Are Costs Recoverable on the Small Claims Track?

The small claims track is designed to provide a user-friendly and affordable way for individuals and businesses to resolve relatively modest disputes without incurring significant legal fees.

The current financial threshold for a small claim is £10,000. While acting as a litigant in person is daunting, one crucial aspect to understand is the concept of cost recoverability when instructing representatives. This article aims to shed light on cost recoverability in the small claims track, helping you navigate this challenging terrain.

The General Rule

The general principle in small claims track cases is that you may not be entitled to reimbursement of your legal fees or other expenses (except for Court fees). This stands in contrast to other civil Court tracks, where the successful party can often recover a portion of their costs from the losing party.

Exceptions to the General Rule

There are exceptions and nuances to be aware of:

• Fixed Costs: The small claims track has established fixed costs that can be recovered by the winning party. These are typically limited and intended to cover basic expenses such as Court fees, witness expenses, and travel costs – some costs can also be recovered by reference to different stages of a claim.
• Contractual: Entitlement could be increased from the fixed costs position if there is a contractual entitlement to recover costs.
• Unreasonable Conduct: Further costs may be ordered by the Court, assessed by the summary procedure, to be paid by a party who had behaved unreasonably (CPR 27.14 (2) (g)). This typically involves extreme misconduct, such as frivolous or abusive litigation tactics. Keep in mind that the determination of unreasonable conduct is at the Court’s discretion.

Practical Tips

Here are some tips to consider:

• Be Precise: Clearly outline exactly what action constitutes unreasonable conduct, why it does not permit reasonable explanation and what costs have been incurred as a result.
• Gather Evidence: Ensure the trial bundle has the relevant correspondence and consider preparing a supplemental bundle and/or short witness statement dealing with costs matters which can be shown to the Judge once the case has been decided and when costs are considered (this should be filed with other statements on time, but marked as “not to be read by the Judge until the issue of costs is determined”).
• Costs Schedule: File and serve a costs schedule well in advance (and in line with the Civil Procedure Rules), obtaining evidence of service.
• Give Notice: Notify the other party, as early as possible, that you intend to pursue the recovery of costs, and reference specific instances of their conduct.

Ultimately, the small claims track is designed to provide an accessible and efficient means of resolving disputes, which is reflected in its limited scope of costs recoverability. While the general rule is that costs are not recoverable, there are circumstances in which you may be entitled to at least some reimbursement. Navigating costs recoverability in a small claims track can be complex, but understanding the rules and exceptions is crucial for anyone involved in such disputes. Please don’t hesitate to contact us if you’d like help with a small claim or other dispute resolution matter.

Contact details:

Brook Little- Brooklittle@chadlaw.co.uk

Lydia Jeffels- Lydiajeffels@chadlaw.co.uk

Telephone- 0113 225 8811