Rise in Litigants in Person and Damages Based Agreements predicted

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As the small claims limit rises to £10,000 we predict an increase in the number of Litigants in Person and the growing popularity of new Damages Based Agreements

It can be frustrating for a solicitor when facing an opponent who has decided not to instruct a lawyer of their own and is representing themselves in Court. No matter how confident they may be in their own abilities “Litigants in Person”, as self representing parties are known, don’t have the experience or understanding of Court procedure to deal with matters smoothly and this can mean delay and increased costs.

The Civil Procedure Rules require the Courts to “deal with cases justly” by “ensuring that the parties are on an equal footing”. However, some judges have taken this to the extreme and can be overly sympathetic towards unrepresented parties, giving them great leeway and making allowances which they would never offer to a solicitor or barrister.

On 1st April 2013 the small claims court limit for civil claims will rise from £5,000 to £10,000. As the rules in the small claim court mean that legal costs are not recoverable from the losing party there is likely to be many more people who will be unable to retain a lawyer. And because costs are not recoverable, standard “No Win No Fee” funding under a Conditional Fee Agreement will not be available.

The courts are therefore bracing themselves for a huge rise in the number of litigants in person and in anticipation of this they have given judges firm guidance on what is expected:-

1. Because a Litigant in Person “did not really understand” or “did not appreciate” the procedural routes available, it does not mean they should get extra indulgences from the Court – even if they are at an obvious disadvantage by not having legal representation.

2. A Litigant in Person cannot seek to set aside an order on the basis that if they had been properly advised they would have made a different application or taken a different procedural route.

3. A party with representation is entitled to expect the matter to be brought to a close without excessive indulgences being extended to the Litigant in Person by the Court.

The guidance makes it clear that Litigants in Person are to be bound by the rules in the same way that represented parties are.

For example, if a Litigant in Person does not attend trial and judgement is entered in default, the Court will focus on whether or not they “acted promptly” when they were first notified of judgment. Their lack of knowledge of time limits or procedural rules will be seen as irrelevant when looking at what is considered “prompt”. In addition the Court will look at whether or not there is good reason for them not to attend trial and also whether or not there are reasonable prospects of success. The Court will take little notice of their status as a Litigant in Person.

The most common reason why people decide not to instruct a solicitor or barrister is because they worry about how much it is going to cost. However they often take that decision without having made proper enquiries about the funding options available and base decisions on tabloid horror stories of monstrous legal bills. What they are unaware of is that solicitors are able to offer funding options to allow them to get the representation they need. Along with the increase in the small claims limit on 1st April 2013 is the introduction of Damaged Based Agreements (DBAs). If your solicitor believes your claim has good prospects of success, but you do not have the funds to pay them, you can enter into a DBA so that the legal fees can be paid out of any compensation recovered. If the claim does not succeed, then the solicitor doesn’t have to be paid. A Damages Based Agreement could be ideal in the small claims court where the value of the claim is high enough to warrant it.

Our litigation solicitors will be happy to discuss funding options with anyone contemplating a claim under the new small claims rules who is interested in a damages based agreement.
Call us on 0808 139 1606 or email [email protected]