A County Court ruling could lead the way to
payment protection insurance (PPI) mis-selling claims of less than
£5,000 being allocated to the small claims track.

The move would mean that PPI claims regarding
sums of under £5,000 could be heard in a day by District Judges and
would limit the costs recoverable by the borrower’s solicitors
should they win..

The ruling in Mr Gordon Gillies v Black
Horse Limited
(2011), heard at Luton County Court by His
Honour Judge Michael Kay QC in December 2011, did allow for PPI
claims to still be allocated to the fast track if complex enough,
though such cases are expected to be rare.

Russell Kelsall, senior associate at Squire
Sanders LLP, commented: “It’s an important decision because we now
have, for the first time, a binding judgment on District Judges and
their deputies which says that the normal track for claims of
£5,000 or less is the small claims track. 

HHJ Kay QC said that Mr Gillies’ claim was
“one of many thousands of cases brought in courts throughout the
country about the selling of payment protection insurance” and that
these disputes have “been considered at a higher level than this
[Court]” meaning certain “principles have now emerged”.

The ruling takes precedent over previous and
non-binding guidance over PPI claims from HHJ Waksman QC in 2010
and HHJ Halbert in 2009, often referred to regarding the allocation
of claims.

In the case of Gillies v Black Horse,
as with many disputes over PPI according to Kelsall, it comes down
to a simple dispute: In this case, was the policy sold as
compulsory or optional?

Such a question, HHJ Kay QC noted, should not
take a court more than three hours.