The number of small claims is rising and set to increase further under the Consumer Rights Act Court, yet paradoxically so are the court fees.

While the rationale for a non-subsidised judiciary is understandable, the voluntary nature of the ADR Directive merely pays lip service to the notion of there being a real alternative dispute resolution.

Without adjudicative ADR as a contractual remedy or a rise in the fee remission threshold, small businesses already impecunious through bad debts and late payments and consumers having spent their “hard earned” on faulty goods and services are left in a judicial cul-de-sac.

This is made worse by the rules which limit the recoverable costs in the small claims court, meaning most people and small businesses are left to navigate the process singlehandedly and without professional legal advice and support.

Consequently, mistakes happen and deadlines get missed leading to otherwise unnecessary N244 application notices currently costing £155 a time and set to rise to £255.

This is exacerbated by claimants and defendants running the risk of an adverse costs order for unreasonable behaviour, for reasons which include poorly pleaded statement of case, an exaggeration of a claim, inadequate supporting documentation or dishonesty.

Understandably there’s a lack of judicial guidance as to the circumstances and amount of unreasonable costs orders, removing the luxury for claimants and defendants alike to weigh up the risk of “trying their luck in court”.

However, contrary to the words of Del Trotter, “he who dares wins” would be “deny everything”; defendants and “have a go” claimants could end up with a pyrrhic victory.

This is illustrated by a recent unreported decision for a claim of £1,200 on which were asked to advise, where the judge made an unreasonable costs award against the defendant of £600 on top of the fixed costs.

That’s not to say that only fools and horses go to court, but rather it should a last resort and after taking legal advice on the strength of the claim and the risks, bearing in mind that a professionally drafted particulars of claim or defence can improve your chances and save you money. 

> Author: Philip Harmer (pictured) is a partner at Stormcatcher Business Lawyers based in Surrey. He is a lawyer, speaker and regular commentator on employment and business law