In  Elias & Anor v Blemain Finance Ltd [2021] EW Misc 15 (CC) HHJ Keyser QC overturned a decision allocation an action to the small claims track. The matter was re-allocated to the fast track.

“… it seems to me that there is a real danger in cases of this sort that issues and arguments that can only be addressed and presented competently by lawyers, to whom perhaps the issue might indeed appear simple if they are experienced at the work, will end up being shunted into the small claims track where litigants in person are not going to be able to present the case”



The claimants brought an action allowing there had been unfair conduct by the defendant when a loan was arranged.  The Particulars of Claim estimated the claim to be “up to £21,325.67”.


The District Judge allocated the matter to the small claims track.
14.              Returning to the present case, I have read transcripts both of the full hearing and of the judgment of the district judge.  It is unnecessary to cite passages from the transcript of the hearing.  In her judgment, the district judge set out the competing contentions of the parties and continued:
“3. The value of the case is not pleaded.  The loan that the Court is concerned with I am told was in the region of £26,000.  The Defendant says that the value of the case at its highest is likely to be in the region of £4,000 to £4,500.  One of the issues in the case is whether the commission in the case was fully secret or not.  The Claimants say that this is a fully secret commission case that therefore rescission is available as a remedy as of right and that for various reasons this was an unfair agreement and the Court will have to grapple with what it puts as being:
‘Complex issues to determine the appropriate remedy considering rescission and counter restitution.’
4. The Defendant says that rescission as a remedy is fanciful in this case, that the Court will have to look at all the circumstances, that the borrowing was actually used for consolidation of other loans and that in reality what the Court will be doing is looking at an appropriate remedy probably of damages based on commission and charges most likely in the region of around £2,500.  They say this is not a complex matter.
5. I have considered all of these arguments and in particular the question of proportionality.  It has come to this Court’s attention that there are a number of these claims waiting in the wings as it were and they are regularly being listed for allocation hearings.  My view is that this is a matter that should now be allocated to the small claims track with a time estimate of three hours in accordance with wider practice that as I understand it is developing in response to claims of this nature.  I do not agree that there is anything particularly complex about this matter in the way that Mr Smith has sought to argue that it is that would warrant allocation of the matter to the fast track.
6. Given the issues the proportionate way forward is the small claims track. The judges who sit in fast track trials and small claims track trials are the same judges, they will be familiar with the issues and they will be able to deal with those issues.  It is not so complex that it would justify a different allocation.”


The claimants appealed the decision to allocate the matter to the small claims track.


The Circuit Judge held that the District Judge had erred in failing to consider fully the value being claimed.

