Small claim. Will I really have to pay for their solicitor? (Scared!)

[LostInABlizzard]

I've made a claim against a company for £10,000. They have a solicitor representing them in their defence. I can't afford a solicitor and when I started this I was following guidance which stated that for a small claim, no legal costs will be awarded to either side no matter who wins/loses the claim.

They have just made me an offer to settle (for £5000) and the offer letter states that if I refuse it I will be seen as unreasonable and the court will "in all likelihood" make me pay their legal fees.

I thought they were just trying to scare me but then I found this article dated September 2020 that states:

"Exceptions to the Small Claims Costs Rules
Where the parties consented to a claim being allocated to the small claims track, although its financial value exceeded £5000, the rules on costs are different. The judge will be able to make the same order for costs as if the claim had been dealt with on the fast track (broadly speaking this covers claims with a financial value of between £5000 and £15,000). While these costs are still limited they are substantially more than could be awarded on the small claims track."

Does this mean that I could in fact have to pay for their solicitor? They are being represented by one of the partners in the legal firm they are using. This could ruin me financially as I don't have much in savings.

I did consult a solicitor a year ago when this issue arose, and was told I have a good case, but his fees mounted up so quickly that I had to stop using him. I haven't included those fees in my claim as I wanted to keep it under £10,000 so it would be a small claim, for that very reason.

I'd be grateful for any advice or reassurance if anyone knows about this, or can point me to the relevant rules. I've looked at the Civil Procedure Rules but can't find anything to confirm what it says in the article.

Other solicitors might charge less though

HollowTalk They are a business and I was their client.
I think they have an insurance policy to cover their legal costs.

wingsnthat I suppose they might… but it's on the small claims track now and I don't want to start all over again. Plus the solicitor was so slow! That whole part of the process took months and they took no notice of the letter that was sent to them.
TBH I'll be happy if I just get the £10k as that will cover my previous solicitors' fees due to the amount that's been added for interest.

If you have proof they are wrong on the facts and with everything else you have posted here, I would pursue the claim.

You’re allowed to charge interest:
www.gov.uk/make-court-claim-for-money/work-out-interest

I would recommend hiring a solicitor.

You might find assistance by posting on legaladviceuk on Reddit. It is not a replacement for a solicitor - at all. However knowledgeable people may come across your post and may be able to shed light on your questions. Of course, you should always rely on the advice of a solicitor and not random forum users etc.

www.reddit.com/r/LegalAdviceUK/?utm_source=amp&utm_medium=&utm_content=post_subreddit

I don't suppose you have legal cover on your bank account, do you?

If they are offering £5000, they will probably pay a bit more. It's very hard to advise you without knowing any of the details, but usually an opening offer isn't the final offer. Without knowing any of the details, I'd say you should counter offer for, say, £8000 and see if they up their offer to £6000 or £7000 and then take it. No matter how good you believe your case to be, there is always a risk you will lose, so you should factor that in to your thinking.

To those saying that they are only offering £5000 because they know they will lose, that's not necessarily right. They may be offering that much because they know they will have to pay their solicitors that much or more to defend the case so will be out of pocket by that amount or more even if they win.

(Litigator here, but not small claims court I don't know the definitive answer to your costs question. Ring the Citizen's Advice Bureau and ask them.)

I’m not a legal professional and so I am cautious about what I would suggest. You could try CAB.

They will very quickly rack up legal costs in excess of the £10k if this goes to small claims. If you word the letter carefully I.e don’t say you refuse their offer leaving you a way to accept if you change your mind.

You could say that xyz are factually inaccurate and state the correct facts. Add in that they should bear in mind the ombudsmen has already found in your favour. In view of this £10k is fair settlement and to be aware that your costs are also rising and that you will add them to your claim if this proceeds to small claims. (Check you can do this).

Yes if the court considers your conduct to be unreasonable, you could be ordered to Kay their costs.

pay not Kay

No, it is not unreasonable to add interest to the claim.

Legal costs can be awarded if you behave unreasonably. However, refusing an offer is not unreasonable. The standard for unreasonable conduct is very high. The likelihood of the company being awarded costs on this basis is, therefore, very low. That is almost certainly an empty threat by the other side's solicitors.

The article by the barrister is a long way out of date. If you look at the head of the article, it states that he amounts are correct as at May 2008. The limits have gone up a long way since then. For example, the fast track is for claims between £10k and £25k, not £5k and £15k as stated here.

I suggest you consider your options. Very few cases are so watertight that they are guaranteed to win. There is always a risk things don't go your way and there is a risk of you paying their costs. Perhaps you could make a counter offer and try to settle this out of court.

At this stage I would not offer to settle for less than £10k.

I have dealt with small claim litigation for many years. Although it's not impossible for the judge to award a cost order against the Claimant for unreasonable behaviour, I have never seen one! Not accepting their offer is not unreasonable behaviour! I would pursue your case to the bitter end. The Defendant will be incurring legal costs as well.

prh47bridge Thank you! I didn't notice the reference to 2008 in the article.

HollowTalk No cover on my bank account but I have it through my trade union as well as household insurance and have already exhaused the free legal advice options from both.

SummerInSun I'm almost 100% certain an insurance policy is paying for their legal cover so I don't think the insurers will allow them continue to fight the claim if the costs are exceeding the value of the claim (?).

I wonder if the solicitors are pushing it as they know they will get paid whether they win or lose.

The company has also refused to hand over some records that are relevant to my claim and I wonder if they have actually done worse things than I already know about and if that's why they are so determined to fight this.

Big thanks to everyone who has chipped in here. I'm feeling a little more confident now that I know about the solicitor's fees. I definitely haven't been unreasonable.

I will try Reddit, and CAB when it reopens on Tuesday.

OP is there a time limit on when you have to do this by? You’d hate to faff about and be out of date and miss out.

Perhaps others can advise if you don’t know?

You mention that the company has refused to hand over records which are relevant. You need to put in a written for copies of the same, failing which you will need to make an application for specific disclosure for copies of the records.

You also mention you have been charged by another solicitor for £3000 for the work they have done previously for you, namely a review and one letter. From my experience that is not reasonable, and you also state this is actually closer to 10k with interest added, again this seems wholly unreasonable.

I can't add any more advice without knowing the history to your claim or a potential defence, however I would urge caution in incurring any further costs you are unable to pay off. You do not want any county court judgments against you.

Good luck and I hope you get this resolved.

Apologies, I see your previous solicitors' costs are closer to £3000 not £10,000, that still seems awfully high.

Elieza There is a time limit but the deadline isn't imminent.

@Chocolatetrifle Thank you. Can the written request be a letter to their solicitor? And then if they don't comply would I need to make an application to the court for disclosure?
How much time should I give them to comply before making the court application?

One of my family members thinks I could be seen as being unreasonable for adding 8% interest. They say I would never have got that if I'd had the money in hand and that I should reduce it to 2% in my counter-offer.
I do take their point but 8% was the suggested amount on the government website!
Do you think 8% is unreasonable?

The Secret Barrister talks about this in some detail in their book Fake Law - you might find it helpful. Good luck, op

Your family member is wrong. 8% per annum is not unreasonable. That is the standard rate used by the courts for this type of claim. It would only be unreasonable if you added on 8% for a period of less than one year.

prh47bridge Thank you; that is reassuring.

TaraR2020 I will look that up. Thanks for the suggestion.