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Legislative Assembly for the ACT: 1997 Week 12 Hansard (13 November) . . Page.. 4207 ..

MR STEFANIAK (Minister for Education and Training) (9.21): I rise briefly to back my colleague Mr Humphries. Prior to coming back into this Assembly in August 1994 I did quite a lot of work in the Small Claims Court. I had done some in 1988 and 1989 when the court was set up. That was after I left prosecutions. In 1993 and 1994 I noticed a significant difference. When the court was set up, it certainly attracted people who wanted to represent themselves. You would rarely see a lawyer represent people in the Small Claims Court. In 1993 and 1994, when I did a fair bit of practice in that court, it was commonplace to see lawyers representing plaintiffs and defendants there.

In the course of my practice in that particular jurisdiction I also had cause to talk to a number of people who would regularly bring cases there. A number of businesses had a number of bad debts. Those businesses spent an extraordinary amount of time taking people to court. In a small business with one or two or three employees, for one person to have to do that takes an inordinate amount of time out of the business. Often those people would need to hire a solicitor to appear for them. That of course adds to the cost.

The only cost you can be awarded in the Small Claims Court is the fee you pay, which is $32 for the first $2,000 and $70 or $75 for anything between $2,000 and $5,000. There is some limited capacity for witness expenses but nothing for professional costs. Sensible lawyers will keep their prices for representing people in the Small Claims Court down. That in itself is a bit of a disincentive to a lot of lawyers to practise there. Certainly, the costs and the time can be quite astronomical for businesses that regularly have to use that court. I think it is very sensible that the court has a restriction of $5,000. As my colleague has said, it is so much better for many businesses to utilise the Magistrates Court, where if the judgment is in their favour they can at least recoup the costs they incur through no fault of their own. That occurs quite frequently. I think there is a lot of strength in what Mr Humphries says.

I was interested to hear Mr Humphries give the limits in all the other jurisdictions. Five thousand dollars is a very sensible limit. I know from my experience in 1993 and 1994 that most of the actions brought were under $2,000. There is not a huge difference between $2,000 and $5,000. I think $5,000 is a very appropriate limit. It is a limit that is imposed virtually right across the Commonwealth of Australia. I agree with my colleague. From my practical experience in that court, I do not think the time is right now to suddenly increase the amount to $10,000.

MR WOOD (9.24): I heard Mr Humphries's argument, and in a sense he is quite correct. If I put his argument into my words, it is a deterrent against frivolous claims if you know you have to go to the Magistrates Court and face the prospect of costs. I would have been more impressed if we had had a balanced argument that recognised that a number of people do not make a claim at all because of the costs that may go against them. I understand that frequently people who have a claim for $7,000, $8,000, $9,000 or $10,000 take it to the Small Claims Court and try to settle for $5,000. That is not justice either.

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