It has been nearly 18 months since the Ministry of Justice increased court fees for money claims. When the new court fees came into force in March 2015, many predicted that this change would cause a decline in money claims issued and that it prevented individuals and businesses from having access to justice. It seems that this prediction, at least for now, was right.
For completeness, it is worth noting that court fees had risen slightly on bringing claims worth up to £10,000. However, the increase in court fees had more of an impact on bringing claims worth more than £10,000 where court fees had risen to 5% of the value of the claim.
For bringing claims worth more than £200,000, the Claimant would have to pay a court fee of £10,000. These court fees are payable at the time the claims are issued.
Straight away and without going into the statistics, it is clear that these new court fees would have some sort of impact on the number of claims being brought to court. Many businesses rely on the affordability of bringing a claim against a debtor in order to recover what is owed to them but when a business is required to fund their claim privately, it is arguable as to whether many businesses can afford to pay the new court fees.
The Registry Trust Limited (RTL) maintains the statutory public Register of Judgments, Orders and Fines for England and Wales. The RTL has now released data which shows that there were 42,091 county court judgments against businesses in England and Wales in the first half of this year which is a 19 percent decline compared with the first half of 2015. The Times also published this finding recently.
It is arguable that the thinking behind the increase in court fees is so that parties who are locked in a dispute are encouraged to settle by methods such as mediation and early pre-action correspondence, other than going to court. Whilst this may assist the parties to settle disputes without potentially incurring thousands, if not tens of thousands of pounds in legal costs, unfortunately, not all disputes can be settled until court proceedings are brought.
In addition, and as mentioned above, the increase in court fees could potentially prevent a proposed claimant from having access to justice.
Take for example that a business is owed £250,000 for supplying goods and the debtor has failed to pay this sum. If the business has done all that it can at a pre-issue stage and it is left with no other alternative but to issue court proceedings but the business is unable to do so because it cannot afford £10,000 for the court fee, then the business itself may fall into financial difficulties.
These situations can be demoralising particularly if the proposed claimant has a very good prospect of success.