I am being threatened by a company to pay a disputed liability NOW or face additional Solicitor costs

Question

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.

Answer 1

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

• "Small claims tribunals" from the Australian Competition and Consumer Commission (ACCC)
• "Debt Recovery – Small Claims" from the The Arts Law Centre of Australia

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

• Small Claims Limit: $15,000
• Name of court: Victorian Civil and Administrative Tribunal (VCAT)
• Option to use a higher court: Yes, Magistrates' Court.
• Lawyers (solicitors) allowed: Only if the Tribunal is satisfied that the other party will not be unfairly disadvantaged or in certain specific circumstances, see https://www.vcat.vic.gov.au/what-vcat-does/legal-and-professional-representation#when-you-don%E2%80%99t-need-to-ask-for-permission
• Can a solicitor's costs be recovered by the winner: Not normally, but possibly if the losing party has acted improperly or made a claim with no legal basis.

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.

Answer 2

new-south-wales

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.