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"Have they really not heard of the small claims court?"

The mythical 'small claims court' doesn't exist, it's just one of three tracks in the County Court, where claims of £10,000 or under are allocated, and claims on that track are subject to limited costs rules, which do not normally allow for legal costs to be recovered against the losing party.

But that doesn't stop some firms (those dodgy private parking companies again, and the bottom-feeding solicitors who act for them), trying to abuse the process, and claim £000s in 'costs'.