Court fees set to increase
Wednesday 21st January 2015
The Government has indicated that later this year ‘enhanced’ court fees will apply to claims over £10,000. If, as seems likely, the new fees are implemented, they are likely to transform businesses’ approach to litigation.
A court issue fee is what you pay to start a court claim. Currently there is a fixed fee sliding scale depending on the value of the claim. For example, the fee for a claim of £200,000.01 is £1,515 and for a claim for £10,000.01, £455.
The proposed ‘enhanced’ fees for claims over £10,000 will be calculated at 5% of the claim’s value, up to a maximum fee of £10,000. This will mean that a claim for over £200,000 will attract the maximum fee of £10,000. For a claim for £10,000.01 the fee will be £500.
These increases are significant, especially the higher the value of the claim. Some creditors may not have the appetite to start court proceedings, in particular if the prospect of recovery is low due to the merits of the claim or the financial position of the debtor. Instead they may consider alternative routes.
For disputed matters, alternative dispute resolution may be more attractive. For undisputed matters, winding up/bankruptcy proceedings and their lower court fees will be more attractive. From the defendant’s point of view, those on the other end of claims are likely to think seriously about settling a claim before it is issued, as they will have to refund the fee if the claim goes against them.
There is also a proposal to increase court fees for possession claims by £75 to £355 and general applications without notice by £100 to £255. The consultation on these increases ends on 27 February 2015.
In anticipation of these changes it is worth reviewing any ongoing disputes now and, if necessary, issuing court proceedings before having to pay the ‘enhanced’ fees. We also recommend that businesses review their recovery protocols, given the additional funds that are likely to be needed to start court proceedings in the future.
For further information or advice on how these increased court fees might affect you or your business, please contact commercial litigation solicitor, Sallyanne Phillips, on 01274 703925 or at email@example.com.