LAGOS STATE SMALL CLAIMS COURT AND DEBT RECOVERY
By Ayoade Apelegan
Generally, Small Claims Court refers to special courts created by statute, with specific duties and powers. It is designed to provide a judicial determination of disputes involving small amounts of money quickly and cheaply, with or without legal representation.
It encompasses the routine collection of small debts, evictions and other disputes between landlords and tenants, as well as breach of contracts and simple torts.
Cases heard in small claims court are much less formal than trials in other courts. Small claims courts do not use juries, and as such, cases are decided by a judge or magistrate.
Going to a small claims court means;
- You will be filing your case, and
- You will be defending your case yourself.
You can take a case to a small claims court without the expense of an attorney.
You can only use the small claims court if the debt is below a specific amount. This amount varies for each state.
SMALL CLAIMS COURT IN LAGOS STATE
The Presidential Enabling Business Environment Council (PEBEC), a World Bank initiative, under the office of the Vice President on the ease of doing business in Nigeria, has as part of its reforms – ‘Enforcement of Contracts’- the introduction of specialized small claims commercial courts at the centre of the reforms. For this purpose, two states in Nigeria, Lagos State and Kano State were chosen as the pilot states to implement the reform initiatives.
On April 23rd 2018, Lagos State became the first state in Nigeria to establish a Small Claims Court. The Small Claims Courts are being established in all the Magisterial Districts in Lagos State.
The aim of establishing the Small Claims Court in Lagos is to provide easy access to an informal, inexpensive and speedy resolution of debt recovery disputes in the Magistrates’ Courts. The small claims courts are presided over by magistrates who hear and determine cases on debts claims not exceeding the sum of ₦5,000,000 (Five Million Naira).
At the inauguration of the Small Claims Courts, the Chief Judge of Lagos State, Hon. Justice Opeyemi Oke (RTD) said, “The Small Claims Court procedure is simplified in that every step has been reduced into standard forms which the claimant or defendant as the case may be, simply fills and files, i.e. letter of demand, complaint form, claim’s form/summon among others.”
“The entire hearing period from the first date of hearing, inclusive of the time allowed for exploring amicable from filing until the judgment is not to exceed 60 days.”
At the inauguration ceremony of the Small Claims Court in Lagos, 15 magistrates courts across the five judicial divisions of Lagos were designated as small claims court. The five judicial divisions include Lagos Island, Ikeja, Yaba, Badagry and Ikorodu.
Following the creation of the court, the Magistrates’ Court Law (Practice Directions on Small Claims) 2018 (“Practice Directions”) was issued by the Hon. Justice Opeyemi Oke (RTD), Chief Judge of Lagos State, as the regulatory framework for the take-off and smooth operation of the new regime.
The Practice Directions shall apply and be observed in the Magistrates’ Courts designated as Small Claims Courts and by the High Court when sitting over appeals from the Small Claims Courts.
PRACTICE DIRECTIONS OF THE SMALL CLAIMS COURT IN LAGOS STATE
The objective of the small claims procedure is to provide easy access to an informal, inexpensive and speedy resolution of simple debt recovery disputes in the Magistrates’ Courts.
COMMENCEMENT OF ACTION
- An action may be commenced in the Small Claims Court where:
(a) The Claimant or one of the Claimants resides or carries on business in Lagos State;
(b) The Defendant or one of the Defendants resides or carries on business in Lagos State;
(c) The cause of action arose wholly or in part in Lagos State.
(d) The claim is for a liquidated monetary demand in a sum not exceeding ₦5,000,000
(Five Million Naira), excluding interest and costs.
(e) The Claimant has served on the Defendant, a LETTER OF DEMAND as in Form SCA 1.
2. The action shall be commenced by Claim upon the completion of a Small Claims
Complaint Form as in Form SCA 2.
3. The Summons shall issue as in Form SCA 3 upon the Registrar is satisfied that the
requirements of 2 (1) above have been met.
MARKING AND PAYMENT OF FILING FEES.
Where a case satisfies the criteria in Article 2 above, the Assistant Chief Registrar or any person in charge of the Small Claims Registry shall cause the Claim to be marked “Qualified for Small Claims” and direct the Applicant to pay appropriate filing fees.
ASSIGNMENT OF SMALL CLAIMS FILES
Upon the marking of the Claim, the Assistant Chief Registrar shall within 24 hours forward the case files to the Administrative Magistrate for assignment to a Magistrate of the Small Claims Court.
The Administrative Magistrate shall within 24 hours of receipt of the case files assign the Small Claims files to a Magistrate of the Small Claims Court. Such case assignments shall be undertaken on a random basis.
SERVICE OF THE SUMMONS
The Summons shall be served by the Registry of the Small Claims Court within seven (7) days of filing by the Sheriff of the Small Claims Court.
Upon service, the Sheriff of the Small Claims Court shall file an Affidavit of service as in Form SCA 6 within 2 days of service.
The provision of the Magistrates’ Courts (Civil Procedure) Rules regarding the mode of service, except as provided herein shall apply to any process of whatever description issued by the Small Claims Court.
Where the Sheriff of the Small Claims Court is unable to serve the Summons on the Defendant within the time specified in (1) above, he shall file an Affidavit of Non-Service as in Form SCA 4 after the expiration of the time allowed for service.
In the event of (3) above, the Claimant shall apply for an Order of substituted service of the Summons on the Defendant by filling and filing Form SCA 7.
