Financial disputes: How, why, and when to make a claim

A financial dispute arises when you believe a person or a business owes you money. To settle money matters like these, you need to make a claim – you’ve probably heard the term ‘small claims court’ or ‘making a court claim’ in relation to money disputes. There’s actually no such thing as a small claims court; it’s just the term for processing a very simple claim in court.


Find out more about legal disputes in our guides: 
How to deal with neighbour disputes

How to resolve consumer disputes the right way

How much can I claim in a dispute over money?

Small claims can be made for lots of different reasons where one party takes issue with the actions of another – like a breach of contract, the non-return of a tenancy deposit, or the sale of faulty goods. If they infringe your rights or break the law, you might have to end up making a court claim.

Generally, though, the procedure is used to claim back money that’s owed to you. Since large sums of money tend to complicate cases, there’s an upper limit to the amount you can claim in the so-called ‘small claims court’.
  • £10,000 in England and Wales
  • £5,000 in Scotland
  • £3,000 in Northern Ireland
If your claim is above the threshold, it’s possible that you won’t be about to make a small claim and have to attend a formal hearing. Alternatively, you could just lower your demand to meet the limit.

Remember, you can only make a claim if the problem happened in the last six years.

When should I make a claim?

You don’t want to start by launching legal action. Taking a case to court should be a last resort, especially over small financial disputes.

In fact, the court will want to see evidence that you attempted to settle the dispute prior to taking them to court, giving the other party ample time and opportunity to resolve the issue. Not doing so could seriously harm your case.

In the first instance, write a letter or email outlining your dispute. Be sure to mention that you’re considering taking the person or business to court, too. Keep a copy of this letter and retain proof of postage if you’re mailing it in.

Make sure to include:
  • Your name and address
  • An outline of the situation
  • Your expectations for resolution – this might be repayment, replacement, etc
  • How much you believe you’re owed
  • How you settled on that amount
  • A deadline for resolution – this is usually 14 days, but depending on the dispute, you may be feeling more generous
If the other party fails to tackle the problem or disagrees with your version of events, then it’s time to act.

How do I make a claim over a financial dispute?

For residents in England and Wales, the quickest and easiest way to make a claim is by using the government’s online ‘Make a money claim’ form. This should only be used when you’re asking for a specific amount. If you don’t know the exact money owed, you must download, print, and complete the N1 form.

Since making a claim means paying a fee (we’ll get to that shortly), you won’t be able to use this service if you’re a low-income applicant as you may not have to pay any fees.

You also can’t make an online claim if it’s against more than one person or organisation. If the dispute involves two people or companies, use HM Courts & Tribunal Service’s Money Claim Online, which is for claims between £10,001 and £100,000. For financial disputes against three or more parties, you’ll need to complete the paper N1 form.

While you don’t need to use a solicitor to make a claim, at this point, it could be worth seeking their advice.

Should I try mediation during a money dispute?

Once you begin your small claim, you could be offered mediation. It’s optional, although could help you resolve the dispute in an agreeable manner. This is offered by the Civil Mediation Council – a wholly independent and neutral organisation that gives information (but not advice) about the law and the options available to both parties.

According to the organisation, during mediation ‘offers can be made without influencing what happens if the dispute is eventually resolved in court (known as offers made ‘without prejudice’) which can enable participants to try to reach a settlement without compromising their position.’

Should an agreement be reached, a binding document is drawn up and signed. If the claim is already in court, a consent order is then sent to show agreement from both parties.

How much does a money claim cost?

How much you’ll pay to make a claim for disputes over money depends on two factors – how much the claim is for and how you’re making the claim. The only exception is if you don’t fill in the ‘amount claimed’ section of the form. In that case the fee is £10,000, so it’s not something you’ll want to leave out.

Money dispute claims fees:
  • Up to £300
Paper form: £35
Online form: £25
  • £300.01 - £500
Paper form: £50
Online form: £35
  • £500.01 - £1000
Paper form: £70
Online form: £60
  • £1000.01 - £1500
Paper form: £80
Online form: £70
  • £1500.01 - £3000
Paper form: £115
Online form: £105
  • £3000.01 – £5000
Paper form: £205
Online form: £185
  • £5000.01 - £10,000
Paper form: £455
Online form: £410

Additional fees may be payable if the claim requires a court hearing or further action is needed to resolve the financial dispute.

What happens after I’ve made a claim?

After you put in a claim against a person or organisation, they’ll have 14 days to respond. They might also send an acknowledgement of service, which gives them a further 14 days to dispute the claim.

They could pay up without question, update your online claims form or email Money Claims with the payment details. When using a paper form, you’ll need to directly inform the court.

If you don’t receive a reply, you can then request a ‘judgement by default’. For claims of a specified amount, use form N225; for unspecified amounts, use form N227. Should the court agree, it’s possible to win without further action.

The person or business might also make an offer, telling the court they’re willing to pay some or all of the money – you’ll be notified about this, with details on how to accept the offer.

On the other hand, they may dispute your claim. At this point, you’ll probably have to attend a hearing at county court. To prepare for the case, the court will send you Directions Questionnaire.

Essentially, it lets you say ‘Yes, I agree to a hearing to resolve this financial dispute’. Regardless of whether you agree, though, you’ll still need to fill in the form. 14 days before the hearing is set, any evidence you have should be submitted.

If the judge awards you the claim, they’ll usually give the defendant a month to pay the amount. However, you can disagree with the ruling (likely, the amount awarded) and request an appeal. But it’s worth remembering that even on appeal, you may not get back everything you believed you’re owed.

Do I need a solicitor to begin making a claim?

You don’t have to use a solicitor – but it could be advisable, especially if the large sums of money are at stake. They can guide you through the process and often help get you the money you’re owed (or, at least, as much as the court grants).

It’s worth weighing up the cost of a legal professional against the compensation you stand to win. Use our quick quote form to compare costs for solicitors near you, expertly tailored to your needs as a claimant.

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Steve Clark

Steve creates helpful guides for The Law Superstore. He enjoys digging deep into new areas of the law, supporting partners, and translating legalese and jargon into plain English everyone can understand.