Further to our recent post regarding the MOJ pressing ahead with increase to court fees, Gordon Exall, barrister at Zenith Chambers and author of Munkman on Damages for Personal Injuries and Death, considers the impact of the proposed increases.
What is the thinking behind these increases?
The thinking is quite explicit. The court service, and court fees, are now to be a way of raising money for the Exchequer. This was set out in the (in my opinion, wholly inadequate and poorly researched) impact assessment. The income generated through fees in the civil courts now broadly covers the full costs of the service:
‘The policy of setting some fees above costs (“enhanced fees”) aims to contribute to the HMCTS’ financial position.’
What are the plans?
The plans are to greatly increase court fees across all areas:
- for cases above £10,000 the court fee will be 5% of the value of the claim
- for claims above £250,000 the fee will be £10,000
- the fees for making applications and payable during the currency of the action are also vastly increased
Are any particular type of claim/litigants likely to be most affected?
All litigants will be affected. Responses from the judges state that it is particularly small and medium sized enterprises that will have difficulty in litigating. In effect this increase undoes some of the work of the Jackson reforms. The increases make litigation less affordable. It will have a major impact on those enterprises that regularly have to issue proceedings to enforce payments of invoices.
Is there any risk to UK and London as a litigation forum of choice?
There is no doubt that there is now a battle to determine litigation forums, with some judges recently taking up work in Singapore. I suspect that court fees will play a part in this. The key thing to note is that someone in Singapore is obviously awake to the need to make the courts attractive to litigants. This is in the context of an enterprise culture. On the other hand, someone in London is using court fees to stifle enterprise. If this carries on there will only be one conclusion.
What does all this mean for lawyers and their clients?
Issuing and litigating is now an even more expensive business. The costs of litigation must be explained and considered in even more detail.
Should lawyers be taking any immediate action?
- support the Law Society’s campaign to review this decision
- learn the rules in relation to the remission of court fees and those circumstances where court fees are returned
- consider dispute mechanisms outside the courts
I have always been a sceptic in relation to point three. However, it is clear that the people making decisions about these issues either have no idea at all of what they are doing, and the impact of their acts, or they are hostile to the very concept of litigation taking place.
Litigation is the means by which a civilised society sorts out its disputes. These fee increases make it harder for large tranches of society to participate in litigation. They may now have to find alternative means of obtaining justice. The whole episode is shameful.
Interviewed by Evelyn Reid.
The views expressed by our Legal Analysis interviewees are not necessarily those of the proprietor.