Businesses looking to recover sums owed to them or bring any other contractual claim should be aware of a recent change in legislation. The financial limit, used to decide whether court cases are dealt with by the simple 'fast track' procedure, has increased under the most recent update to the Civil Procedure Rules (CPR). This came into effect on 6 April 2009.

In the civil courts, where a defence is filed to any claim, the court must allocate the claim to one of three ‘tracks'. This simply means the value of the claim determines how it is handled by the court. The qualifying claims limits for Fast Track and Multi Track have changed as follows:

• Small Claims track - for claims of £5,000 or less

• Fast Track - for claims of £5,001 - £25,000 (with a trial time estimate of not more than one day)

• Multi Track - for claims of over £25,000 (or by justification, lower value claims which require more than a one day trial, eg where there are complex issues)

The previous fast track upper threshold from when the track sytem was introduced 10 years ago was £15,000.

The advantages of the fast track are that evidence can be more easily presented and the timetable to trial is reduced.

Regarding legal costs, the amount that the court can order the loser to pay to the winner in a fast track case is fixed at a maximum of £1,650. There is currently no limit on the costs that can be awarded in multi-track claims.

It should be noted that there are currently no proposals to alter the small claims track limit, which has extremely limited costs recovery.

If you have debts or claims where you are considering litigation and it is likely that the claim will be disputed, this new rule change and the projected recoverability of costs in general, are important considerations to discuss with your solicitor.

For further information contact Barry Arkle on 0191 232 8345 or email barry.arkle@hay-kilner.co.uk

Please note:
This article is not legal advice; it is intended to provide information of general interest about current legal issues. Please contact us to discuss how the contents of the article may affect you.