Simple procedure is designed to be an efficient, understandable and informal way to resolve disputes under a value of £5000. That said, the governing rules are not necessarily simple to interpret, particularly with regards to expenses that can be awarded to the successful party.
This blog aims to assist in understanding these rules and how they apply to undefended claims.
Common Practice and Cabot
In undefended cases, it is common practice not to lodge an account of expenses. Instead, the claimant simply requests an award of expenses when applying for the decision of the Court.
This approach is no longer permissible in practice following the decision of the Sheriff Appeal Court in Cabot (UK) Financial Limited v Jordan Walls. In this case, Cabot sued Mr Walls for £1052.58 in respect of credit card debt. Mr Walls did not respond to the claim whereupon Cabot sought a decree for the sum sued, together with expenses in the sum of £386.60 (comprising £112 warranting dues, £4.60 service outlays, plus 15 units of time in accordance with the Table of Expenses).
The Sheriff Appeal Court found as follows:
- An account of expenses must be lodged in all cases whether defended or undefended.
- Expenses claims will be subject to reductions of 10% and then a further deduction will be made of 50% if the claim is for less than £1,000, or 25% for claims between £1,001 and £2,500.
This is best illustrated by the breakdown of expenses in Cabot –
Cabot was awarded the following expenses:
a. Fees of £270, the maximum allowed for undefended claims
- The £270 required to be reduced by 10%, leaving £243.00.
- The £243 required to be reduced by 25% as the claim has a value of more than £1000, leaving £182.25.
Total expenses awarded was £182.25 + outlays (warranting dues of £112 and postal costs of £4.60), totalling £298.85
This decision marks a notable change in approach with regards to expenses in undefended cases. The expectation is that this clarity will create consistency of outcome in terms of anticipated awards, however, the additional work now required in preparing and lodging accounts of expenses will undoubtedly increase costs incurred by claimants in undefended simple procedure claims.
For more information or advice, contact our team.
