Yet another Court fee hike proposed by Goverment

Following on from my blog post earlier this year on Court fee rises in March 2015, I attended the Civil Litigation Section Conference at the Law Society. The Civil Litigation Section is a Law Society led information provider, sounding-board and lobby group for civil litigators.


At the Conference there was much disquiet amongst practitioners that the new Court fees would effectively bar some claimants from having access to justice due to the extortionate rises, in some cases from around £1000 to nearly £8000. This would especially hit claims with a value of £200,000 to £300,000 - this range being a sweet spot in SME breach of commercial contract claims. It effectively means that savvy contractors can deliberately breach a contract of around that value knowing that an SME will not be able to afford the Court fee to commence proceedings. Sometimes the only way to make a breaching party sit up and take notice is to file proceedings - this old tactical trick is now effectively blown out of the water if the injured claimant cannot afford the fee.


At the Conference the Civil Litigation Section appealed to its members to provide examples of clients who were unable to commence proceedings as they could not afford the new Court fees. They were then going to present this information to the Government who has given them until December to do so.


It is with some surprise therefore to discover that the Government has just announced a consultation, of which responses need to be returned by 15 September (!), which proposes more Court fee rises. The proposal is to double the Court fee from £10,000 to £20,000 for all money claims over £400,000. The Government's justification is that such claims are normally initiated by large corporates or High Net Worth individuals and it is thus 'fair' to ask them to contribute more.


As a litigator who deals with SMEs and High Net Worth individuals, claims in the range from £400,000 to £700,000 are also very common. Having to pay £20,000 to commence a breach of contract claim worth £400,000 will certainly dissuade such clients from commencing litigation. Sadly, some of these breaches of contract are so harmful to SMEs that the losses inflicted can lead to their ultimate downfall. If they cannot afford the £20,000 Court fee then this constitutes a clear injustice.


It follows that the problem with mediation is that the breaching party is not forced to come to the table, unlike with proceedings. As practitioners we will now have to advise SME clients to incorporate arbitration clauses into their commercial contracts as sadly a High Court solution may be beyond their financial reach. A sad day for the High Court indeed and a wholly unnecessary blotch on its stellar worldwide reputation for consistently delivering impartial and affordable justice.