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FILING OF DEFENCE/ADMISSION/COUNTERCLAIM
Upon service of the Summons, the Defendant shall file his Defence/Admission or Counterclaim within Seven (7) days by completing Form SCA 5 as appropriate.
The provision of Article 5 on service of Summons shall apply to service of a Counterclaim.
Where a Defendant fails to file an Answer to the Claim, such Defendant may be held to have admitted the Claim.
If at the time the action is commenced the Defendant intends to claim against the Claimant a liquidated money demand not exceeding ₦5,000,000 (Five Million Naira) (excluding interest and costs) and which claim arises out of the same transaction or series of transactions, the Defendant shall fill and file a counterclaim form as in Form SCA 5 in answer to the Claim.
If at the time the action is commenced, the Defendant intends to claim against the Claimant a liquidated money demand exceeding ₦5,000,000.00 (Five Million Naira) but not more than ₦10,000,000.00 (Ten Million Naira) (excluding interest and costs), (which is the limit of the general jurisdiction of the Magistrate Court), the Defendant may file a counterclaim in the pending Small Claims action by filling Form SCA 5.
If at the time the action is commenced, the Defendant has a counterclaim that exceeds the general jurisdiction of the Magistrate Court, the Defendant may file the counterclaim, by filling Form SCA 5, PROVIDED that any Judgment in the Defendant’s favour shall be limited to the general jurisdiction of the Magistrates’ Courts.
In the event of (3) above, the Defendant/Counterclaimant shall be deemed to have abandoned the excess of the counterclaim.
The Defendant(s) counterclaim shall be limited to the Claimant(s) on record.
The Claimant may file a reply to the Defendant(s) Defence and Counter-claim within five (5) days of service of the Defendant(s) Defence and Counter-claim.
No pleadings after reply are allowed.
When the claim is called for hearing on the date fixed and neither party appears, the magistrate shall unless he sees good reason to the contrary, strike out the claim.
Where the claim is called for hearing and the Claimant appears but the Defendant does not appear, provided there is proof of service, the Magistrate shall proceed with the hearing of the claim and enter Judgment as far as the Claimant can prove his claim.
Where the claim is called for hearing, and the Defendant appears but the Claimant does not appear, the Defendant if he has no counterclaim, shall be entitled to an order striking out the claim, but if he has a counterclaim, the Magistrate shall proceed to hear the counterclaim and enter Judgment accordingly, as far as the Defendant can prove his counterclaim.
PROCEEDINGS AT THE HEARING
At the first appearance of the parties before the Court, the Magistrate shall promote, encourage and facilitate an amicable settlement of the dispute among the parties by mediating and providing settlement options to the parties as he deems fit. The process of mediating and facilitating amicable settlement of the dispute among the parties shall not exceed seven (7) days.
Notwithstanding 9(1), the parties are also encouraged to contact one another to settle the matter amicably or to narrow the issues. However, the court must
be informed on the hearing date if the case is settled by agreement before that date, and a consent judgment may be entered by the Court accordingly.
If parties are unable to settle the dispute amicably, the Magistrate shall hold a preliminary hearing to give directions for hearing of the claim or counterclaim (as the case may be) including a hearing time table, length of trial or hearing, exchange of witness(es) list, formulation and settlement of issues, as appears to the Magistrate to secure the just, expeditious and speedy disposal of the claim or counterclaim.
The hearing shall be conducted by the court from day to day as far as is practicable and may only be adjourned as a last resort and for the shortest possible time.
Adjournment can only be granted during proceedings in unforeseen and exceptional circumstances and a party may not be granted more than one adjournment during the entire proceedings.
The entire hearing period shall not be more than thirty (30) days from the first date of hearing, inclusive of the seven (7) days for an amicable settlement.
Parties may represent themselves at the proceedings in the Small Claims Court. Partnerships and Registered Companies can be represented by either a Partner, Company Secretary or any other Principal Officer of the Partnership or Company.
Parties may testify on their behalf and tender all necessary documents and they may call other witnesses to give evidence at the hearing.
The Magistrate shall endeavour to deliver judgment within fourteen (14) days of the completion of the hearing. The judgment shall include the Court’s determination of issues raised in any interlocutory application(s) filed by any of the parties.
The entire period of proceedings from filing until judgment shall not exceed sixty (60) days.
The judgment of the Court shall not be invalid because of the entire proceedings of the court having exceeding sixty (60) days.
The Magistrate shall endeavour to issue authenticated copies of the judgment immediately after its delivery but in any event not exceeding 7 days from the date of the delivery of the judgment.
ENFORCEMENT OF JUDGMENT
The Defendant or Defendant to counterclaim (as the case may be) shall comply with the Judgment and pay the Judgment sum within fourteen (14) days of delivery of judgment.
Upon default of the Defendant or Defendant to counterclaim to pay the Judgment sum within the time specified, the Judgment shall be enforced in like manner as any order of the Magistrate’s Court for the payment of money.
Where either party is aggrieved with the Judgment, such party shall fill the Appeal form, as in Form SCA 8 within 14 (fourteen days) of the delivery of the Judgment stating the reasons for the Appeal.
The Assistant Registrar of the Small Claims Registry shall compile the records of appeal within fourteen (14) days of the submission of Form of SCA 8.
The Records of Appeal shall thereafter be forwarded 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.
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 shall be by oral hearing of the parties and on the records of the appeal.
The whole Appellate Process from the assignment of the Appeal to Judgment shall not exceed thirty (30) days.
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