The last few years has seen a rise in consumer litigation with individuals taking on large corporations, insurers or banks.

In the majority of cases, these disputes are for sums of a couple of thousand pounds – a significant amount of money to most – but will often involve complex areas of law such as the provisions of the Consumer Credit Act. Most claimants will require legal representation to do this, but very few can ever hope to recover that cost even if they win their case.

Court “tracks”

To re-cap: court cases are allocated to certain “tracks” following a defence: the “small claims track”, the “fast track” and the “multi-track”.

A matter allocated to the small claims track has in effect a “no – costs rule” which means that a person bringing a claim will not usually expect to pay the other sides legal costs if they are unsuccessful. It also means they will only recover their damages but not the cost of any legal representation.

This can put an individual at a significant disadvantage if they are faced with pursuing a well-resourced commercial organisation. The cost of hiring a lawyer to represent them in a small claim will often be greater than the value of the claim itself. Faced with that or alternatively, becoming a litigant in person, many will not bother.

The tracking of claims

As to which track a case is allocated to, Part 26.8 (1) of the Civil Procedural Rules (the “CPR”) states that the court shall have regard to the following matters:

(a) the financial value of the claim;

(b) the nature of the remedy sought;

(c) the likely complexity of the facts, law or evidence;

(d) the number of parties or likely parties;

…

(f) the amount of oral evidence which may be required;

…

(h) the views expressed by the parties; and

(i) the circumstances of the parties.

So far so good.

However, Part 26.6 of the CPR talks about the “Scope” of each track and at 26.6 (3) it states:

“…the small claims track is the normal track for any claim which has a value of not more than £10,000.”

All too often a District Judge will apply a strict valuation on a dispute when determining which track to allocate the matter to, at the expense of the provisions of CPR 26.8.

“Complexity” – complex to who?

Those representing claimants in disputes below £10,000 will often argue that the “normal” track should be deviated from when looking at the issue of complexity. This is particularly the case when dealing with matters involving the inner workings of the Consumer Credit Act. Unfortunately, judges will often allocate to the small claims track (perhaps fearful of being criticised for running cases “disproportionately”) at the expense of the parties being on an equal footing.

The issue of complexity will be looked at in the context of a judge’s own ability to understand the law and not what a private individual makes of it all.

This attitude was typified in the 2012 case of Loughlin -v- Blackhorse where a decision to allocate a Consumer Credit Act dispute to the small claims track was unsuccessfully appealed. In that case the judge held that, “these matters are much more straightforward than they appear to be”, basing that on the expertise of the judge and not what a non-legally trained private individual was capable of understanding. This is, in my view, the wrong approach to adopt.

Surely, a more compelling barometer for complexity is when a claimant feels so uncertain about the law they seek legal representation to assist them?

Fortunately, that was the view of His Honour Judge Keyser QC in the recent case of Elias & Elias -v- Blemain Finance Limited.    

The judge took the view that the question of complexity very much needed to be considered in the context of the claimant’s capabilities, not the capabilities of the judge hearing the matter.

“…the basic idea is that the small claims track is designed for low-value claims that people might be expected, with a degree of assistance from the court and with simple case management directions, to conduct from beginning to end (including at trial) by themselves and without the need for legal representation.

…it seems to me that there is a real danger in cases of this sort that issues and arguments that can only be addressed and presented competently by lawyers, to whom perhaps the issue might indeed appear simple if they are experienced at the work, will end up being shunted into the small claims track where litigants in person are not going to be able to present the case.  Personally, I should very much doubt whether litigants in person are likely to have competence in questions of secret commission or section 140B of the Consumer Credit Act 1974….

…In cases such as the present, the defendants will almost always have legal representation, even if only in-house.  The risk of depriving claimants of the real opportunity of obtaining legal representation seems to me to be a wider reason why some caution is required before cases of this sort are allocated to the small claims track, at least where that is not the normal track for them under rule 26.6.”

“At proportionate cost”

Of course, defendants will argue that if claimants are allowed to routinely recover their legal costs on cases of a value below £10,000 how can that be justice at proportionate cost? I think the answer lies in looking at the bigger picture. By showing large corporations that individuals might recover legal costs for the claims they bring, they are very likely to become much more engaged in the dispute resolution process and many of these cases will never need to be issued in court in the first place. Now that will save a lot of court time and expense!