Recent changes to the Civil Procedure (Amendment) Rules 2013 are affecting the way solicitors and litigants approach cases concerning the management of costs.
The recent changes include the small claims track limit being increased from claims valued up to £5,000 to claims valued up to £10,000 (except in personal injury cases). To many, this may not sound like a significant change, but it affects smaller businesses and individuals, where the loss or potential loss of up to £10,000 can be extremely damaging.
Small claims are subject to certain rules, such as being heard in the defendant’s local county court, as well as the ‘no costs’ principle; meaning that the successful party, claimant or defendant, cannot recover their legal costs from the other side, except for very limited fixed costs, upon the conclusion of the matter.
This is supposed to encourage the parties to settle at an early stage and, if the matter cannot be settled, then it is assumed that as the claim is worth a ‘small’ sum in litigation terms it will not be complicated in legal terms. Of course, this is true in many simple debt cases; but just because a claim is not worth a substantial sum, it does not mean that it is less complex than one worth several million pounds.
The knock-on effect of these rules will be that if a small business or a private individual has a claim worth £9,750, then they might not consider it commercially viable to instruct solicitors, as they will not be able to recover their costs even if successful.
So they will be left with the option of either litigating the matter themselves – which is obviously time-consuming and challenging for those without legal expertise – or simply not pursuing the matter.
These rules were obviously brought into force to ease caseloads and make the county courts more efficient. But with the rules potentially attracting more litigants in person they may well do the opposite.
Max Robinson, Gordon Dadds, London W1