May 4, 2018

How To Recover Small Debt Claims In Lagos State | Adedunmade Onibokun





A friend once wanted to recover the sum of N35,000 (Thirty – Five Thousand Naira) which had been erroneously deposited into a wrong bank account. Due to the inability to locate the account owner, my friend was informed by the bank that only via a court order could the payment be reversed, hence leading to my friend calling me for help. Would you believe it cost over N5,000 (Five Thousand Naira) to institute a court proceeding at the Magistrate Court and effect service on the Defendants? Leaving my friend with N30,000 (Thirty Thousand Naira) as the value of the sum sort to be recovered.


Sometimes, the value of the sum sort to be recovered could be much higher, for instance N500,000 (Five Hundred Thousand); N3,000,000 (Three Million Naira) or N5,000,000 (Five Million Naira). No matter the amount, a creditor will usually be required to pay legal fees, most especially if a lawyer is instructed or one proceeds to court as an option to recover the debt owed.  More often than not, creditors find the legal and other fees paid to recover a debt as too high. Also, the long period of time associated with court proceedings further discourages such creditors and many usually choose to petition the police as an option of recovering the sum. Though the police do not have the jurisdiction to act as debt recovery agents except the petition also includes allegations of fraud or deceit.

This high cost of litigation suffered by creditors especially those seeking to recover small sums, instigated a cry for a small claims court with a mandate to address the issues of high cost of litigating small claims and abridge also time of litigation. Thankfully, the Lagos State Judiciary has established such a court with the introduction of the MAGISTRATES’ COURTS LAW PRACTICE DIRECTIONS ON SMALL CLAIMS 2018 by Hon. Mr. Justice Opeyemi O. Oke, Chief Judge of Lagos State on 24th April, 2018. 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.

The Small Claims Practice Direction is novel in that it provides in Article 12 (2) that the entire period of proceedings from filing till judgment shall not exceed sixty (60) days) and for matters to come under this provisions it must have the following elements as stated in Article 2 -  

(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 N5,000,000 (Five Million Naira), excluding interest and costs.

(e)     The Claimant has served on the Defendant, a LETTER OF DEMAND.

The Practice Direction also recognizes in Article 10 that 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.

This is good news for businesses and persons in Lagos seeking to recover sums below N5, 000, 000 (Five Million Naira) at the Magistrate Court as it reduces the cost of litigation and abridges the time spent in court. To institute a proceeding for debt recovery according to the Small Claims Practice Direction, one may a fill the Small Claims Complaint Form and file same at the Magistrate Court. For further information on how to take advantage of the new practice direction in recovering your debt, you may consult a lawyer or visit the Registry of the Magistrate Court.


Adedunmade Onibokun

Principal Partner


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