An IUC is just an interview where investigators try to get information concerning questions they have unanswered and to allow the other side to put across there side of the story.
It goes from them to a decision maker and they are the ones that say court, admin+repay or simply to repay.
FYI: normally anything below £4000 is normally a repay+admin charge and the reason for this is that they get the money back + cover the costs in getting it back which is a win win for them, in general it's the stubborn ones and the ones that have deliberately done it and then try to cover it up and make the investigators job harder that they are more likely to pursue in court.
If they go to court they may get some court costs but in general these will not give them as much as a admin + repay result does.
You also have to look at it this way, the quicker they can get the low figure overpayments/claims out the way the more time they have for the big fish that are deliberately defrauding the country. If you can be seen to be cooperating with them as much as possible then the chances are they would be more inclined for the repayment option.