/ Money

Would you take a dispute to a small claims court?

Woman looking confused with question marks above head

Want to settle a dispute without lawyers in a friendly environment? Good news – the value of disputes that can be settled by the small claims court is set to triple next year, so many consumer transactions will qualify.

So, ministers are proposing to increase the small claims limit from £5,000 to £15,000 from next April.

On balance, this has to be a good thing. After all, prices are going up so why shouldn’t the small claims limit go up as well?

Purchases often top £5,000

Consumer transactions today are increasingly exceeding the £5,000 limit. It’s becoming more common for people to spend over £5,000 on home improvements, holidays and cars. Substantial purchases, like installing double glazing, wouldn’t be covered by the £5,000 limit, but would certainly fall within this new limit.

In today’s difficult financial climate, we’re more likely to complain if there is a problem. But some people are left in a quandary when they realise it could cost them just as much money to instruct a solicitor to pursue their claim because it’s outside the current limit of £5,000.

One of the reasons consumers are willing to take cases through the small claims process is because they aren’t exposed to the other side’s costs.

Faced with making a decision based on costs and risk, many people cave in and decide against any action. Raising the limit will provide greater access to justice for more people. They will be able to pursue their claim without having to instruct solicitors, which will be a welcome change for some!

Is less more?

On the other side of the scales though, there is a risk that by raising the limit too much, some could end up losing out. At the current limit, it isn’t usually proportionate for businesses to instruct solicitors for claims below £5,000. So many businesses will either send a representative from their office to defend the claim or settle before the hearing.

If that limit were to change to £15,000 then the costs of instructing solicitors may become more proportionate for businesses to pursue, putting consumers in a different dilemma. With a higher amount at risk for businesses, it will be more cost effective for them to pursue or defend these higher value claims.

Despite the fact that the businesses still can’t ask for their costs even if they win, they will be more likely to instruct solicitors to act for them. Being up against professionals may be too much pressure for consumers to face.

I guess the real question is, ‘Is less more?’. Have you ever used the small claims court – or would you be more likely to if the limit is raised to £15,000?

Comments
Member

£ 15,000 for claims would be GR8 for those whom wish to persue anyone in the small claims court.

Member
Edmund Fitch says:
3 June 2011

Yes. Yes. Yes, the limit has been far to low for too long. This is practical affordable justice. Too many claims are neglected as they are above the limit (at present) and legal costs make claiming too expensive. The law of retribution and justice is for the rich not for the Middle Britain

Member
John says:
5 June 2011

Does the change apply to Northern Ireland?

Member

Hi John, the proposals only relate to England and Wales, not Scotland or Northern Ireland which are separate legal jurisdictions (and which have different small claims limits i.e. Scotland £3,000 and N.Ireland £2,000). Thanks.

Member
john.mccolgan says:
7 June 2011

Having used the small claims procedure twice, I welcome the raising of the limit, I just hope Scotland follows the example

Member
john.mccolgan says:
7 June 2011

I would encourage any member contemplating going to small claims to invest some time by attending the public seats in court to listen to the cases being dealt with. A couple of mornings spent in court will be invaluable to help settle your court nerves. There are plenty of on-line sites where procedural procedures can be swotted up on. The clerk of the court is also a good source of advice when u file your initial application. Good luck, give it a try, I loved it and I won on both occassions. Be factual and not emotional

Member

Twice I’ve used the online system: https://www.moneyclaim.gov.uk/ once to claim a laptop battery was not fit for purpose and once because my previous accountant had grossly overcharged me. Both settled out of court. I loved it!

Member

Your comment that firms might be more likely to defend £15,000 actions is not really relevant – at the moment most people could not even afford to bring an action for £15,000, as it could not go to the small claims court. The proposed increase should be welcomed.

Member
Robert hurlow says:
10 June 2011

The current limit is definitely too low. It sometimes means that a claim has to be kept down to qualify, and full compensation may not be achieved even if fully justified. The dangers of losing in a higher court and paying expenses is too great a risk for most.

Member
David Satchell says:
15 June 2011

In my experience as a regular court user (small claims and fast track) the issue is not in securing the judgement but in getting payment. Court fees for enforcement procedures are not insubstantial and the procedures themselves are often (especially in the case of bailiffs) ineffectual. Even defendants complain that the additional court fees can add considerably to their debt (although if some would just pay up or stick to agreed payment arrangements they wouldn’t be in that situation in the first place).

Member
john.mccolgan says:
15 June 2011

I totally agree with David’s point about the obtaining the decree being just the first stage. Whilst fiscal recompense is important (and in some cases you’re floggin a dead horse) one aspect which should not go undervalued is the good old fashioned base instinct of “I won” That lovely feeling you get in court when the Magistrate / Sheriff comes down on your side is priceless and is so flavoursome when u relpay it over in your mind in bed. Ha Ha!

Member
Chris Nation says:
6 July 2011

I used to use the SMC not infrequently when I owned a boatyard. Non-payment of mooring/storage fees was the usual problem. Having ones paperwork in apple-pie order is essential. Then it becomes a formality. In most cases, I had the plaintiff’s boat ashore, so, without actually preventing him taking it away before settling, he knew that I would simply refuse to crane it afloat or onto transport.

If the complaint is against services rendered or not, the thing about having seamless and detailed documentation really is crucial.

Member
Chris Nation says:
6 July 2011

I used to use the SCC not infrequently when I owned a boatyard. Non-payment of mooring/storage fees was the usual problem. Having ones paperwork in apple-pie order is essential. Then it becomes a formality. In most cases, I had the plaintiff’s boat ashore, so, without actually preventing him taking it away before settling, he knew that I would simply refuse to crane it afloat or onto transport.

If the complaint is against services rendered or not, the thing about having seamless and detailed documentation really is crucial.