You may have heard the joke doing the rounds about how the Ministry of Justice have increased Court fees by over 600% in some cases, only it’s no joke, it is very real and has been since the 9th March 2015.
This is what the Shailesh Vara MP, Parliamentary under Secretary of State, said on the proposed increases back in January :
I am proud that we live in a country…where we have such a strong tradition of access to justice. We can only have properly funded public services if we have a strong economy. This Government has made economic recovery our first priority. Our work is not finished, and delivering further reductions in public spending will continue to be necessary over the coming years. There can be no exceptions for the courts, and those who use them. There is, however, only so much that can be achieved through cost efficiency measures alone. If we are to protect access to justice…I am convinced that there is no alternative but to look to those who use the courts to contribute more towards their running costs where they can afford to do so.
Afford to do so? The new Court issue fees consist of a levy of 5% on claims valued more than £10,000. The fee is capped at £10,000.
Therefore, by way of an example, if a self-employed Trader wanted to issue Court proceedings to recover a £40,000 debt, he would have to find £2,000 up front, just to get through the ‘Court entrance’.
In another example, a Claimant with a personal injury claim worth potentially up to £150,000 would have to find £7,500 just to bring the claim to Court.
Whilst there are exemptions to the fees payable - such as to those out of work, or on very low incomes – the majority of Court users will be subject to the new fees.
There is also a 10% reduction in the fee if the claim is issued electronically, though this will not be available to certain types of cases, such as claims for clinical negligence.
Opposition to the new fees came not just from Claimant Lawyers, but also from Defendant Firms and the Judiciary.
A losing Defendant will now have a larger Bill of Costs to pay than before. A Defendant bringing a counter-claim will now have to pay a larger issue fee.
The new fees are also going to give Claimant personal injury lawyers something else to worry about. Previously a claim with a value of £200,000 would have cost £1,515 to issue. Now it will be £10,000. Just a few of these cases will have a substantial impact to the cashflow of a small to medium sized Practice – who typically carry the exposure to disbursements for their clients – until costs are recovered at the end of a successful case. From the point of issue, until resolution can take two to three years in some cases.
There may also be an impact on overseas Litigants bringing claims in this Country. Indeed the Civil Justice Council – which brings together Judges and Court users – expressed their concerns pointing out that the increased fees would mean that it would be between 25 and 100 times more expensive to bring a claim in London, than in New York.
Additionally Senior Judges were highly critical of the Ministry of Justice methodology – pointing out the fact that the research carried out by the Ministry of Justice (this apparently consisted of just 17 telephone calls !) - was far too inadequate for such substantial increases.
However it does of course remain to be seen what the overall impact of the increased Court fees will be. The Legal sector has had to cope with wholesale changes over the last few years, and as everyone knows, Lawyers are if nothing else a very resourceful bunch!
For more information or to speak to a member of our Clinical Negligence team click here.
