Massive hike in Court Fees a game changer?

Posted: Thursday, 29 January 2015 @ 11:33

The Ministry of Justice has fine tuned it's proposed massive hike to court fees and it is now out for a final consultation which closes on 27 February 2015.

So what are the changes, when are they likely to come into effect, and what impact will they have?

The MoJ claim that the vast majority of claims are for values of less than £10K. For those claims there is no proposed change in the court fee payable on issue of the claim. But for £10K and above there will be a straight 5% issue fee, capped at £10K. Stray above £10K and the effects will become painful. The real impact will be for claims of £25K or above where there will be percentage increases from 105% through to a whopping 622%! Given that the majority of claims do not go through to trial it could be said that the government is looking not to just meet the cost of justice but to make a profit on it.

A few examples show the impact:

Claim for £25K: issue fee currently £610. New fee £1250. 105% increase.

Claim for £70K: issue fee currently £910. New fee £3500. 285% increase.

Claim for £125K: issue fee currently £1115. New fee £6250. 460% increase.

Claim for £190K: issue fee currently £1315. New fee £9500. 622% increase.

Claim for £200K: issue fee currently £1515. New fee £10K. 576% increase.

So when will they come into force? This may depend on Parliamentary time for the necessary legislation, and of course any impact by a change of government in the election in May, but it seems that the government intends the fees to come into force by the Autumn, possibly earlier.

So what will be the impact? You may think that only companies would be involved in claims for such high values, but think again. The biggest impact will be on individuals who somehow have to find such massive fees from their own pockets. This must have a significant impact on access to justice. Again many will be dusting off their copies of Magna Carta! With the massacre of Legal Aid in recent years it is clear that access to the courts is ever for the very rich, and occasionally for the very poor.

The proposed changes will encourage more to follow the route of Alternative Dispute Resolution such as mediation, but ADR is not always appropriate, or indeed successful. This will inevitably give defendants a big advantage. They will be less likely to negotiate, knowing that the claimant will face a huge fee to issue court proceedings.

Anyone considering a claim would do well to get their skates on and pursue the process of negotiation and perhaps ADR as quickly as possible so that if it fails they have time to issue any necessary court proceedings before the court fees go up.

Nigel Musgrove
Business and Litigation Solicitor
Tel: 0845 003 5639

Blog by Nigel Musgrove
Nigel has been providing dispute resolution advice as a solicitor for over 35 years. As well as advising SMEs and business owners on disputes he also offers a specialist licensing law service. View profile
Call Nigel on +44 (0)1285 847 001 or by email
This blog is not intended to constitute legal advice, nor is it intended to be a complete and authoritative statement of the law, and what we say might be out of date by the time you read it. You should always seek legal advice to confirm whether or how any information in this article applies to your particular situation. We offer a free telephone consultation to discuss your particular circumstances.

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