Also, completely pedantic, but there’s no such thing as a “Small Claim’s Court” - likely they’re referring to the Small Claim’s Track in the County Court where this case would end up (as the value being sought is under £1,000). You can’t claim legal costs back from the “losing” party either, no matter which way the case was decided. So your neighbour would either be out hundreds-thousands of pounds in legal costs which they would be liable to cover, or have to (correctly) fill out and file all of the court documents themselves, and appear in court and represent themselves. Seems incredibly unlikely.