from now. The claimant firstly needs to send you a letter before action to give you a chance to respond before they involve the court - you should reply to that letter to dispute the claim and say why (and invite them to drop their case).
If you need ongoing help with this claim please let me know as I will be available to answer further questions.
I hope this helps? If I have answered the question would you kindly leave me a 5 star rating (at the top of your screen), any follow up questions are welcomed.