At any point between serving the claim form to the defendant and allocation small claim hearing the parties can reach an agreement or settlement.
How small claim could be settled:
1. Defendant could pay amount as soon as get a claim form from the court. In this case defendant should notify court by filing court forms N9 and N9A. If claimant satisfies he would need to notify court about settlement via MCOL by updating claim status into account and send Notice of Discontinuance by filing form N279 according CPR Part 38.
2. Based on CPR 26.4 parties could ask the court the small claim to be stayed by filing Direction Questionnaire. It is the first option in form N180 where parties choose Free Phone Mediation service as way to settle case. If parties was agreed during phone mediation then such settlement must be in form N182:
Small claims mediation
3A.1 If a claim is referred to the Mediation Service pursuant to rule 26.4A or at the court’s direction, the settlement agreement must be in Form N182.
3. While small claim case is stayed or parties are awaiting hearing, defendant may sent a consent order which satisfy claimant. Consent order need to be accepted and sealed by the court. Defendant must to comply with it. After that small claim case is considered to be settled. Notice of discontinuance must be filed to the court.
Could be small claim settle at the hearing?
Court Procedure Rule Part 36 let parties to make offer to settle and take court permission even at the hearing. But part 36 CPR isn’t applicable to the case allocated at small claim track:
Extent to which other Parts apply
27.2
(1) The following Parts of these Rules do not apply to small claims –
…..
(g) Part 36 (offers to settle);
Settlement couldn’t be offered at small claim hearing if it wasn't reached before the trial. In this case, both parties should properly assess all small claim evidences and chances to win. Otherwise, there is a risk to pay hearing fee and get CCJ that affect credit rating.