I agree about paypal ... not keen at all.
For the US guys, we use different words from you and have a simplier process.
We call it a small claims
See here
http://www.hmcourts-service.gov.uk/i...aims/index.htm
The bottom line, you need the UK address and if he/she does not defend, you win ... it costs more to send baliffs but they are not always sucessful.
The only 'harm' this will do to the defendant, it will stop him/her from obtaining any credit, as this will be register as a County Court judgement on their credit history.
The credit history is becoming more and more important to the UK consumer. Bad history will cause a decline of mobile phone contracts, changing gas/elctricity supplier, new credit cards, unsecured loans, interest free loan deals, car loans etc etc ... it is normally very bad news and causes lots of problems.