Small Claims change on 1 April 2013. So what?

Small Claims change on 1 April 2013. So what?

14:31 02 April in Blog, Commercial Dispute Resolution, Dispute Resolution & Litigation, Keith Hardington articles, Walker Foster

The upper limit is £10,000 (formerly £5,000) from ‘April Fools Day’ but this is no joke..

You can still benefit from legal advice without full representation and at reasonable cost.

Sometimes referred to by clients as ‘Small Claims Court’ the Small Claims Track is a less formal process by which the parties and the Court deal with proceedings. It is meant to allow access to justice without the need to involve solicitors and substantial legal costs. If successful you can recover fees for experts (now increased to £750) and court fees but you cannot recover the legal costs of a lawyer.

If you are involved in a dispute up to £10,000 you might want a solicitor’s assistance but you will have to pay for it (not the other side, even if they lose). This change emphasises the importance of agreeing fees with your solicitor and carefully agreeing the extent of their involvement. Such costs can be proportionate in a Small Claims track matter particularly near the new limit of £10,000.

How did we get to £10,000?

The Ministry of Justice issued “Solving disputes in the county courts: creating a simpler, quicker and more proportionate system” (Ministry of Justice CP6/2011).

Lord Justice Jackson (author of a report that has resulted in many changes to the civil justice system) responded on this issue. He said; ‘In relation to disputes involving individuals I have serious concerns about raising the upper limit to £10,000 or more. For the ordinary citizen £10,000 is a large (and possibly devastating) sum to lose through the operation of a rough and ready/ informal procedure. In my view, the upper limit should remain at £5,000. If that proposal is rejected, then my fallback proposal is that the small claims limit be increased to £7,500.’

The Judiciary also responded. ‘There is no doubt that the introduction of the small claims track has been a considerable success, providing a relatively simple, informal, procedure for the resolution of low-value claims, with the district judge being able to assist both sides with an interventionist approach and with the costs (save in cases where a party has behaved unreasonably) being fixed. The small claims track remains appropriate only for what are genuinely low-value, relatively straightforward cases. Furthermore, £5,000 is itself a significant sum for most citizens. To increase the limit would be to bring within the scope of the small claims track claims the outcome of which would have a potentially life-changing effect on those involved. We do not support an increase in the small claims track limit, but, if the limit is raised, it should not exceed £7,500.’

So the message was don’t increase the limit but if the Ministry of Justice insists on doing so then no more than £7,500. It’s £10,000!

For further advice please do not hesitate to contact Keith Hardington 01756 700200 [email protected]

Keith Hardington

[email protected]