The contrast between the Ministry of Justice’s stated intent that ‘We want to make sure that access to courts and tribunals is available to all.’, shown on the fees page of the Court Service Website, and the Ministry’s proposal to increase court fees this April, could not be clearer. The judiciary’s critical views, expressed in the Civil Justice Council’s response and reports in the Law Society Gazette, are worth reading, and they rightly point out that these increases will deter SMEs from seeking to recover what is due to them, and make it more likely that debtors will evade justice.
It is proposed that where the debt or damages claimed are in excess of £10,000, the court fee will be increased to 5% of the amount of damages claimed, up to a maximum fee of £10,000 for claims of £200,000 and over, while claims for an unspecified sum will be charged at the full £10,000 fee. The application of the 5% flat rate means that the fee for a claim of £15,000 would rise from £610 to £750 (a 23% increase), while the fee for a £100,000 claim would rise from £1,115 to £5,000 (a 348% increase); see the table in the Civil Justice Council’s response to see how this is likely to affect you. If you have a claim worth more than £10,000 which you need to have resolved in court, we suggest you issue proceedings before the end of March 2015.
There is no such thing as perfect justice no matter how well funded the court system, so with the proposed court fees increase adding to the overall costs of litigation, it is worth considering the alternatives which might deliver a result you can live with. In the construction industry, the wider availability of adjudication following the Local Democracy, Economic Development and Construction Act 2009 (still often known as the "new construction act") means that for most cases you might as well pay an adjudicator’s fees instead of a court fee and get an enforceable decision far more quickly than you would in litigation. If you can convince your opponent that you intend to litigate, they may agree that a pre-action mediation is worth trying rather than incur the risk of having to ultimately reimburse your hefty court fee. Any settlement agreement arrived at in mediation but which the payer fails to honour is likely to be upheld by a court via summary judgment, which can be enforced far sooner than a judgment obtained after a full trial.
As you may be aware, applications to enforce adjudicators' decisions and/or settlement agreements are still subject to court fees. We await the full Fees Order and will issue updated guidance as soon as it is available.
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These notes have been prepared for the purpose of an article only. They should not be regarded as a substitute for taking legal advice.