Civil Court Fees Increase

• February 2015
• Dispute Resolution , Dispute Resolution

Author: Floris Shoebridge

The Government has recently announced that court fees for the issuing of civil claims are to increase dramatically from April 2015 attracting criticism from Senior Judges, the Law Society, and other members of the legal profession.

Increases

The government first consulted on the increased fees in December 2013. There was strong opposition to the proposals however the Government has since announced that from April 2015, civil claims with a worth of over £10,000 will attract a court fee of 5% of the sum claimed. Fees will be capped at a maximum fee of £10,000. Fees for claims with a value below £10,000 fees will remain the same.

As well as a rise in court fees, ministers had suggested that daily hearing rates should be introduced for commercial cases, with a daily hearing fee costing up to £1000. Other proposals included raising the cost of issuing divorce proceedings from £410 to £750. This is said to have attracted the most opposition, and highest level of criticism. The government has since admitted that the cost to the court of issuing divorce proceedings is just £270. Both proposals have since been scrapped.

There is currently a six week consultation taking place to consider the increase of the possession claim fee by £75, the fees for general applications to be increased from £50 to £100 where they are made without notice, and from £155 to £255 where they are made with notice. This has yet to be decided, but may well be agreed to be implemented with the increases due to take place in April 2015.

The Justice Minister has stated that whilst rising court fees will never be accepted, it is right that those who can afford to make a contribution to services, should do so, and that the level of legal services provided by our court system offers excellent value for money.

Significance

Whilst high end litigation is unlikely to be deterred by the increased court fees, the increases are likely to have a significant effect on mid-level litigation. In particular it is likely to affect claims such as personal injury claims, claims brought by small to medium size enterprises, and private client work.

The Law Society President, Andrew Caplen has said:

‘Court fee hikes introduced by the Government from April spell disaster for access to justice, pricing the public out of the courts and leaving small businesses saddled with debts they are unable to afford to recover’

Litigants will have to pay the court fee upon issue and where the sum claimed cannot be specified, the maximum fee of £10,000 will be applicable. This is likely to result in instances where the fees are entirely disproportionate to the value of the claim.

To provide an example, under the current system a claim for £150,000 will attract a court fee of £1,115. From April 2015 the court fee will be £7,500.

Response

It has been suggested that the increases will encourage potential litigators to consider alternative dispute resolution in an effort to prevent such significant costs, however criticism of the increases has been wide ranging.

The Ministry of Justice has stated that cases under £10,000 represent 90% of the total cases dealt with by the Courts and therefore the proposed changes will have a minimal effect on the court system as a whole. Many members of the legal profession disagree, and there is concern that the system will become exclusive; only available to those who can afford it.

The Civil Justice Council endorsed earlier criticism of senior judges who had said that the evidence-base for the proposals was far too insubstantial for reforms and increases at such a level, and that the impact on small - medium sized enterprises, a key sector of the court user community and wider economy, had not been considered.

There is also concern about how the increases will be viewed internationally, with the court fee increases resulting in fees being 25 to 100 times greater than those payable in New York. The fees are likely to be seen as a high price to pay to commence a commercial case in the jurisdiction.

The willingness of the Lord Chancellor to abandon some proposals in relation to raising court fees, demonstrates that the views of the judiciary are taken very seriously. However, despite criticism court fees for money claims will rise as of April 2015, and the affect of the increases will only truly become evident during the course of the coming years.

Should you have any questions regarding the recent increases to civil claim fees, or assistance in dealing with a dispute please contact the Dispute Resolution Department on 01306 880110.