Having just risen to a maximum of £10,000, court issue fees for money claims may be set to rise further to at least £20,000 following the announcement of a further Government consultation which opened on 22 July 2015, and will remain open until 15 September 2015. A general rise in civil court fees of 10% is also proposed.
On 16 January 2015, the Government announced its decision to raise the fees applicable to issuing money claims to a maximum of £10,000, following Part Two of the Government consultation ‘Court Fees: proposals for reform’. The fee rise represented an increase of more than 500% against the maximum fee previously payable.
That fee rise took effect on Monday, 9 March 2015, i.e. only four months ago. The Government’s precedent was set.
If it goes ahead, the additional rise in fees now subject to consultation will affect claims worth £200,000 or more (which according to Government statistics represent 5,000 of 1.2 million money claims each year (or 0.4% of claims)). Personal injury and clinical negligence claims will be excluded from a further rise in court issue fees.
In justifying a further rise in fees, the Justice Minister, Shailesh Vara, said courts “must continue to play their part” in the effort to reduce public spending, eliminate the deficit and reduce the national debt.
Widespread concern that the March 2015 fee increase would result in the effective denial of access to justice for individuals and companies, who might not be able to afford to pursue claims following the fee increase, appears to continue to be given little weight in the Government’s newly published Consultation document. In its impact assessment accompanying the consultation, no apparent consideration has been given to how the existing fee rises have impacted on claims (if at all); the data relied on all pre-dates the recent changes. Of course, as so little time has passed since the most recent increases the available data would be of limited use in any event.
There is no certainty that a new rise in issue fees for money claims will be capped at £20,000 and the Government’s consultation document is canvassing opinion on whether or not there should be a cap on the issue fees for money claims at all.
The Government’s position appears to be that “[m]any of the claims brought for higher values will involve large multi-national organisations or wealthy individuals, and we believe it is right to ask them to contribute more.” Yet no evidence is provided to back-up this assertion. No justification or explanation is provided for increasing the fees again (by at least 100%) only four months after increasing them by 500%. But even in taking that approach, the Government appears to have ignored the very significant amounts it receives in taxes generated by the legal sector, in part because the English justice system continues (at the moment at least) to be regarded internationally as fair, stable, robust and good value for money.
These proposals increase the risk that the London legal market will start to be viewed less attractively by potential parties when considering what laws to apply to their contracts and in what jurisdictions to have their disputes settled. The Government’s aim to raise an additional £60 million in court fee income each year may well be severely hampered should prospective claimants choose not to bring their claims at all, or to bring their claims in other countries (or by way of arbitration or other alternative dispute resolution mechanisms) – an uncapped fee in particular may encourage claimants to seek justice elsewhere.
It remains to be seen whether these issues will be considered more thoroughly as part of the ongoing consultation process.