8 February 2012

Government to unveil county court shake-up with doubling of small claims limit

The government is expected to announce on Thursday that the small claims limit will be doubled to £10,000, although the limit for personal injury cases will remain at £1,000, Legal Futures has learned.

In its long-awaited response to the Solving disputes in the county courts consultation, justice minister Jonathan Djanogly is likely to say that the move will help push more cases towards either mediation – through the Small Claims Mediation Service – or simpler court hearings.

As many as 80,000 cases could be diverted to mediation this way.

The statement in the morning should also confirm plans to extend the road traffic accident portal to cases worth up to £25,000 and to other areas of personal injury.

A Ministry of Justice source said: “Businesses tell us they need to resolve commercial disputes as quickly and cheaply as possible so they can get on with their trade. Around three-quarters of disputes that have been diverted from court to mediation have been resolved easily by telephone without having to prepare a legal case or go to court. Just as importantly, mediation has helped to minimise potential damage to otherwise successful business relationships which can take years to build.”

Mr Djanogly is also expected to announce some technical measures to improve the enforcement of court decisions so that more creditors receive what they are owed.

These will include allowing creditors to apply for an order to secure an unsecured debt where a court-ordered payment instalment plan is already in place. At the moment creditors can only get a charging order to secure the debt if the debtor is defaulting on payments. This change would stop certain instances where a debtor might benefit from the sale of a property without paying off the debt.

 The announcement has now been made. See here for the full story.

Tags: costs