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From 1 April 2013 the Small Claims Track limit increased from £5,000 to £10,000. This will mean that for any claim of £10,000 or under it will not be possible to recover the majority of your legal costs. It is likely that claims of up to £10,000 may have complex legal issues and that you will want a solicitor to assist you with drafting the claim form or the defence if you feel are being wrongly pursued for a debt.
It may seem unfair that you are not able to recover your costs as it is not always possible or practical to deal with a small claim yourself.