Expansion of Small Claims Limit

1st April 2013 – Small Claims Limit increases from £5000 to £10000; it could cost you financially not to issue a claim of between £5000 – £10,000 before this date!

Many cases that we help clients with are for debts / unpaid invoices of between £5000 – £10000. These cases have previously been allocated to the Court’s Fast Track.This has meant that if our client’s case were defended and our client won, they could recover our legal fees from the losing party.

In Small Claims matters, the Court limits the amount of legal fees that are recoverable from the losing party. This is called fixed fee recovery. The amount of the fixed fee recovery that a winning party can claim is linked to the value of their case.

It is believed that after 1st April 2013, the fixed fee a client will be able to recover from the losing party, on a debt of between £5000 – £10000 is £100.

The legal fees for pursuing a claim of between £5000 – £10000 will inevitably be more than £100. This is particularly true where the debt is disputed!

If you wait to issue a claim, for a debt of between £5000 – £10000, until after 1st April, there will be an increased irrecoverable cost to you. Where the claim is defended, this irrecoverable legal cost may be hundreds or even thousands of pounds depending on the complexity of the case.

If you or your clients have a debt of between £5000 – £10000, it is well worth issuing your claim before 1st April 2013 so that you can recover a greater amount in respect of the legal costs associated with pursuing the claim.

 

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