Using small claims court

[vivlorimer]

Is there anyone out there who has been put off pursuing a valid claim because of the risk of losing and having to pay costs? We are in dispute with a firm who have retained our deposit of over £17k for proposed building works while having done no work beyond initial drawings, which did not comply with what was stated on the contract we signed. We have already spent £3k with our solicitor in an attempt to recover our deposit, but the firm have found reasons not to attend any of the three 'without prejudice' mediation meetings we have suggested, and our only option is to take them to court. But we cannot afford to risk losing, because they would then be able to claim costs. Is anyone else in a similar position?

This is not a small claim. The limit for a small claim is £10k. If it was a small claim you would not be liable for the other party's costs even if you lost.

Is there a realistic chance that you would lose? Did you, for example, refuse to give them any chance to rectify the problems with the original drawings? Unless the firm has a reasonable case and can convince the court that, on the balance of probability, they are allowed to retain this money they will lose.

If you are worried about the possibility of losing you should consider taking out legal expenses insurance. This will give you insurance against the risk of losing and having to pay the other side's costs. You should also check your home insurance. You may find that you already have legal expenses insurance that will cover this.

Thanks for your post, but I'm afraid you are incorrect; costs can be awarded against us should we lose even if we restrict the amount we are claiming to £10k. ( See the relevant section on gov.uk )
The firm made a false claim on their contract that they were approved by FCA and did not produce a design to meet our requirements as specified on the contract, which would have necessitated planning permission, thus delaying the possible start of works by over two months. There were other inaccuracies.
They have so far 'stone-walled' three attempts by our solicitor to arrange a mediation meeting.
They claim ( this is almost a full year later) they have already constructed the building ( a good trick with no groundworks or foundations) but have produced no documentary evidence for their assertion.
They say that they will pursue us for costs if we proceed with court action. Having already lost £20k ( our deposit plus our legal fees so far), I am frightened to take the risk, however small, of going through the courts. The firm know this, of course. We are in our 70s; I have MS; the stress is making me ill.
Am I 'allowed' to name the firm on this site? Would I then get sued for defamation?
Any advice would be gratefully received.

I can't see how you would lose if it is that cut and dried? However actually getting the money back even with a court order seems unlikely? Presumably they are not members of any professional association?

I think your bigger concern isn't getting awarded costs but that they might not have the money to pay you if you win. This isn't the response of a well run business and I'd strongly suspect they're likely to go under soon.

Thanks for your post, but I'm afraid you are incorrect; costs can be awarded against us should we lose even if we restrict the amount we are claiming to £10k. ( See the relevant section on gov.uk )

I am correct. If a claim is heard in the small claims court the winning side can usually only claim court fees, witness expenses and similar. This is a relatively small amount of money. They cannot reclaim solicitors fees or other legal costs unless you have behaved unreasonably. The bar for unreasonable behaviour is high. You have not behaved unreasonably. This is set out in Civil Procedure Rules 27.14, which you can find at www.justice.gov.uk/courts/procedure-rules/civil/rules/part27#27.14.

Agree with a previous poster. If it is as cut and dried as you say there is no realistic chance of you losing.

Just for clarity, court fees are nothing to do with the costs of being represented in court. They are the fixed costs you pay to launch a claim. In this case, as you are the ones taking action, the firm will not incur any court fees.