South Australia has recently changed the law for minor civil claims reducing the limit from $25,000 to $12,000. The reduction in the monetary limit for minor civil claims will come into effect on 1 August 2016 however proceedings already underway in the Magistrates Court as of this date will be unaffected.
Prior to 2013, the threshold for bringing a minor civil claim in the South Australian Magistrates Court was $6,000. This was changed to $25,000 in 2013 pursuant to the introduction of the Statues Amendment (Courts Efficiency Reforms) Bill 2012 into Parliament. One of the purposes of the increase was to keep in line with interstate jurisdictions. However, in most Australian states the small claims jurisdictional limit is around $10,000 with only Queensland having a limit of $25,000.
Notwithstanding this, during the parliamentary process to pass the legislation the limit was changed from the originally proposed $12,000 by way of amendments introduced in the Legislative Council to $25,000.
The minor civil claims jurisdiction in South Australia does not have the same procedural or evidentiary requirements that apply to general civil claims and importantly, requires claimants to appear without legal representation. That means any increase to the monetary limit of minor civil claims has the potential for increasingly complex matters to be dealt with in court proceedings without the assistance of lawyers being involved or present.
As many contractual, leasing and debt collection matters are resolved in the Magistrates Court, it is important that senior executives with commercial interests in South Australia are aware of any changes to the law for minor civil claims. The changes mean that those matters between $12,000 and $25,000 that had previously been dealt with in the more informal jurisdiction will now proceed as a general civil claim in the Magistrates Court.
Prior to this latest amendment, the South Australian Office of Crime Statistics and Research (OCSAR) conducted a comparative review of statistics of minor civil claims lodged in 2010-2011 and 2013-2014. This review found that during 2013-2014 for minor civil claims lodged of amounts between $6,000 and $25,000 there was:
- an increase in the number and complexity of such claims;
- a possible reduction in the number of days to finalise a defended claim; and
- an increase in the number of days from lodgement of a claim to finalisation.
In addition, a number of respondents provided feedback to OCSAR during the review stating that an increase in the limit to $25,000 had led to a corresponding increase in the time it was taking for Registrars and Magistrates to determine claims in this jurisdiction.
Senior executives intending to bring a claim in the South Australian Magistrates Court in either the minor civil claim or civil claim jurisdictions are encouraged to seek legal advice to see whether this recent legislative change will affect their proceedings.
About Sarah Bartholomeusz:
Sarah Bartholomeusz is the founder and CEO of You Legal, a new category of law firm providing top-tier corporate and commercial legal services and corporate governance support to ASX-listed companies as well as growing businesses at all stages of their life cycle. In 2015 You Legal was the winner of the Telstra Business Women’s Award in the Start-Up category for South Australia. As Australia’s leading online legal counsel, Sarah has taken over a decade of experience and committed to ensuring businesses have access to legal advice that minimises their risks and maximises their potential.