Compensation boost for unhappy shoppers

Published on Sunday 31 October 2004 01:29

A CRUCIAL weapon designed for the battle against dodgy retailers and the substandard goods they peddle is about to get a badly needed upgrade.

Small claims courts, the last resort of the wronged consumer, are to have their limit on compensation awards raised from 750 to as much as 5,000 under government plans to restore shopper confidence.

The number of actions raised in Scotland has dropped by more than half in recent years to 30,000 annually because so many consumer items cost much more than the present compensation limit.

South of the Border, the government has already raised the limit to 5,000. As a result, the number of small claims actions has increased.

You do not get much for 750 these days. Large-screen plasma TVs typically cost at least 1,500. A fast PC will set the buyer back 1,000. Fridges and cookers can easily cost more than 950. Julia Clarke, the Scottish policy officer for Which? - formerly the Consumers’ Association - has campaigned for the change.

Welcoming the move, she said: "The 750 limit is ludicrously low nowadays. A lot of electrical goods are more than that, such as computers, and if you get any building work done nowadays it will take you right past 750 very quickly."

But she urged the reform to go further than just changing the limits.

The English small claims is seen as being much less formal and user-friendly than its Scottish cousin, and two years ago began allowing claims to be filed online.

Clarke said: "The [Scottish] system is far too formal. While they are changing things they should look at how they have been reformed in the small claims in England. They have done away with the wigs and the formalities, they will even come out to the house of the person who raised the action. By comparison, the Scottish system is way too intimidating."

Cynthia Hay, an artist from Athelstaneford in East Lothian, found herself caught out by the problems of the Scottish system. She bought a new Dell computer in 2002 for 1,049 and found that it was plagued by troubles. The firm refused a refund because they offered to continue repairing the machine. But she became exasperated by the saga and decided she wanted her cash back.

She was refused a refund through her credit card provider and then found the small claims court limit set at 750.

She said: "I felt shocked. I purchased the computer in good faith and from the beginning it was faulty. For the first time ever I felt disadvantaged by the fact that I lived in Scotland. Had I lived south of the Border I could easily have taken my case to the small claims court. But if I had decided to go to court without using the small claims process, the costs of the lawyers would very quickly have grown bigger than the money for the computer.

"I feel very strongly that this should be changed. I just hope that ministers will be able to push through the changes despite opposition."

Figures published by the Scottish Executive confirm that consumers’ confidence in the small claims court system is collapsing.

In 2002, the latest year for which figures are available, there were 32,256 small claims cases initiated, compared with 79,395 in 1992, a fall of 59%.

In Scotland, the cost of raising an action is 39, but extra costs for lawyers or sheriff officers who might serve a summons on the person the case is being made against, may add to this.

Taking a case to court requires filling in a form and producing copies of documents such as receipts, letters, and estimates.

While court officials will guide members of the public through the forms, consumers are left to fend for themselves when it comes to enforcing the judgement. If the losing party refuses to stump up, then the consumer must pay a sheriff officer to enforce the court ruling, although that cost may be claimed back from the loser.

In addition to a maximum cash award of 750, the maximum expenses which the court may award to a successful petitioner is 75.

But consumers who have problems with products costing more than 750 have no other option but to rise a civil action in the courts, a process which is likely to cost at least as much as the value of the disputed goods or services.

The English and Welsh have been able to take advantage of the higher limit of 5,000 since 1999. Between 1996 and 1999 it was 3,000; before then it was 1,000.

A spokesman for justice minister Cathy Jamieson, said: "Ministers have accepted the need for a change and have directed our officials to prepare proposals and options for changes to the limits. The question is not whether it should change but rather what the level of the new limit should be, having the same limit as the English system is an option, but we may set our own limit."