UK: Managing Small Claims

Once a defence is filed with the court, the court will issue an allocation questionnaire asking for information about the claim, which needs to be returned to the court within 14 days. Where the claim is £5,000 or less, the court will allocate the case to the small claims track.

The court will then send out an "allocation notice" to both parties, allocating the claim to the small claims track together with directions.

The court will normally provide standard directions (a timetable setting out the steps to be taken by the parties to get the case ready for trial). This will usually include directions for each party to file and serve copies of all documents on which it intends to rely at the hearing no later than 14 days before the hearing and fix a date for the final hearing (within weeks not months).

There are also "standard directions" for particular types of claim; for example building disputes and other contractual claims, landlords claims for damage caused by tenants. The court has discretion to call a preliminary hearing, but will try to avoid doing so unless exceptional circumstances apply.

The court can now propose that the claim be dealt with on paper without a hearing, and assuming that both parties consent, the court will make a determination. The court will look to do this if:

• it can be decided solely on the basis of the documents provided; and
• where it would be disproportionately expensive for the parties to attend.

If a determination is made in this way, neither party can apply to set it aside.

Any of the parties may also give written notice that they may not be able to attend. In that case, the court will take into account the statement of case and any documents filed. Again that party would not be able to set aside the court's determination.

By the nature of the small claims track, the normal rules of disclosure and evidence do not apply. However, previously an application for summary judgment (i.e. early judgment) could not be made in small claims arbitration. Now such applications can be made. Although it is not necessary to do so, where the directions are simple and the final hearing date promptly given it may be cheaper and quicker to apply for summary judgment. For example, where it may be expensive to collect and collate evidence for a final hearing.

The court may adopt any method of proceeding at the hearing it considers fair, but the following is a guideline as to how the hearing is likely to be conducted:

• strict rules of evidence do not apply
• a party may represent himself (for companies this includes a director or other suitable employee) or may be represented by a solicitor/barrister or a lay representative (but in that case usually only if the party is also present at the hearing)
• evidence that is given need not be taken on oath
• the court may limit cross-examination
• expert evidence can only be given, either orally or written, with the permission of the court
• the hearing will be informal and is to be in public
• the hearing will usually be decided by a district judge (or deputy district judge)

There is a very limited right of appeal.

Legal fees or fees charged by a lay representative cannot be recovered. However the winning party can recover:

• the issue fee paid by a claimant on commencement of proceedings
• any claimant’s solicitor’s fixed costs allowed on issue of proceedings
• any costs that the court may assess summarily where a party has behaved unreasonably

The court also has a discretion to award costs for:

• the reasonable travelling expenses of party or witness
• loss of earnings of a party or witness (maximum of £50 per day)
• expert's fees (maximum £200 per day)

We can help with your small claims cases. By providing you with estimates of the likely cost of each stage, you can decide how much input you would like from us. With the limited recovery of legal costs in small claims track cases, it may not be appropriate for you to instruct Solicitors to manage the whole claim. Assistance in framing the claims and representation at the final hearing may be worthwhile, particularly in high value small claims.