INTRODUCTION
One of the challenges of small businesses in Nigeria is funding. The owners of small businesses have to find ways of raising capital. Added to this is the fact that sometimes business owners have to sell goods on credit or render services on the assurance of future payments by clients. It becomes very frustrating therefore when these businesses are owed. The cost of litigation, the fear of losing clients should they proceed to court to recover sums owed; and the time expended in the litigation process can be very discouraging.
It is no longer news that cases drag on for years even; simple debt recovery cases. It is the writer’s belief that the Small Claims Court if properly managed will address these issues of delay as the objective of the said Court is to provide easy access to an informal, inexpensive and speedy resolution of simple debt recovery case.
COMMENCEMENT OF ACTION
To commence an action in the Small Claims Court;
- The Claimant or one of the Claimants must reside or carry on business in Lagos State;
- The Defendant or one of the Defendants must reside or carry on business in Lagos State;
- The cause of action [that is, the fact(s) giving right to your claim] must have arisen wholly or in part in Lagos State.
- The amount claimed must be a liquidated sum that is; a specific sum which can be ascertained by mere arithmetic.
- The sum must not be above =N=5,000,000 [Five Million Naira] excluding interest and costs.
- The Claimant must have served on the defendant a demand letter.
At the expiration of the 14 days on the demand letter, if the Defendant (s) refuse to pay, the Claimant(s) would then proceed to fill in the necessary details in the Small Claims Complaint Form SCA 2 and Small Claims Form SCA 3.
It should be noted that once a claim is adjudged to have qualified to be a small Claim, it is so marked at the Small Claims Registry and upon payment of the filing fees depending on the amount claimed, the Registrar of the Small Claims Court is expected to forward the case file to the Administrative Magistrate within 24 hours for assignment and the Administrative Magistrate also has a period of 24 hours on receipt of the case file to assign same to a Magistrate of the Small Claims Court.
The Service copy of the Summons is expected to be served on the Defendant within 7 days of filing by the Sheriff of the Small Claims Court who shall thereafter file the affidavit of service within 2 days.
If the Sheriff is unable to serve the defendant or any of the defendants (where they are more than one), he shall prepare an affidavit of Non-Service stating the reasons why service could not be effected on the Defendant(s).
It is the Claimant’s responsibility [where he chooses to represent himself] or that of his Counsel (where he is represented by one) to apply for an order of substituted service by filling and filing Form SCA 7.
Once the issue of service is sorted out, the Defendant is expected to file either his Defence/Admission or Counterclaim within 7 days by completing Form SCA 5 as appropriate. If he fails to do so, he shall be held to have admitted the claim. A defendant can file his defence and also a counterclaim where he alleges that the Claimant is also indebted to him. However, the Counterclaim must arise out of the same transaction or series of transaction and his counterclaim which must be for liquidated amount [that is, a specific sum which is also ascertainable] and must not exceed =N=10,000,000 [Ten Million naira] which is the limit of the general jurisdiction of the Magistrate by virtue of Section 28 [1] [a]of the Magistrate Court Law 2009.
The Claimant on receipt of the Defendant’s Defence may file a reply. However, once a Counterclaim is filed by the Defendant, the Claimant must file a reply and a defence to counterclaim as the position of the law is that what is not denied is deemed to have been admitted.
TRIAL
At the trial of the case, if neither the Claimant nor Defendant appears, the Magistrate may unless he sees good reason to the contrary strike out the claim. However, where the Claimant appears and the Defendant is absent and there is proof that he has been served, the Magistrate shall proceed with the trial of the case and enter judgment if the Claimant is able to prove his claim.
If on the other hand the Defendant appears and the Claimant is absent on the date fixed for hearing, the Court may strike out the Claimant’s case and if the defendant filed a counterclaim, the Magistrate shall proceed to hear his counterclaim and enter judgment if he proves same.
ADVANTAGES OF THE SMALL CLAIMS COURT
One of the many advantages of the Small Claims Court is that apart from the fact that at the first appearance of the Parties, the Magistrate encourages and also facilitates amicable settlement of the case, the entire proceedings from filing to judgment should not exceed sixty days.
Adjournments are very short as the Rules provide for day to day adjournment.
Also, a claimant and a defendant may decide to represent themselves without recourse to a Lawyer as the procedure is simpler and less cumbersome.
The filing fees are reasonable.
JUDGMENT
Upon completion of the trial, the case is adjourned for judgment. However, in practice [especially where counsel represents litigants], the Courts usually direct that final written addresses be filed which are subsequently adopted before the case is fixed for judgment.
Upon judgment, the judgment sum is expected to be paid within 14 days of delivery of the judgment.
APPEAL
Any person aggrieved with the judgment of the Court shall fill the Appeal Form within 14 (fourteen days) of the delivery of the Judgment and he must state the reasons for the Appeal. The Small Claims Registry shall compile the records of appeal within fourteen (14) days of the submission of the Appeal Form.
The Small Claims Registry shall thereafter forward to the Fast Track Registry of the High Court, where it is then assigned to a Judge of the Fast Track Court designated to hear appeals from the Small Claims Court and the Judge so designated shall cause Hearing Notices to issue to the parties and the appeal shall be heard at the earliest convenience of the Court. The appeal which shall be by oral hearing of the parties on the records of the appeal and the whole appellate process from the assignment of the Appeal to judgment shall not exceed thirty (30) days.
CONCLUSION
The Small Claims Court which was established by the Lagos State Judiciary in April 2018 is a very welcome development as far as Micro, Small and medium enterprises are concerned. It is our hope and belief that if properly run and managed, it would boost not only the confidence of foreigners but also that of our local businessmen and women.
Note:
This article is not made to be an exhaustive legal material, It is designed to be an introduction to the concepts of law and hence should not be used to replace good legal advice. Ogboduogbe and associates intend this content for learning purposes and would not be held liable for damages caused by misuse of this material. If you are in need of legal advice feel free to Contact Us