HAVE A DEBT CLAIM UNDER $20,000.00? BE AWARE OF CHANGES TO JURISIDICTIONAL LIMITATIONS AND PROCEDURES IN THE SMALL CLAIM JURISDICTION.
On 28 February 2019, the monetary limit of the Local Court of NSW in the Small Claims Division increased from $10,000.00 to $20,000.00. Those that have claims under $20,000.00 need to be aware of the implications especially in respect of legal costs that are incurred prosecuting the matter.
The Small Claims division is less formal in the way civil litigation is conducted than in the General Division of the Local Court. There are no rules of evidence, it is considered not to be a court of strict pleading which means that what you state in your statement of claim or defence may not necessarily bind you. Generally, no oral evidence is given and evidence is provided based on statements and documents tendered to the Court.
That being said, many complex technical legal arguments can find themselves under this threshold amount and whilst the court may not require strict rules of evidence to apply, if the matter is presented in a poor manner, for example with documents missing or in a form that would normally be inadmissible, the evidence is likely to carry little weight and give the “Assessor” grounds to find against the party that does not present its case correctly.
Keep in mind the onus to prove the case rests with the plaintiff. Further you really only get one shot at your matter as there a very limited grounds of appeal, not to mention the costs of the appeal alone does not make an appeal from the Small Claims Division an attractive option.
Under the old regime for claims in the General Division of the Local Court over $10,000 and up to $20,000.00, a successful party was entitled to a maximum of 25% of the amount claimed by the plaintiff. The change in the threshold to $20,000 means that in respect of orders for legal costs if a party is successful, legal costs are capped, the amount is presently, $729.60 excluding GST.
These changes will start influencing the conduct of claims under $20,000.00. For example, property damage to motor vehicles may become uncommercial to run for insurers noting the limit on costs recovery. Also, defendants may be more inclined to defend proceedings noting that there is little in the way of a potential costs penalty should they ultimately be unsuccessful.
However, the positives are there for the plaintiff as well, as a plaintiff claiming recovery of a debt may be inclined to prosecute the claim, without the intervention of a lawyer and also continue with the claim, noting the risk of a significant adverse costs order is minimal.
In summary, if you are thinking of commencing a matter claiming under $20,000, your claim still needs consideration of the merits and the commerciality of running the matter, and of course the likelihood of recovering if one does succeed.
Before commencing your claim, come and talk to us. If your claim amount is over $5,000 we will consider acting for you on a no win, no fee basis.
