From April 2013, the upper limit on what constitutes a ‘small claim’ in court proceedings is due to double, taking the threshold to £10,000 for most cases.
Exceptions to this include personal injuries from road traffic accidents, and property disrepair, both of which are subject to lower limits.
For most other claims though – including court action for late payment of invoices – sums of up to £10,000 should be referred to the small claims track.
This is generally good news for claimants, as it should mean pursuing a claim incurs fewer legal costs, and is both easier and faster to reach a satisfactory conclusion.
Upon its introduction, the new threshold will be subject to a review period, which is aimed at making sure that it serves the needs (and, presumably, the legal rights) of claimants and defendants effectively.
However, ultimately this review is targeted not just at supporting the £10,000 threshold, but at providing evidence to support a move towards a £15,000 maximum limit on small claims.
There is also a separate move to raise the threshold for motor vehicle personal injury claims to £5,000, but this proposal was only made in December 2012 and has no bearing on debt recovery cases.
Taking the moves together, though, it is clear that there is a trend towards giving claimants the right to recover reasonable amounts of money without facing costly legal action.
For those of you whose client accounts are currently of the order of £5,000-£10,000, it should also provide an easier route to recourse if any customer fails to settle an invoice amicably, making court action a necessity in order to recover what you are owed.