How a Civil Case Runs in the NSW Local Court: Key Steps

If you are wondering how a civil case runs in the NSW Local Court, the process follows a set path from the first document filed to a final hearing. Knowing the steps helps you plan, budget and avoid costly mistakes, whether you are the person making a claim or the person defending one.

What the Local Court can hear

The Local Court of NSW deals with civil disputes about money or property, such as unpaid invoices, loan disputes, damage claims and services not provided. Its civil work is split into two divisions:

• Small Claims Division: claims up to $20,000. Proceedings are less formal and the rules of evidence are simplified.
• General Division: claims over $20,000 up to $100,000. Proceedings are more formal, with evidence given by witnesses before a magistrate.

Claims above $100,000 generally belong in the District Court or Supreme Court. The Local Court decides civil cases on the balance of probabilities, which means the claim must be more likely true than not.

Step 1: Before you start a claim

Most disputes should not begin with a court filing. Before commencing, it is usually sensible to gather your documents (contracts, invoices, emails, photographs), work out exactly what you are claiming and why, and send a written letter of demand setting out the amount and a reasonable deadline for payment. A clear letter can resolve the matter early, and it shows the court you tried to resolve things sensibly.

Time limits also matter. Many claims must be started within a limitation period, which varies with the claim, so get advice promptly if a deadline is close.

Step 2: Statement of claim

A civil case starts when the plaintiff files a statement of claim. This document names the parties, sets out the facts relied on and states what the plaintiff wants, for example payment of a debt or damages. The claim must then be served on the defendant in the way the court rules require.

Step 3: The defence

A defendant generally has 28 days from service of the statement of claim to file a defence. The defence responds to the allegations, says which are admitted or denied and gives the defendant's version of events.

Do not ignore a statement of claim. If no defence is filed in time, the plaintiff can ask the court for default judgment, which can be entered without a hearing. If you have missed the deadline, get advice immediately, as it may be possible to apply to set a default judgment aside.

Step 4: Case management in the General Division

General Division matters are actively managed by the court under its Civil Practice Note (Practice Note Civ 1). The matter is listed for a first call-over after the first defence is filed, and at that stage the court gives directions to move the case towards hearing. Directions commonly set dates for filing evidence, producing documents and issuing subpoenas.

The court may also refer the matter to mediation or arbitration. Failing to comply can lead to a defence being struck out, proceedings being dismissed or a costs order.

Step 5: Mediation and settlement

Many civil claims settle before a hearing. The court can refer a matter to mediation, with or without the parties' consent, and parties can also negotiate directly or through their solicitors. Settlement offers can have important costs consequences, so get advice before accepting or rejecting one.

Step 6: Pre-trial review and hearing

Before a General Division hearing, the court generally lists a review at least eight weeks before the trial date under the Local Court practice note. The court uses it to check that directions have been followed and the parties are ready.

At the hearing, each side presents its evidence and arguments, and the magistrate decides the case and gives judgment. Preparation is the key task.

Step 7: Judgment, costs and enforcement

If you win, the court will usually make orders for payment and may also order the other side to pay some of your legal costs. In general, costs follow the event, meaning the unsuccessful party ordinarily pays the successful party's costs, unless the court orders otherwise. Costs recoverable in the Small Claims Division are more limited than in the General Division, so the cost of running a smaller claim can outweigh the benefit.

A judgment is only a piece of paper until it is enforced. If the other side does not pay, there are enforcement options, including seeking an examination about their assets and issuing a writ for the levy of property or a garnishee order over wages or bank accounts.

Frequently Asked Questions

How long does a civil case in the NSW Local Court take?

It depends on the complexity of the dispute and whether it is defended. The court's own practice note says it aims to resolve most General Division matters within months rather than years, but defended cases with many witnesses or documents can take longer.

What happens if I ignore a statement of claim?

The plaintiff can apply for default judgment against you without a hearing. That judgment can then be enforced against your assets or income, so you should respond within the time allowed or seek advice straight away.

Do I need a lawyer in the Local Court?

You are not required to have one, and many people represent themselves, particularly in the Small Claims Division. General Division matters are more formal and technical, and a solicitor can help with pleadings, evidence and settlement strategy.

Can I recover my legal costs if I win?

Often you can recover part of your costs from the losing party, because costs generally follow the event. You will not usually recover everything you spent, and costs in the Small Claims Division are more limited.

This article is general information only and is not legal advice. Laws and processes change, and every situation is different. Speak to a lawyer about your circumstances before you act.