From April 2015, Court fees are due to increase significantly following the Government’s proposal for reform.
This increase in fees will affect all money claims with a value of £10,000 or more. Claims with a value of less than £10,000 will remain unaffected. The Ministry of Justice estimates that claims below this threshold comprise 90% of all claims; however this is yet to be substantiated. Claims of over £10,000 will incur an enhanced Court fee of 5% of the value of the claim.
By way of example, under the current system, a claim worth £150,000 would incur a fee of £1,315. However, from April 2015, this fee is set to increase to £7,500 under the new fee structure. Any claim with a value of over £200,000 will have the fee capped at £10,000, a substantial increase on the current fee for issuing a claim.
To illustrate the effects of this:
|
Value of Claim |
Current court fee |
Proposed new fee |
|
£10,000.00 |
£455.00 |
£500.00 |
|
£15,000.00 |
£610.00 |
£750.00 |
|
£50,000.00 |
£910.00 |
£2,500.00 |
|
£100,000.00 |
£1,115.00 |
£5,000.00 |
|
£150,000.00 |
£1,315,00 |
£7,500.00 |
The Government anticipates that these enhanced fees will generate an additional £120m of annual income.
The Law Society, Bar Council and other legal institutions have launched a judicial review of the Government’s proposals to increase Court fees. They accuse the Government of attempting to “sell justice” and breaching the principles enshrined in the Magna Carta. These principles state that “to no-one we will sell, to no one deny or delay right of justice”. It is argued that the Government does not have the power to raise the fees to such a high level (an increase of 600%) and in addition has breached its own consultation principles by not providing any reasoning for the increase.
Adam Caplen, Law Society president has commented that
“the Government’s hikes…will price the public out of the Courts and leave small businesses saddled with debts they are due but unable to afford to recover”.
It is possible that the Government’s proposals to increase Court fees will not be implemented in April 2015. However, prospective Claimants should consider (if it is not appropriate to use Alternative Dispute Resolution) whether they can issue their claim prior to this date and avoid these higher fees.
For more information please contact Tim Richards, Partner and Head of the Commercial Dispute Resolution team on tim.richards@michelmores.com or at 01392 687605.
