Although the small claims court is a simple way to settle a dispute, it should only be used as a last resort.
You must try to resolve the problem before it goes to court. Only if this proves impossible, should you consider court action.
The answer is true. Read on to find out more.
When to use the small claims court
You can use the small claims court for most breach of contract claims.
This means the small claims track process can be used for many consumer problems ranging from unfairly issued parking tickets to retailers who refuse to take responsibility for their faulty goods.
There is a small claims track limit. From 1 April 2013, the total you can claim in England and Wales has risen to £10,000. In Scotland and Northern Ireland it's £3,000.
There are a couple of key exceptions to this. You can't claim up to this amount for housing disrepair or personal injury, both of which will stay at £1,000.
These changes will apply to all claims issued on or after 1 April 2013.
But, even if your claim is within the claims limit, a judge may decide that a case cannot be heard as a small claim if the case is believed to be too complex.
Changes from 1 April also mean that you are referred to a mediation service before you proceed with a small claims court claim in England and Wales.
This is to improve awareness of Alternative Dispute Resolution and encourage parties to use it, so all small claims will be automatically referred to mediation.
This does not mean that mediation is mandatory, but a mediator is contacted to establish whether mediation would be suitable for your case.
For the hearing itself, the mediator will ensure that both parties are aware that the process is not a judicial hearing and that the mediator will not take sides but take a neutral role.
There will also be provision to allow parties in low value small claims cases to choose whether their small claim is determined on paper, without the need for a court hearing, but only if the judge agrees that it is appropriate.
The outcome of the mediation could be something other than money - possibly an apology or an agreement for a trader to return and do the faulty work again.
You are not legally bound to the outcome of mediation, but if you unreasonably refuse to accept mediation, or are unreasonable in the conduct of the case, then this could result in cost penalties being made against you. This would be at the discretion of the judge.
- Going to the small claims court should be a last resort
- Since 1 April 2013, the small claims track limit has increased to £10,000 in England and Wales.
- You can claim up to £3,000 in Scotland and Northern Ireland
- Find out how to use the small claims court
Small claims court limitations
If your claim is above the small claims track limit, or a judge decides that you cannot use the small claims court, you will have to use the full county court.
This is much a more complicated process, can be more costly and can take a lot longer. And, you'll also normally need a solicitor to prepare your case.
It's worth noting though, that your car or home insurance policies may have legal expenses cover.
This means they could pay for your legal costs to take action in the full court for certain types of cases. Check your policy for details.
How much will it cost?
Using the small claims court should cost you relatively little. This is partly because you put the case yourself, so you don't have to pay for a solicitor.
You're required to pay in the fees needed to take a claim through the small claims course in advance.
The total amount you could have to pay depends on the amount you're claiming for, and whether you're in England, Wales, Scotland or Northern Ireland, and how far your claim goes through the court process.
The most you should need to pay in England and Wales for an issue fee to start a small claims court action is £455. A hearing fee, if the dispute goes all the way to court, is £335.
Your overall fees should not exceed £790.
You may also have to pay for an expert to provide evidence to support your case. For example, a mechanic to say that a fault in your car shouldn't occur in a car of that age.
If you win, the defendant will have to pay these fees on top of the amount you're claiming for.
The upper limit of the amount that can be recovered for expert's fees in a case allocated to the small claims court track has increased from 1 April 2013.
An upper limit of £750 has been introduced, replacing the previous limit of £200.
This change is to be welcomed, as independent expert reports often exceed £200.
However, do remember to keep your expert fees proportionate to your claim.