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Small Claims Limit Due to Rise

13th March, 2013

At the moment, any claim (that does not involve personal injury) which is valued at less than £5,000 is deemed to be a ‘small claim’ and will be dealt with by the ‘small claims court’

The fundamental element of the small claims court is that there is no recovery of legal fees. Most will be aware that, in litigation, usually the ‘loser’ will pay the ‘winner’s’ legal costs. That doesn’t happen on the small claims court, were the usual rule is that each party bears its own costs, with the exception of reimbursement of court fees.

The idea of the small claims court is to encourage people to represent themselves in lower value cases, on the basis that it would be not worth making a claim for £1,000 and winning your case, if you have had to spend £1,500 in legal fees!

Generally, the small claims court aims to deals with cases quickly and less formally. It is meant to be user friendly. This is not always the case however, and many still seek the assistance of legal experts when dealing with such cases. At the end of the day, many litigants simply do not feel that they have the knowledge or the expertise to deal with legal proceedings. Even the small claims court has strict procedural rules which many are not aware of, non-compliance of which can impact of the outcome of the case.

As of 1 April 2013, the small claims limit will increase from £5,000 to £10,000. Generally, the higher the value of a claim, the more complex it is likely to be and there is, therefore, the greater need for legal advice and representation. The increase in the limit, and the lack of recoverability of costs, however, may result in many feeling that they have no choice but to represent themselves.

Delays in Court proceedings in small claims matters are often because people representing themselves are simply not familiar with the process or understand their obligations, which can be frustrating for all involved.

Litigants in person may not only be unsure of the procedural aspects of litigation, but also as to the legal merits of a particular claim. Given the increase in the limit, it is likely that small claims court will start dealing with more complex matters, the sort of matters where legal advice and/or representation may prove invaluable.

As such, if you consider that you have a claim valued at between £5,000 and £10,000 it may well be worthwhile to issue it at Court before the end of the month to avoid the small claims court and be in a position where you can seek legal advice, with the possibility of recovering the costs from the other side.

If you are looking for advice on any litigation matter, even if it is a small claim, please contact John Devoy at [email protected] or call 01244 405523.

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