What it is, how it works and what Litigants need to know
When a claim is brought at court, the court will allocate it to one of three ‘tracks’; the small claims track, the fast track and the multi-track. The small claims track is supposed to be a proportionate method of dealing with straightforward cases of limited value. As you will see, this does not mean that the operation of the track is always fair.
The small claims track is governed by Part 27 of the Civil Procedure Rules.
When will a claim be allocated to the small claims track?
After a defence to a claim is sent to the Court, the parties to the claim will be sent an allocation questionnaire by the Court. Using this form, the parties will inform the Court of certain facts about the claim, including how many witnesses they intend to rely on, whether they intend to rely on expert evidence and how long the trial of the claim is likely to take. Using this information, along with the value of the claim as set out on the claim form, the Court will allocate the case to the appropriate track.
As a general rule, a case will be allocated to the small claims track when it has a value of not more than £5000. The exceptions to this rule are;
(a) In personal injury cases, the claim will only be allocated to the small claims track if the value of the claim as a whole is not more than £5000 and the value of any claim for damages for personal injuries is not more than £1000; and
(b) Claims by tenants against landlords for an order that the landlord carry out repairs will only be allocated to the small claims track if the estimated value of the repairs is not more than £1000 and the value of any other claim for damages is not more than £1000.
However, courts will also consider other facts in deciding what track to allocate a claim to, including its complexity, the number of parties, the amount of evidence required and the importance of the claim to the general public.
Accordingly, a straightforward claim following the breakdown of an agreement between two parties, with a financial value of less than £5000, will most likely be allocated to the small claims track.
How does the small claims track work?
The small claims track is designed to be quick and relatively uncomplicated. Accordingly, upon allocation to the small claims track, the Court will typically send to the parties a Notice of Allocation to the Small Claims Track. This notice will be endorsed with; a hearing date for the trial, an estimated trial length and details of the court at which the trial will take place.
The estimated trial length will usually only be a maximum of 2 or 3 hours. If longer than this is required to hear the case, it is likely that the case is too complicated/has too many witnesses to be properly dealt with on the small claims track.
The notice will often include a note that the judge who has allocated the case considers the case suitable for mediation. This is an alternative to trial that is often faster and cheaper, and is suitable for cases where the parties may be able to resolve their dispute relatively amicably. If the Judge does consider that this may be appropriate, he will direct the parties to contact the Mediation service and will provide their contact details.
The notice will also include directions; that is, the steps the parties must take in order to prepare their case for trial. It is very important that these directions are followed. Failure to do so may result in a party’s case being struck out or in the trial being delayed, with the party who has failed to comply with the direction being made to pay the costs caused to the other party by the delay.
Ordinarily, the directions the Judge will include in the notice will be standard directions. These are;
- Each party must deliver to every other party and to the court office copies of all documents on which they intend to rely at the hearing no later than 14 days before the hearing. (This includes Witness Statements)
- The original documents must be brought to the hearing.
- No party may rely at the hearing on any report from an expert unless express permission has been granted by the Court beforehand. Anyone wishing to rely on an expert must write to the Court immediately upon receipt of this Order and seek permission, giving an explanation why the assistance of an expert is necessary.
The notice will also remind the parties that if they are able to settle the claim, which is encouraged, they must notify the Court as soon as possible.
Witness Statements are among the documents that must be sent to the Court and to all other parties by no later than 14 days before the hearing. These documents are vital, as they are used, effectively, as the witness’ evidence in chief; other than to answer questions put by the Judge or another party, or to elaborate on something in the statement, the witness will not ordinarily be allowed to speak at the hearing.
If a witness attends a hearing without first filing a witness statement, it is likely that the Court will not hear the evidence of that witness. A party wishing to rely on the evidence of a witness who has not filed a statement may end up having to request that the case is adjourned, put off to another date, and may have to pay the other party’s costs of the adjournment.
The witness statement should clearly set out everything the witness believes is relevant to the case. The statement must include a Statement of Truth, confirmation that the maker of the statement believes the statement is true, and be signed by the person making the statement. A witness will be in contempt of court if they have knowingly made a false witness statement, verified by a statement of truth.
Witnesses must, in addition to filing statements, also attend Court for the trial. If they fail to do so, the Court may still take their statement into account, however, it may be given less weight by the Judge when he comes to make his decision.
Whilst often taking place in Judge’s Chambers, small claims trials are open to the public. Whether or not the trial will follow the usual format is up to the Judge, as it may not always be the most effective approach in cases where parties are unrepresented. That being said, it is useful to expect the trial will follow the ordinary format, which is as follows;
- Claimant’s opening speech, wherein the case is summarised
- Claimant’s witness evidence in chief
- Defendant’s cross-examination of the Claimant’s witnesses
- Claimant’s re-examination of their witnesses
- Defendant’s witness evidence in chief
- Claimant’s cross-examination of the Defendant’s witnesses
- Defendant’s re-examination of their witnesses
- Defendant’s closing speech
- Claimant’s closing speech
Please note that any of the above steps may be omitted, the Judge may step in with questions at any time, and the evidence in chief parts will usually be dealt with simply by the witness confirming that the statement they have filed with the Court was prepared by them and is true.
After the conclusion of the trial, the Judge will give his fully reasoned judgment.
The small claims track does not limit the use of legal professionals by either party, either in providing advice, preparing documents or representing them at trial. However, the Court may only award very limited costs unless the paying party has behaved unreasonably throughout the course of the proceedings. Unreasonable behaviour is not easy to demonstrate and is not exactly defined, but could, for example, include circumstances where a party files a defence but then fails to file any other evidence or to attend the hearing. This will be argument for the successful party to make to the Judge.
The Court may order that the winning party’s witness expenses are paid, that any court fees are reimbursed, and that expert fees (where permission has been given and limited to £200) be paid, but that only fixed costs be paid in respect of solicitor’s costs. In a claim worth between £1000 and £5000, this will be £80.
Despite the relatively straightforward nature of a small claim, a fair amount of time can be involved in preparing pleadings (particulars of claim/defences) and witness statements, not to mention corresponding with the Court and with other parties, or the actual attendance at Court for the hearing. Cases will often be ‘block-listed’ which could involve quite a bit of waiting on the day of the hearing. Given that solicitors charge hourly rates, the costs of a small claim will always exceed £80, usually by a very significant margin.
The same rule applies to Claimants and Defendants. As such, parties should consider very carefully whether they want to instruct a solicitor in respect of a small claim, when there is a risk that the costs of the claim may eclipse the amount they are claiming, or, in the case of a Defendant, seeking to avoid paying.