Small Claims, County Court or Arbitration?

When informal attempts fail

You have tried phone calls, emails and formal complaint letters, but the company still refuses to pay what you are owed. Several routes exist for recovering your money, and the right choice depends on your circumstances, the amount involved, and the nature of the dispute.

Understanding the differences between arbitration, alternative dispute resolution and the courts will help you decide which path makes sense for your situation.

Arbitration and trade association schemes

Before heading to court, check whether the business belongs to a trade association. Many trade bodies operate their own arbitration schemes, which can offer a quicker and less formal way to resolve disputes.

Arbitration through a trade association is often simpler than court proceedings. You typically submit your evidence in writing, and an independent arbitrator reviews both sides before making a decision. There is usually no hearing to attend in person. Whether the decision is binding depends on the specific scheme's rules, so check this before proceeding.

However, there are some points to consider:

• You may have to pay a fee to use the arbitration service, particularly if your claim is unsuccessful
• If you lose at binding arbitration, you generally cannot then take the same dispute to court, except in very limited circumstances
• You usually need to choose one route or the other: arbitration or court, not both

Review the terms of any arbitration scheme before committing. Ask about fees, timescales and what happens if the decision goes against you.

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Other forms of alternative dispute resolution

Even if the business is not part of a trade association, other options may be available through alternative dispute resolution, commonly known as ADR.

Ombudsman schemes exist for many sectors, including financial services, energy, communications and property. If a company falls under the jurisdiction of an ombudsman, you can escalate your complaint to that body after going through the company's internal complaints process. Ombudsman decisions are binding on the company if you choose to accept them. If you reject the ombudsman's decision, you remain free to pursue court action.

Some industries have regulatory bodies that can intervene in disputes or require businesses to participate in approved ADR schemes. Independent mediation services are another possibility. Mediation involves a neutral third party helping both sides reach an agreement, though unlike arbitration, the mediator does not impose a decision.

ADR can be faster and less stressful than going to court. It may also be cheaper, though costs vary depending on the scheme and the value of your claim.

Taking your case to court

If ADR is not available, not suitable, or has not resolved your dispute, the courts remain an option. In England and Wales, most straightforward money claims are handled through the county court system.

Claims under £10,000 can usually go through the small claims track. This is designed to be accessible without needing a solicitor. The process is relatively informal, and if you lose, you will not normally have to pay the other side's legal costs, though exceptions exist for unreasonable behaviour. Check GOV.UK for current financial limits and court fees.

Larger or more complex claims may follow more formal procedures with greater cost risks. Before issuing a claim, you are expected to follow a pre-action protocol, which includes sending a formal letter before action and allowing reasonable time for a response.

You can start a money claim online through the Money Claims Online service for straightforward cases. The court fee depends on the amount you are claiming, and you may be able to recover this from the other party if your claim succeeds.

If you obtain a court judgment in your favour, you may need to take further steps to recover your money. Enforcement options include applying for a warrant of control, which allows bailiffs to seize goods, or an attachment of earnings order if the debtor is employed. Consider whether the person or company you are claiming against has the means to pay before starting proceedings.

If you are on a limited income, you may be able to get free legal advice from a law centre, Citizens Advice, or through the legal aid scheme for certain cases.

Whichever route you choose, keep copies of all correspondence, receipts and evidence. Clear documentation will strengthen your position whether you pursue ADR or court action.