f/k/a . . . the archives

February 12, 2007

UK p/i lawyers oppose increase in small claims limits

Filed under: — David Giacalone @ 6:24 pm

. . . . . . . published simultaneously here and at shlep . . . . . . .

UKg   The UK’s 5,000-member Association of Personal Injury Lawyers ["APIL"] has been waging a campaign to prevent an increase in the personal injury limits in the UK’s small claims courts (“small claims track”).  See, e.g., ”Support Grows for Retention of Small Claims Limit for Injury Victims” (APIL Press Release, Dec. 11, 2006); and Response to the Better Regulation Task Force (APRIL/DCA, May 2004; 18 pp. pdf.).  (via PIBLJ, Jan. 27, 2007)

The dollar limit for most small claims matters in UK courts is £5,000, up from £3,000 in 1999, and £1,000 in 1996.  However, the limit on personal injury and housing repair matters is still £1,000.  Because of that lower limit, almost all p/i matters are heard in the upper tracks of the judicial system.  In 2004, the Better Regulation Task Force produced a report titled “Better Routes to Redress“ (48 pp. pdf.), which recommended (in Sec. 4.2, at p. 25), that:

[T]he Government carry out research into the potential impact of raising the limit under which personal injury can be taken through the small claims track. The research should establish a limit which best balances the benefits to the claimant and society against the costs.”

The Task Force noted that keeping the lower limit is supported by lawyers, who argue that p/i matters were too complex to be handled without a lawyer, and that the small claims track offered only limited recovery of costs, which was unfair to claimants in p/i cases, which can be very expensive.   The Task Force suggested that rules be changed to allowed recovery of reasonable medical expenses, and concludes that “allowing more personal injury claimants to go through the small claims track process will increase access to justice for many as it will be less expensive, less adversarial and less stressful.”  Its reasoning can be found in an excerpt provided below, under the fold.

percent2N You may recall from our posting last week on personal injury self-help, that both the legal reform group HALT (in its p/i Consumer Alert) and self-help pioneer Nolo.com have stated that small claims court here in the United States can be an excellent place to bring p/i claims for relatively small amounts of money.  In addition, HALT’s small claims reform project has been advocating long and hard for increases in the small claims jurisdictional limits (hoping to someday reach $20,000).

It its campaign against raising the small claims limit, APIL makes the arguments noted by the Task Force (complexity, inability to recover costs), and stresses surveys showing that the public is reluctant to go to court in a p/i case without a lawyer.   In addition, it frets that “In the small claims court, a claimant either has to pay for legal representation out of his own pocket, which many people can ill-afford, or stand up in court against the defendant without the benefit of a lawyer’s representation.”  This suggests that p/i lawyers won’t use contingent fees (which APIL calls “CFAs” — Conditional Fee Agreements) in small claims court, but I do not understand that position (and would welcome an explanation). 

APIL also asserts that the small claims court will not assist the claimant to effectively bring his or her own case.  They make the self-serving claim that the claimant without a lawyer will face a rich defendant with legal representation and not receive justice — or, simply not bother to bring the case.

Moreover, APIL strongly cautions that

percent2G ”By raising the small claims limit firms will be deprived of a huge source of funds, which personal injury claims between £2,000 and £5,000 provide, so making it unlikely that larger risky cases could be pursued.  APIL members have estimated that between a third and a half of personal injury cases they deal with are for damages around £5,000. By removing the ability to regain costs firms will struggle to support personal injury practices, and in particular, will refrain from taking on cases which have any chance of being lost – i.e. only take on cases which have a 90 per cent plus chance of success. APIL believes this will further restrict injured claimants access to justice.”

This seems to be the discredited notion that p/i lawyers subsidize riskier cases with lower risk cases.  Not only is there no credible evidence that such cross-subsidization exists, but each client should have his or her own case treated on its merits by the lawyer — paying fees based on the risk presented by the particular case. 

Because I am not familiar with the working of the UK legal system, I would very much like to hear from those who might be able to explain whether there are differences that would make low-dollar p/i claims inappropriate for small claims courts in England and Wales.  Does “loser-pay” change the dynamics and make the upper track courts fairer to the claimant?  Would allowing recovery of costs in p/i cases solve the problem of expensive medical reports?   Is self-help information available from the small claims courts for “in person” litigants, so that they will understand procedures, as well as issues such as fault and causation?

So, does APIL have a good case against the increase of small claims limits, or was ethicalEsq correct to suspect that the lawyer guild has been working to prevent reform and revitalization of small claims courts?

Here’s an f/k/a “small” “claims” bonus:  SeashellLaurieSmith

small talk
in the cellar
spring rain

their traveling hats
looking small…
mist

yellow gang, white gang
the butterflies stake
their claims

claiming
the big sake cup…
a little butterfly

. . . by Kobayashi Issa, translated by David G. Lanoue

pennyS pennyS Below is the reasoning of the Better Regulation Task Force:

Excerpt from “Better Routes to Redress“ (Better Regulation Task Force, Sec. 4.2, at p. 25 to 26, pdf): 

“The small claims regime in England and Wales has been designed specifically with claimants in mind. It provides a cheap and simple mechanism by which people who are unfamiliar with legal procedures can bring their disputes to the courts. They can dispense with the services of lawyers if they wish to do so. 

“Even though a dispute may involve only a small sum of money, the small claims procedure gives litigants in person a fighting chance of success against a represented and wealthier opponent, without having to run the risk of financial ruin in the process (since they do not have to pay their opponent’s costs if they lose). The whole process is designed to be more informal and less adversarial. In the small claims track the judge plays a proactive role at hearings. This role involves, in particular, helping litigants in person to present their own evidence and assisting them in putting questions to the other side.

“. . . . Given the work being carried out in the area of fixed fees (dealt with later in this report), the Task Force believes that the time is now right to examine again whether the limit for personal injury claims should be raised above £1,00012. The issue has not been examined since 1999. The research should concentrate on the implications of raising the limit for personal injury claimants, and should include changes to allow the claimant to claim reasonable medical expenses from the defendant. We believe that allowing more personal injury claimants to go through the small claims track process will increase access to justice for many as it will be less expensive, less adversarial and less stressful.”

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