The Perils Of Understating The Value Of Your Claim

The dramatic increase in court fees last year has resulted in fears that access to justice is being restricted.  One of the consequences of this is that some claims (particularly high value personal injury claims) are being issued with lower statements of value than the real value of the claim in order to attract a lower court fee.  The claims are then amended later to reflect the true value with the difference in the court fee being paid.

However, the case of Lewis & Others v Ward Hadaway is a salutary reminder to claimants of the risk of adopting such a tactic.

The case concerned 31 claims brought against a firm of solicitors in relation to alleged professional negligence in conveyancing transactions.  The Claimants issued “protective” claim forms close to the end of the limitation period in order to stop that period from expiring.  They stated that they expected to recover damages limited to £15,000 when the actual value of each claim was over £300,000.  The claim forms were then amended before they were served to reflect the actual sums claimed and the higher court fee was paid.  The solicitors acting for the Claimants said that this approach was adopted as they were waiting to be put into funds for the full court fees.

The Defendant applied for the claims to be struck out as an abuse of process (on the grounds that the Claimants tried to avoid initial payment of the correct court fee) or, alternatively, for summary judgment on the grounds that the claims had not been properly issued within the limitation period.

The Judge found that there had been an abuse of process.  In deliberately understating the value of their claims, the Claimants had not paid the Court the amount due at the appropriate time and had caused it to incur further costs in unnecessary administrative work in processing the amendments.  The claims were not struck out, though, as it was held they were arguable and that to dismiss them would result in considerable prejudice to the Claimants whereas no loss had been caused to the Defendant.

However, the Judge decided that as a result of the Claimants’ approach, the claims had not been properly issued within the limitation period and therefore the application for summary judgment was granted.

This case highlights that the Court, apparently for public policy reasons, will not tolerate any deliberate understatement of the value of the claim and that doing so will leave claimants at the mercy of the Court as to whether or not their claim can proceed.

Picture of Luke Patel

Luke Patel

Luke Patel
Commercial Dispute Resolution Team
0113 227 9316

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