When All Else Fails, File a Small Claims in Court
If the amount of money that the client owes you is less than RM5,000, you can take it to the Magistrates’ Court through the small claims procedure, which is governed under the Order 54 Small Claims Procedures of the Subordinate Courts Rules 1980.
You must be thinking, “Wah, this must cost a lot of money leh”. Well, hold that thought.
A small claims procedure is different from suing someone. If the debt is, for example, RM3,500, it doesn’t make any financial sense for you to pay the legal fees (which will cost you more money) to engage a lawyer. And, don’t get us started on the mind-boggling lengthy process.
But with small claims, you don’t need a lawyer when starting a small claims procedure because it’s simply not allowed. Having said that, you and the other party may consult a lawyer outside of court. As for the process, we reckon that it’s way simpler than the traditional suing of people.
So How Do I File this Small Claims Procedure?
1. Go to the nearest Magistrate Courts. Look for the information counter at the court and ask the clerk, “Hello, where can I get the Small Claim form (also known as Form 164)?”. It’s FREE.
2. Then, fill the form NEATLY according to the instructions - your name, IC number, address and the same details for the person against whom the claim is being made, known as the defendant (the client). You (the plaintiff) will also need to fill the details about the claim and important facts leading to this matter.
3. Once done, sign the form and hand it over at the registration counter. There will be a small court fee to be paid, which will cost you about RM30.
4. The form will then be sealed by the court, and the hearing date will be fixed. The sealed form, now a writ (a legal order), will need to be sent to the defendant (your client) by hand or registered post. We recommend you to use registered post (Pos Ekspres) as you need the proof of delivery. This will cost you around RM3 to RM4.50 depending on the weight and thickness of the document.
Okay, What’s Next?
5. After that, your client will have to respond to the claims. If your client chooses to be kiasu and denies the claim, he/she needs to file Form 165 and explain why they refuse to pay.
6. During the hearing of the small claim, you’ll have to prove your claim against the client. The process includes submitting documents and oral testimony from both parties - the plaintiff and the defendant. For example, if you’re a freelance graphic designer, you’ll need to have documents such as the agreed quotation, the invoice and a copy of your completed work. Your client will need to provide the same evidence as well. If you don’t have a proper contract of service, you can use the emails/texts between the both you that contain needed facts as evidence.
7. After hearing from both parties, the magistrate will then make his/her decision, either to allow or dismiss the claim.
8. If your client offers to settle out of court before the hearing and you feel that you can trust the person after all the things you’ve gone through, you can accept by writing an acceptance letter to the client. Don’t forget to send a copy of your letter to the court. Your case is then considered withdrawn. A word of advice: Don’t fall for that sob stories.
9. In the case where your client isn’t present at the hearing, the court may give judgement for you. Yay!
10. If you win the case, the magistrate will award you either the whole claim or part of it. You can also claim for costs (such as the court fee and the registered postage) not exceeding RM100.
But, What If The Client STILL Don't Pay Up?
11. If your client still refuses to pay up, you can go back to the Magistrates' Court and file your case, using Form 174 for FREE. The process is the same as the first time you file the case. Send the notice to your client using registered post.
12. Your client will have to appear in court on the appointed date to show cause unless he/she settles the debt within 10 days of receipt of the notice. If the defendant does not appear in court as ordered, a warrant of arrest will be issued by the Magistrate.
13. In court, the Magistrate has 3 options to deal with your client:
- Give the defendant more time to settle the judgement or allow payment by instalments.
- Order a writ of seizure and sale. This means a bailiff will assess the defendant's goods, seize them and auction them off. The proceeds will then be used to cover the debt.
- Order your client to be imprisoned.
What Other Situations Can You File a Small Claims?
Besides not getting paid for your freelance work, you can also file a small claims to get refund money for damaged goods, claims for commissions due, payment of services rendered, facilities supplied, or repairs undertaken; or when your friend pinjam your money, but buat bodoh when you ask for it - don’t play play.That being said, before you proceed with your claims, you should first send a final letter to the other party, threatening court action and set a time limit for the other party to pay compensation or reimbursement. If that doesn’t work, go ahead and proceed to file your case in court like a boss.
