Small Claims - to issue or not to issue?

 

As a Trainee Solicitor in Tolhurst Fisher’s dispute resolution department, I often receive queries from individuals and companies regarding potential claims which, due to their monetary value, are considered by the Civil Procedure Rules and the Court to be small claims.

The small claims limit was doubled from £5,000 to £10,000 in 2013.

While the courts may consider claims of this size to be small, individuals and companies may not see them in quite the same light.  These are significant sums for most individuals and certainly for small or medium sized businesses.

The problem with small claims is that legal costs are generally not recoverable, other than certain fixed costs which are very minimal in value.  Where claims exceed £10,000, the general principle is that the losing party pays the costs of the winning party (or at least a substantial proportion of them).

The fact that legal costs are not recoverable on small claims provides an individual or company with a conundrum as to whether or not to issue proceedings to seek to recover an outstanding debt. The options available are either to take a commercial view that the time, effort and potential expense involved in pursuing the debtor is simply not worth it or to ‘bite the bullet’ and issue proceedings. Unfortunately, the more savvy and unscrupulous debtors are aware of the costs implications in issuing proceedings on small claims and often use this to their advantage in attempting to avoid repaying debts that are clearly due and payable.

For those that do proceed with a claim, there is yet another decision to consider - whether or not to instruct a solicitor to act and incur non-recoverable legal fees or to act as a litigant in person.  

At Tolhurst Fisher LLP we can assist you with small claims matters by fully discussing and exploring your options and being as flexible as possible taking into account your specific requirements.  We can agree a fixed fee with you to act on your behalf and deal with everything relating to the claim.  Alternatively, we can assist you by agreeing a bespoke approach to your claim such as drafting the necessary court documents and providing advice generally if you decide to deal with the claim yourself.

 If you do require advice or assistance on a small claim, do not hesitate to contact the experienced dispute resolution department at Tolhurst Fisher LLP.

Danny Turpin

dturpin@tolhurstfisher.com