The Local Court in New South Wales deals with most of the state's small claims. It has jurisdiction to deal with claims of a monetary limit of up to $40,000.00. Above that, the proceedings go to the District Court or the Supreme Court. From this it is clear that the Local Court has a lot of traffic.
Within the Local Court there is a "Small Claims" division. This division within the Local Court is set up to deal with claims of a smaller size in a more informal and less "legal" way. There is a more relaxed attention to formal legal requirements and lawyers are discouraged. While it is applauded in the interests of keeping costs down and avoiding unnecessary delay in coming to a commercial resolution of a dispute, it is not always a good thing.
There are times when, even though a claim is a small size, the parties should be entitled to have adequate legal representation. The problem with this is that there are strict caps on the amount of legal costs that can be recovered in the small claims division. This means that a claimant may well incur significant legal costs in successfully suing for an outstanding debt but recover only a fraction of its actual legal fees from the unsuccessful opponent.
Recent changes to the money limit of the Small Claims division have exacerbated this problem. The limit was until recently $3,000.00. It has now increased to $10,000.00. This means a significant number of cases which otherwise would not have been in the Small Claims division have not been brought into the division. This will increase the workload of the division and disadvantage those litigants who require and should be entitled to legal representation.
This is a very brief introduction to changes to the jurisdiction of the Local Court and is not intended to be legal advice. This publication cannot be relied on as a substitute for appropriate legal advice suited to your circumstances. Given that this is the case, you should seek and retain the advice of a solicitor if you require a comprehensive and up to date analysis of the law pertaining to your circumstances.
March 2001
March, 2001
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