The idea behind small claims is a sound one – for disputes of up to £5,000.00, soon to rise to £10,000.00, it is in no-one’s interests to incur significant legal fees which are disproportionate to the financial amount in dispute. In principle, the small claims court, which is not a separate court from the main County Court system, and in fact is simply part of it, makes a lot of sense.
What it does mean however is that, win, lose or draw the case, if either party employs a solicitor, those costs will be irrecoverable from the opponent.
The vast majority of civil legal disputes fall within the small claims court and this does present some difficulties. whilst the procedure for small claims is more streamlined than the rest of cases under the Civil procedure Rules, those rules still apply and of course non-lawyers will be wholly unfamiliar with them and using the courts generally. Many cases are also not straightforward in legal terms. For example, many people think that any form of breach of contract will result in damages to them, or perhaps with a sale of goods, a right to reject the goods, cancel the contract and get their money back in full. This is not the case. The consequences of a breach of contract in English law depend on the type of contract, the type and significance of the clause breached, the loss suffered and so on.
So, what to do if you have a claim and are unsure ? We would recommend, depending on the amount involved, top perhaps seek out limited legal advice. Within perhaps 2 -3 hours of lawyer time, you may be able to get an overview of how to use and understand the court process and a clearer opinion on the legal merits of your case, any problems or issues.
It is also definitely important to be aware that, in a commercial legal dispute starting a claim in the small claims court can have unforeseen consequences. If you sue another business and they may have a counterclaim against you, this could be for a substantially higher sum. If the counterclaim is asserted, the claim could then no longer be appropriate for the small claims court, either due to the value of the claims involved, or complexity, which would then mean your business is at risk on costs.
The small claims court does not include certain types of claims which are considered too specialist, involve important personal legal rights or are otherwise not suitable. A good example of this relates to claiming for a personal injury. This in itself has proved controversial since many low value claims for these types of claims result in costs which are wholly disproportionate to the value of the claim.