Announcement of Increase in Court Fees
On Friday 16 January 2015, the Parliamentary Under-Secretary of State for Justice, Mr Shailesh Vara, released a statement announcing enhanced court fees.
Most significantly, the Government will be introducing increased fees when new proceedings are commenced for the recovery of money. The fees for issuing these claims will be 5% of the value of the claim where the claim is for more than £10,000, subject to a maximum fee capped at £10,000.
In his statement, Mr Vara has stated that 90% of cases will not be affected by the new fees scheme. In addition, he estimates that these higher fees will deliver £120 million in additional income allowing investment in better service in the Courts. Mr Vara has also claimed that these enhanced fees are vital in order to preserve access to justice.
However, Lord Thomas has expressed concerns in relation to the impact on small to medium enterprises and litigants in person. The fees, which could be disproportionate to the damages ultimately recovered, would need to be paid up front and in full. Lord Thomas recognised that this significant sum could have a detrimental effect on the parties ability to pay for legal representation and thus potentially jeopardise the 'access to justice' premise which the scheme is intended to facilitate.
The Civil Justice Council shared this critical view, stating:
“It is a matter of grave concern that the ministry is contemplating such a significant reform, and one that carries with it potentially far-reaching and damaging consequences for access to justice, on such a poor evidence-base. To take a vitally important example, the draft explanatory memorandum makes clear that there is no knowledge of what the impact of this proposal will be on SMEs as a key sector of the court-user community and the wider economy.”
The enhanced Court fees have also faced criticism from Lord Thomas on the basis that these Court fees may drive work away from UK lawyers. Lord Thomas states:
“The fees proposed are 25 to 100 times greater than those payable in New York. A real concern will be uncertainty over future fee increases and the possible imposition of daily hearing charges putting major litigators off London, particularly as commercial cases can take years to develop.”
Notwithstanding this criticism, the government continues to consult on the increase of other court fees.
To read 'Response to consultation on Court Fees – Enhanced Charging' in full, please click here.