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Changes to small claims - be aware

Are you owed money by a customer? Do you have an invoice that has been outstanding for some time? If the amount that you are seeking to recover is more than £5,000 but less than £10,000 you should consider acting now and starting Court proceedings if you want to be able to recover your legal costs, as Gemma Cook explains.

The Small Claims Track limit currently stands at £5,000. This means that if you are owed £5,000 or less and want to start court proceedings the case will usually be treated as a 'small claim'. The idea is to enable a party who cannot afford legal costs to deal with the matter themselves. The general rule is that even if you are successful in your claim it is not possible to recover the majority of your legal costs if you choose to instruct a solicitor. This may seem unfair as it is not always possible or practical to deal with a small claim yourself. Solicitors can offer assistance on a fixed fee basis to help you with any tricky legal issues or to make sure you get the initial paperwork right.

From 1 April 2013 the Small Claims Track limit will increase 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 is vital to ensure that the claim form is correctly drafted as this document will form the entire basis of your claim. If you start a clam for between £5,000 and £10,000 now then you should still be able to recover the majority of your legal costs from the losing party. You may need to deal with enforcement of the judgment if payment is not forthcoming and Glanvilles can advise you as to the options available. If you wait until after 1 April 2013 you will only be able to recover limited costs which will not equate to the actual costs incurred.

Following the changes on 1 April 2013 Glanvilles will be able to offer you fixed fee prices to deal with specific aspects of any small claim in order that it can still be cost effective for you to obtain advice.