Will business small claims be possible online?

In May, Leo Varadkar (FG/DW) introduced a private member’s bill, the Small Claims (Protection of Small Businesses) Bill 2009, which proposes to make two important changes to the Small Claims Court (“SCC“). The SCC it allows individuals to take a court case, with or without without legal representation, against another party relating to consumer goods or services, damage to property or the non-return of a deposit for a holiday home.

At present, the Small Claims Court (a division of the District Court) will only deal with claims worth up to €2,000 and an indivudal can take a case by paying a fee of only €15. Cases can also be initiated online and the system is particularly suited to online processing as the claimant can, for example, ensure that it has identified the correct person to sue by being referred to the website of the Companies Registration Office to check the business’ details. If the case is contested and is not settled the local District Court Registrar can become involved and try to resolve the matter and if this doesn’t happen the case can go ahead to the District Court itself for a hearing.

In reality, cases rarely reach the District Court and the SCC is, therefore, a great value remedy for consumers which often helps resolve relatively minor issues. The Courts Service has even published guides to the SCC in all major languages.

Deputy Varadkar has made two proposals to amend the SCC and the government has indicated its approval, in principle, to the changes. The first is to increase the maximum value of a claim which can be brought before the SCC to €3,000. The second proposal, which might have been controversial but does not appear to be so, is that small businesses may be permitted to use the SCC to recover debts. The motivation for such a change is the pressure that Ireland’s economic deterioration has put on our small businesses, some of whom may not be in a position to pay legal fees for the recovery of debts. The suggestion is not without merit, but it is an open question as to whether it is appropriate to allow a distinctly consumer-oriented system be used, in some cases, against consumers. It is also unclear as to whether additional resources will be provided to the District Courts to process business SCC claims when, as is likely, small businesses use the system en masse.

The Bill and explanatory memorandum do not state whether it will be possible for business claimants to use the online claims system (and it would not be necessary for this to be stated in the Bill), but if the changes go through there is no reason why this won’t happen.

Deputy Varadkar hoped for the Bill to be back in the Oireachtas in the coming months.

PS. The Bill would appear to be incorrect in seeking to amend Order 53A rule 1 of the District Court Rules as it refers to the version of rule 1 that existed prior to its amendment by the District Court (Small Claims) Rules 2007. Those 2007 rules increased the maximum level of claim to €2,000, whereas Deputy Varadkar’s 2009 Bill still refers to the pre-2007 limit of €1,269.74. It is also notable that the SCC rules are usually amended by way of Statutory Instrument approved by the Minister for Justice, whereas primary legislation is proposed for the new changes.

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