15.              When Judge Jarman QC gave permission for this appeal, he noted in his order: “Notwithstanding the high hurdle which the appellants face to challenge successfully an allocation of this nature, given the potential complexity and value of the claim there is a realistic prospect of success.”  That draws attention at the outset to the point, made by Ms Mattu, that this is ultimately a case management decision.  It is therefore a decision with which this court ought only to interfere if it considers that the district judge made an error of law, or that she failed to take into account matters she ought to have taken into account or took into account matters she ought not to have taken into account, or if her decision was wrong in the sense that it was a decision that was outside the range of decisions reasonably open to her.  If the decision is open to review on those grounds, this court is entitled to exercise the discretion afresh.
16.              What is striking about the judgment is that, having referred briefly to the issue between the parties as to the value of the claim—which is, after all, the first matter in the list of factors in rule 26.8(1)—, the district judge did not say anything more about it.  After she had summarised the parties’ competing contentions, the rest of her judgment was directed to proportionality and complexity, with particular regard to what the district judge took to be a developing practice of the courts and to the fact that the same judges who dealt with fast track cases would also deal with cases in the small claims track.  In my judgment, this left a hole in the reasoning in the judgment.  The value of a claim is fundamental to the question of which is the normal track for allocation, although it is not necessarily determinative of the question of allocation in any particular case.  Further, the question of what is proportionate necessarily involves consideration not only of complexity and trial-length but also of value. 
17.              As is made clear by rule 26.8(2) and PD 26, para 7.3, at the stage of allocation the assessment of the value of a claim is a matter for the court.  Nevertheless, the starting point is to look at what is being claimed.  If the court forms the preliminary view that the value placed on the claim by the claimant is unrealistic, in that it exceeds the amount that the claimant may reasonably expect to recover, it may (though it is not bound to) exercise its power under rule 26.5(3) by asking the claimant to justify the value it puts on the claim.  If at the point of allocation the court is satisfied that the value placed on the claim by the claimant is unrealistic, it will proceed on the basis of its own assessment of the value of the claim.  Nevertheless, an allocation hearing is not the same as a hearing for the summary determination of an issue, and where there is a live issue of quantum—such as, in the present case, might turn on the availability of rescission or on the nature of relief that might be granted under the Consumer Credit Act 1974—it will not generally be appropriate for a judge deciding on allocation to do so on the basis of an opinion that, on a contested issue of quantum, one side’s case is preferable to another’s.
18.              At all events, in the present case the district judge did not purport to proceed on the basis of any assessment of the value of the claim.  She did not express any view at all in that regard.  As I have said, this constituted a significant lacuna in the judgment.  The starting point ought to have been the value of the claim.  The district judge’s failure to address that issue suffices to entitle this court to look at the matter afresh and exercise its own discretion on allocation.
19.              The claim form stated: “The claimant estimates the total value of the claim to be up to £21,325.67.”  Before the district judge and before me, explanations were given orally and in writing of how the value of the claim had been calculated; these rested primarily on the alleged availability of rescission and the detailed outworking of that relief if granted.    Although the claim may or may not succeed and, if it does, the relief granted may or may not be that which the claimants seek, it seems to me that the value of the claim is for present purposes clearly to be taken as being in excess of £10,000 and probably in excess of £20,000.  That is not to say that the claimants will probably recover that amount if they succeed on liability.  The defendant has raised substantial arguments for the conclusion that any remedy will be of limited value.  It is not difficult to see that, whether the matter be viewed in terms of equitable rescission or in terms of relief under the 1974 Act, the making of necessary adjustments so as to avoid giving the claimants a windfall may result in an outcome no more favourable to them than the defendant says.    However, if the claimants’ case is accepted at trial, they may well obtain relief with a value such as they contend for. That is not a matter that can be determined at this stage.  For the purpose of allocation, the value of the claim ought properly to be taken as the value advanced by the claimants.
20.              The nature of the remedy sought has already been mentioned.  It is not an entirely straightforward matter: this is a fact likely to have been in the mind of DDJ Evans, who will well have understood that, whatever the merits or de-merits of the case, the actual remedy available in equity or under the 1974 Act is a potentially complex and nuanced issue.
21.              This in turn has relevance to the likely complexity of the case.  It is unlikely that the facts or the evidence will be complex.  But the outworking of the facts in terms of liability and remedy is unlikely to be straightforward.  This is reflected in the terms of Judge Jarman’s order, and I think that it was probably also in DDJ Evans’ mind.
22.              In this connection, I say a word about legal representation, which is a matter that has been raised in argument before me.  It is obvious that the ambit of the small claims track is capable of including cases where legal representation might be appropriate or even necessary.  Nothing that I say is intended to deny or contradict that.  However, it is also clear from the passages that I have mentioned in the Rules and the Practice Direction that the basic idea is that the small claims track is designed for low-value claims that people might be expected, with a degree of assistance from the court and with simple case management directions, to conduct from beginning to end (including at trial) by themselves and without the need for legal representation.  For the respondent, Ms Mattu submits that this consideration does not apply in the present case, because the claimants have entered into a CFA.  In my judgment, that cannot be the correct approach.  If it were, the fact that these particular claimants have a CFA would be a reason for an allocation that would not be thought appropriate where the claimant did not have legal representation; it would, moreover, treat the prior existence of legal representation as a justification for allocating to a track on which legal costs are not recoverable. 
23.              More generally, it seems to me that there is a real danger in cases of this sort that issues and arguments that can only be addressed and presented competently by lawyers, to whom perhaps the issue might indeed appear simple if they are experienced at the work, will end up being shunted into the small claims track where litigants in person are not going to be able to present the case.  Personally, I should very much doubt whether litigants in person are likely to have competence in questions of secret commission or section 140B of the Consumer Credit Act 1974.  I also do not think that it suffices in those circumstances to trust to the wisdom and experience of the district bench: first, not all those who hear cases in the small claims track will have expertise in, or even much experience of, such cases; second, although judges will seek to assist litigants in person they do not act as advocates and are not responsible for researching the law on all the cases that come before them in the small claims lists or for presenting those claims; third, before the matter even comes before a judge the claimant must have been able to identify and formulate the claim that he or she wishes to advance.  In cases such as the present, the defendants will almost always have legal representation, even if only in-house.  The risk of depriving claimants of the real opportunity of obtaining legal representation seems to me to be a wider reason why some caution is required before cases of this sort are allocated to the small claims track, at least where that is not the normal track for them under rule 26.6.
24.              The next specified factor, concerning the number of parties, does not have any particular relevance one way or the other in the present case.
25.              In this case, there is no counterclaim or Part 20 claim.
26.              The amount of oral evidence that is likely to be received would not require allocation to the fast track.  However, I should expect that, if the evidence were tested and considered properly, the hearing would last for more than three hours.  One day ought to be allowed for the trial.
27.              The claim has no importance for persons other than the parties.
28.              The views expressed by the parties regarding allocation do not take the matter further, because there was no agreement.  (Of course, even if there had been agreement, it would not have bound the court.)
29.              There are no particular matters before me concerning the circumstances of the parties, beyond those that I have mentioned.  However, I mention again the fact that allocation of claims of this sort to the small claims track is liable to impose greater burdens and difficulties on claimants acting in person than on institutional or corporate defendants.  This may be justified and even inevitable where claims are simple and of low value.  But where the claims are of higher value and have a degree of complexity, there is good reason to give proper weight to the value of the claims and not to disregard too readily their complexities.
30.              The district judge placed some weight on what she referred to as the “wider practice” that she understood to be “developing in response to claims of this nature.”  I do not think that a consideration of that sort is impermissible.  However, it does not seem to me to be of much assistance in the present case.  First, the mere fact of a practice cannot be sufficient to justify it.  If it were, mistakes would become self-authorising by repetition.  The rationale for the practice will be relevant, as will the success or otherwise of its operation.  Second, apart from the district judge’s reference to her own understanding, the information before me does not establish the existence of any settled practice or, if there is one, what it is.  Third, it is unclear what the district judge meant by “claims of this nature”.  Claims concerning brokers’ commissions or unfair relationships will vary widely, both as to details and as to value.  If a practice is to be relied on, it will at least be necessary to consider whether the justification for the practice in the generality of cases applies also to the specific features of the case under consideration.
31.              In conclusion, in my judgment the district judge failed to analyse the case correctly or to have regard to the relevant factors.  For this reason, I consider that I am entitled to substitute my own view regarding allocation.  I also consider, though with greater hesitation, that the conclusion reached by the district judge was itself outside the scope of the proper exercise of her discretion, having regard to the value of the claim and the nature of the issues.  In my judgment, the proper track for the claim is the fast track.  I am satisfied that it would be disproportionate to allocate a case of this financial value with an expected length of trial of one day to the multi-track.