Court fees hike set for legal challenge

A “tax on those seeking justice” has seen some court fees rise by more than 600 per cent after new charges were brought in earlier than expected.

In January, the government decided that fees to issue proceedings for the recovery of money would be set at five per cent of the value of the claim for all claims over £10,000. The court fees affect cases involving debts owed to businesses as well as personal injury and clinical negligence claims.

It was originally thought the new fees would take effect in April but following approval by the House of Lords, the new regime was implemented on 9 March.

The fee to issue proceedings to recover £50,000 has now risen from £815 to £2,500 and for £150,000 from £1,115 to £7,500. The maximum fee to issue proceedings will be set at £10,000, the fee payable to issue a claim for £200,000.

The Law Society, the body that represents solicitors in England and Wales, has joined with other legal organisations to send a pre-action protocol letter to the Ministry of Justice, the first step towards seeking a judicial review to challenge the new fees.

Law Society president Andrew Caplen said: “The government’s policy on ‘enhanced court fees’ amounts to a flat tax on those seeking justice. 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.”

The potential increase in court fees is likely to create additional challenges for construction firms seeking to recover money owed, although there may be other options for resolving disputes that would be more appropriate and cost-effective.

It may be possible to resolve the issue through negotiation and mediation. Further, the Housing Grants, Construction and Regeneration Act 1996 includes the right to refer a dispute arising under a construction contract to adjudication. If your contract does not provide for the right to refer a matter to adjudication, agreement between both sides to refer the matter to adjudication must be obtained.

Adjudication is usually a 28-day process and can be very effective in obtaining swift payment. Legal costs are not recoverable in adjudication but Palmers offers fixed fee adjudications for all debts under £100,000. For more information, please contact Adam Davis.