The Claimant has issued Small Claims Track Online Proceedings against you for breach of contract for approximately £5,000.00 damages for provide the goods and services contracted for under your book “ghost-writing” services. Your defence is that you fulfilled your side of the bargain and any delays and failure were in fact due to the claimants’ failures rendering them in breach of contract and therefore you are entitled to keep the fees paid, and perhaps even to issue your own Part 20 claim for contribution and indemnity.
You must respond to the Claim Form as soon as possible (and before the 14-day Acknowledgement of Service deadline expires) stating whether you deny the claim in full, admit the Claim in full, or admit the Claim in part. You should register with Small Claims Track online as a Defendant using the URL stated on the letter from the Court Service serving the Court Proceedings (https://www.gov.uk/respond-money-claim). If you do not respond to the Claim Form (and indeed all other Court Directions) within the timescales stated, you risk the Claimant applying for and/or the Court entering of its own accord a Judgment In Default against you for the entire amount of damages claimed, plus interest on damages and Court fees. This will mean that you have a County Court Judgment (“CCJ”) against you without the Claimant having to meet the burden of convincing a Court Judge of the substantive merits of the Claim at Trial.
The parties cannot normally recover solicitors’ costs on the Small Claims Track, even if they are successful at a fully contested final hearing. This leaves you in a tricky situation as if you instruct solicitors to advise you and conduct your defence, you are unlikely to recover your costs at the conclusion of the claim if you are successful.
You should contact your home or business insurers and ask if they will cover your legal costs under a legal expenses insurance policy. They will either pay your solicitors’ fees or appoint a law firm on their panel of solicitors to act for you.
If you have no other option but to defend the Claim yourself without legal support, rest assured that the Small Claims Track is designed for non-lawyers (known as “Litigants In Person”). The Trials are relatively informal, and the judges do not expect parties to have the same legal knowledge as experienced solicitors and barristers. There is useful advice on bringing and defending Small Claim Court Proceedings on Citizens Advice (https://www.citizensadvice.org.uk/law-and-courts/legal-system/small-claims/making-a-small-claim/), the consumer protection advice magazine/website “Which?” (https://www.which.co.uk/consumer-rights/advice/how-to-use-the-small-claims-court), and Small Claims Court Genie (https://www.smallclaimscourtgenie.co.uk/).
Aside from the direct expense of legal fees, you must also consider the “opportunity cost” to you and your business in diverting time, energy, and resources to defending a relatively small damages claim, which could be better spent servicing your existing customers and expanding your business. Litigation is an inherently risky and stressful exercise, and you must consider whether an economic settlement of, say, 50% of the pleaded damages claim would be a good outcome to dispose of the matter before it escalates.