100% of costs awarded on Small Claims Track

Steele Raymond’s Dispute Resolution team has recently been successful in its application to strike out a claim against our two defendant clients, which resulted in the unusual step of full costs being awarded on the small claims track.

Not only did the Court find that we met the high bar required for a strike out application, but it also awarded our clients their costs, even though the claim had been allocated to the small claims track – the route for cases generally with a lower value (up to £10,000) and less complicated claims.  It was an excellent result for our clients, and demonstrates that it is worth applying for a costs order in certain circumstances, even on the small claims track where costs are not usually recoverable.

Background

The claim was a very interesting one.  The claimant had entered a betting shop owed by one of the defendants and had attempted to place a bet. Due to technical difficulties, the bet was unable to be accepted or placed. The claimant was made aware of that at the time, but then claimed that had the bet been placed, he would have won £25,000.

Instead of bringing a single claim for £25,000 against the legal entity responsible for running the betting shop, the claimant instead initiated two claims; one for £10,000 against the company that owned the betting shop and a separate claim for £10,000 against its sister company which manages the online division (and had no liability for the retail shop). A separate claim of £5,000 against a separate legal entity was threatened but did not materialise.

The claims were successfully defended on the grounds that:

1. The defendant was not under any obligation to accept or place a bet.
2. The defendant cannot be under any obligation to pay out for a bet that was not placed.
3. Even had the bet been successfully placed, the claimant would not have won.
4. Against the online defendant, the Court found that the claimant had made a claim against the incorrect legal entity.

Costs awarded

A claim valued up to £10,000 will usually be allocated to the small claims track. As a general rule in the small claims track, no costs are awarded against the losing party, other than limited fixed costs (such as court fees).  There is an exception to this general rule if the losing party has behaved unreasonably, in which case the court has a discretion to make an order for that party to pay the other side’s costs.

We argued that our clients should be entitled to recover their costs incurred in defending the claim on the basis of the claimant’s unreasonable behaviour:

1. He was made aware of the correct legal entity against which to bring a claim, but still made a claim against the incorrect entity.
2. He ignored advice received from the Independent Betting Adjudication Service and the Gambling Commission that his claim had no merit.
3. The claimant lied and put forward that his bet would have won when in fact it would not have.
4. The claimant divided up his claim, seemingly to manipulate the allocation process and ensure that the claim fell under the limit of the small claims track (where costs are generally not recoverable).

The judge agreed with us and ruled that both claims were wholly without merit and awarded one defendant a significant proportion of their costs and the other 100% of their costs. This is remarkably rare in the small claims court and a notable triumph for both this firm and our clients.

The client said: “This was a fantastic result.  I recognise that costs are not usually recoverable on the small claims track and believe that the hard work of Steele Raymond in preparing the case helped us achieve this great result.”

Our experience

Our Dispute Resolution team has experience in all types of litigation and regularly act for both claimants and defendants.  We have extensive experience of all track allocations and aim to bring and defend claims in a commercially proportionate way, to ensure clients achieve their desired outcome.

If you would like to speak with one of our dispute resolution solicitors, please contact Amelia Williams on 01202 099095, email [email protected] or Taylor Anderson on 01202 204530, email [email protected] or complete the form below.