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I am from Australia. In Australia, any civil claim below $10,000 is considered a small claim and one cannot use a solicitor to represent himself in the small claims court. One may also not claim the amount incurred in legal fees for small claim proceedings.

I am currently being threatened by a car insurance company to pay a disputed liable amount of $1500. They are threatening to engage a solicitor if I don't pay NOW or risk adding solicitor charges on top of it.

This is somewhat confusing to me due to my first premise above, i.e. small claims cannot have any representation and charge legal costs.

Is there somewhat a way for them to go around this? Or are their threats merely empty threats?

FYI, I really don't think I am liable for the amount.

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    If you don't think you're liable then you shouldn't expect the small claims court to rule against you, which in turn means you shouldn't worry about the other party's solicitor costs.
    – Greendrake
    Feb 28, 2022 at 3:21
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    @Greendrake In a perfect world, of course, I won't worry. But the other party may lie and I end up having to pay 10x the cost. In Australia, Solicitors can cost up to $600 per hour.
    – user1034912
    Feb 28, 2022 at 3:23
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    What could matter but how sure you are of your innocence, and to what extent you might be able to prove that?
    – Robbie Goodwin
    Feb 28, 2022 at 21:23
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    Wait - a car insurance company is demanding payment? Did you make a claim? Is this $1500 a deductible? I'm not familiar with Australian auto insurance, but in the US if you cause an accident, you're generally out a deductible but they don't add additional punitive damages (they may just cancel your policy instead). I also find it odd they're "threatening" you to pay, otherwise they'll engage a solicitor. I would assume Australian auto insurance companies have solicitors on retainer or built in to their company. I guess my comment is just trying to make sure this isn't a scam.
    – BruceWayne
    Mar 1, 2022 at 2:31
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    Here in the UK, any solicitor should be able to reassure you that it's forbidden to take legal action on a (genuinely) disputed claim. I have no idea how different Australian law is. When you say a civil claim below $10,000 cannot involve a solicitor, nor claim the amount incurred in legal fees, why does that not apply both ways? In that respect please be very sure, "one cannot use a solicitor to represent himself" is at best simply wrong. What you seem to mean is "one cannot use a solicitor, but must represent himself" which doesn't mean the same at all.
    – Robbie Goodwin
    Mar 7, 2022 at 19:14

2 Answers 2

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Issues in the question

In Australia, any civil claim below $10,000 is considered a small claim

This depends on the State or Territory involved. In three the limit is $25,000, not $10,000. In only one is it exactly 19,000. In several the plaintiff has an option not to have such a case treated as a small claim.

one cannot use a solicitor to represent himself in the small claims court.

This also varies by state/Territory. In some a lawyer may represent a person or company, in some legal representation is allowed only if both parties agree or if the court permits, in some no lawyers are allowed except in very special circumstances.

One may also not claim the amount incurred in legal fees for small claim proceedings.

This seems to be true in most states

Sources

Details

Australian Capital Territory (ACT)

  • Small Claims Limit: $25,000
  • Name of court: ACT Civil and Administrative Tribunal (ACAT)
  • Option to use a higher court: No
  • Lawyers (solicitors) allowed: Yes
  • Can a solicitor's costs be recovered by the winner: no

New South Wales (NSW)

  • Small Claims Limit: $20,000 (higher for some kinds of cases)
  • Name of court: Local Court, Small Claims Division or NSW Civil and Administrative Tribunal
  • Option to use a higher court: Unclear from my sources
  • Lawyers (solicitors) allowed: Yes
  • Can a solicitor's costs be recovered by the winner: No

Northern Territory (NT)

  • Small Claims Limit: $25,000 (higher for some kinds of cases)
  • Name of court: Northern Territory Civil and Administrative Tribunal (NTCAT).
  • Option to use a higher court: No
  • Lawyers (solicitors) allowed: Only with the leave of NTCAT
  • Can a solicitor's costs be recovered by the winner: Only in exceptional circumstances

Queensland

  • Small Claims Limit: $25,000 (higher for some kinds of cases)
  • Name of court: Queensland Civil and Administrative Tribunal ('QCAT').
  • Option to use a higher court: No
  • Lawyers (solicitors) allowed: No, unless one party is a child or both parties and the tribunal member agree, or in certain other limited circumstances see https://www.qcat.qld.gov.au/resources/legal-advice-and-representation
  • Can a solicitor's costs be recovered by the winner: No

South Australia

  • Small Claims Limit: $12,000
  • Name of court: Magistrates Court, Civil (Minor Claims) Division
  • Option to use a higher court: No
  • Lawyers (solicitors) allowed: No, unless both parties agree or one party is a lawyer.
  • Can a solicitor's costs be recovered by the winner: No

Tasmania

  • Small Claims Limit: $5,000
  • Name of court: Minor Civil Claims Division of the Magistrates Court
  • Option to use a higher court: No
  • Lawyers (solicitors) allowed: Only if both parties agree and permission is granted by the Magistrate, or in other special circumstances. See https://www.magistratescourt.tas.gov.au/about_us/civil/minor_civil_claims
  • Can a solicitor's costs be recovered by the winner: Yes, when one has been used.

Victoria

Western Australia

  • Small Claims Limit: $10,000
  • Name of court: Magistrates Court (Minor Claim)
  • Option to use a higher court: No
  • Lawyers (solicitors) allowed: Only if all parties agree, or the court grants special permission
  • Can a solicitor's costs be recovered by the winner: No, unless exceptional circumstances exist.
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The small claims threshold is $20,000, not $10,000.

There is no rule against being represented by a lawyer.

Costs can be awarded in certain circumstances, however, these are limited by the circumstances and the amount in dispute. Worst case, for the amount in question here, the maximum costs that could be awarded is about $1250.

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    Thanks Dale, what do you mean by $1250? I don't understand that part.
    – user1034912
    Feb 28, 2022 at 3:30
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    [32-120] Costs and expenses : Amount at issue in the proceedings : $5,000–$20,000. ("Worst case") ... Maximum costs (excl GST) : $1,259.20 ... Your $1500 is not worst case (ianal), it's $1000–$5000 which is $944.40
    – Mazura
    Feb 28, 2022 at 18:28
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    @Mazura +25% if there was a rejected settlement offer.
    – Dale M ♦
    Feb 28, 2022 at 21:11
  • Is the insurance company required to file as a small claim with the associated limitations, or is that only a procedural option for it? Could it file in a non-small claims forum and collect its solicitor fees?
    – ohwilleke
    Mar 1, 2022 at 3:03
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    @ohwilleke you don’t have an option - if it fits within the small claims division of the Local Court, that’s where it’s heard.
    – Dale M ♦
    Mar 1, 2022 at 4:25

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