Underpayment of Court Fees Revisited

There have been a number of cases in the last few years that have considered the consequences for a claimant when an incorrect court fee has been paid upon the issue of a claim.  In the case of Lewis & Others v Ward Hadaway which was referred to in this publication last year, the Court found that there had been an abuse of process by claimants who had deliberately understated the true value of their claim in order to pay a lower fee.

In Wells v Wood & Another, which was heard last month by the County Court in Lincoln, this issue was once again considered.

In this case, the claimant had issued a claim shortly before the expiry of the limitation period but had paid the wrong court fee for the value of the claim.  The defendants raised the issue of limitation in their defence and the court therefore had to consider whether the claim was statute-barred (i.e. it was brought too late) because the incorrect court fee had been paid when it was issued.  The defendants argued that, without the appropriate fee being paid for the claim, it had not stopped time running out irrespective of whether or not the incorrect payment was an innocent mistake or a deliberate attempt to issue proceedings without paying the appropriate fee.

However, the court disagreed and held that a claim form issued and sealed by the court was effective for limitation purposes regardless of the fee paid and the issuing of the claim form marked the commencement of proceedings.  In the judge’s view, any question regarding the court fee was between the paying party and the court service.

The judge acknowledged that there may be instances where there is an allegation of an abuse of process in the payment of the court fee but he found that was not the position in this case.  Instead the claimant’s solicitors had underpaid the court fee because they had not properly appreciated the true value of the claim until later on and upon discovering that they immediately took steps to remedy the mistake.  There was therefore no suggestion that there had been any abuse of process.  Accordingly, the payment of the wrong court fee had no effect on the validity of the claim form and the stopping of the limitation clock.

This case appears to draw a distinction between the deliberate underpayment of a court fee and an underpayment which has occurred as a result of an innocent mistake; the former will be penalised but not the latter.

Picture of Luke Patel

Luke Patel

Luke Patel
Partner
Commercial Dispute Resolution Team
LPatel@LawBlacks.com
0113 227 9316
@LukeLawBlacks

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