Court Fees – Reaching for the Sky

Court fees are a fact of life in law. In general, a fee must be paid to commence a claim, and then at various stages thereafter (such as before the trial) or whenever a party to the claim wishes to introduce anything new – such as an application to claim against a third party, or to strike out the other side’s case.

Court fees have traditionally been relatively modest, and increased in bands based on the value of the claim. Prior to April this year, for example, the maximum fee for a claim exceeding £300,000 would have been £1,920 – a significant sum to the average person on the street, but a tiny proportion of the sum being claimed.

In late 2013 the government set in motion an investigation into whether fees in civil proceedings should go up, resulting in a decision in January 2015 that was brought into practice across the court system by 22nd April 2015. The current regime, for claims over £10,000 (meaning, any claim outside the ‘small claims track’) is calculated at 5% of the claimed sum.

At first glance a percentage-based sliding scale looks like a reasonable measure, more so than a relatively arbitrary set of bands – the more you claim, the more you pay. However, the effect of choosing that 5% means that court fees have increased dramatically for all claims outside the small claims track. From a maximum fee of £1,920, the current cap is a fee of £10,000 for claims of £200,000 and over – an increase of over 500%.

Fees for claims under £10,000 in value remain unchanged, although if the 5% rule had been applied to these small claims, the fees would actually have gone down.

This fee increase does not affect the ability of those eligible for fee exemption to bring claims, nor is it likely to have deterred large corporations from engaging in litigation, but for everyone in between, the increase is likely to be a significant obstacle to bringing a claim. Whilst this has been characterised as dissuading “spurious” claims, it is likely to put off a large number of people who have very genuine grievances that can only be solved through litigation. The increase was opposed by the Law Society, which had serious concerns about its impact on access to justice.

Although the new regime is young, just last month the government announced further sweeping increases to court fees to be implemented soon. The raft of changes includes: raising the fee cap for high value claims from £10,000 to £20,000, and also increasing fees for areas not yet touched, including the cost of bringing divorce and possession claims, and the cost of making applications in civil claims.

To take an example from one of law, the cost of commencing a possession claim recently went from £175 to £280 in an unrelated increase. Most residential landlords we represent are forced to bring claims because their tenants cannot obtain housing assistance from their local authority unless they are facing a court order or eviction, and the tenant is ordered to pay the court fee (which will show as a court judgment against their credit record unless promptly paid). The further increase in the cost of a procedure that both parties would rather avoid if it were possible will be a burden both on landlords legitimately wishing to recover their property, and on tenants who have no option but force their landlord to go to court before they can leave. Other areas of law are likely to be similarly hit by increasing the cost of litigation, particularly in cases where what is at stake can seldom have a price tag attached. The right to seek a divorce, for example, should not be restricted to those who can afford the cost of a court claim.

Picture of Luke Patel

Luke Patel

Luke Patel
Partner
Commercial Dispute Resolution Team
0113 227 9316
lpatel@lawblacks.com
@LukeLawBlacks

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