What is a “small claim”?
A small claim is a claim that is allocated to the small claims track, a simplified court procedure that is litigant in person friendly. Hearings are informal and the usually strict rules governing the use of evidence do not apply. A good thing too, given the recovery of legal costs in the small claims track is rather limited. It includes, but is not limited to, fixed costs for commencement of the claim, court fees, loss of earnings for the party and his witnesses (capped at £90 per day per person) and expert witness fees (capped at £750 per expert). Since the cost of legal representation cannot be recovered, the small claims track often sees parties going unrepresented. Experts can only be used if allowed by the court – permission must be sought, and will only be granted if necessary.
Claims not exceeding £10,000 will normally be allocated to the small claims track, but the court will have regard to other factors, such as the complexity of the facts, law or evidence. When calculating the value of the claim, the court will disregard, among other things, any amount not in dispute, a claim for interest and legal costs.
There are other conditions. In personal injury claims, the financial value of the claim must not exceed £10,000, where damages relating to the actual injury must not exceed £1,000. For example, £700 for food poisoning and £8000 for damages relating to loss of earning for missing work (total £8,700). For residential housing disrepair claims, the estimated costs of the repair must not exceed £1,000, and the financial value of any other claim for damages cannot exceed £1,000.
Note that a small claim only comes to be during the allocation phase of a claim. The allocation phase occurs fairly late in the litigation process. First the parties will try to resolve the matter at hand without the aid of the court, using correspondence and, if appropriate, mediation. If the dispute is not resolved, one party will file a claim form at court, which begins the litigation process. If the defending party continues to contend the claim and files a defence, the court will serve a notice on each party to complete an allocation questionnaire. The parties stipulate which track they think the claim should proceed, taking into account the factors mentioned above.
Once allocated, the court will fix a date for the hearing and direct the parties to deliver to all parties and the court copies of all documents being relied no later than 14 days before the hearing. Other directions may be given. Even at this stage, the parties are encouraged to settle matters outside of court.
If the claim proceeds to the hearing, it will generally be held in public (but can be held privately if both parties agree). The court may limit cross-examination (questions to the other party) as it sees fit, and the judge himself may lead with questions. The judge will pass judgement, and will provide reasons for his decision, either at the time of judgement or later, orally or in wiring.
Words: Diogo Gouveia