On 9 March 2015, the court fees payable by anyone wanting to bring a claim for over £10,000 increased, in some cases very substantially so.
The court fee will now be 5% of the total value of the claim up to a fee cap of £10,000, leading in some cases to increases measured in the hundreds of percent. Whereas, the old fee for bringing a claim worth between £15,000 and £50,000 was £610, now the fee is between £750 and £2,500 depending on the exact amount of the claim. A claim for £200,000 which previously attracted a fee of £1,515 will now require a filing fee of £10,000, an increase of £8,485 or 560%.
Concerns have been raised in the media about these very significant price increases, brought in with very little warning by the government. It has been said that the people most affected will be those pursuing debts owed to small businesses and those with personal injury and clinical negligence claims. The Law Society is challenging the Government’s actions and currently look poised to bring Judicial Review proceedings, having commented in their press release that these increases:
may put people off going to court when they have genuine claims. For example, those out of work due to injury caused by negligence would not risk losing what little money they had left on court fees, even if they had a strong claim.
may encourage large companies to deny liability, knowing that the injured parties would not be in a position to fund expensive court fees.
may lead to small business insolvency as unpaid invoices mean cash flow and overdrafts are already stretched. For some companies, insolvency will be the only option.
For now court fees for the recovery of debts below the £10,000 threshold remain unchanged, probably meaning that recovery costs for the majority of debts owing to small businesses will remain largely unaffected. However, even small businesses should heed the change and take the opportunity to review their credit control procedures, perhaps consider seeking payment before delivering goods or rendering services.
Personal injury and clinical negligence claimants are usually able to retain the services of a solicitor who will carry the cost of the court fees. Whilst this will increase the cost to firms such as Barlow Robbins of offering a serious personal injury practice, ultimately the higher fees now payable should be recoverable from the Defendant in the event that the claim is eventually successful.