In 2015 we saw some substantial rises in court fees, including, in particular, fees for issuing claims. This rise in fees saw vehement opposition in some quarters, on the basis that it would become uneconomic or prohibitively high for some claimants to bring their claims. We have now started to see examples in practice where, on the face of the claim form, claimants may have not paid the correct issue fee. There have been a number of recent cases in which the courts have considered this issue, in response to attempts by defendants to knock out claims on the basis of limitation arguments following payment of incorrect court fees. As the cases make clear, the approach that the courts will take depends on the reasons behind the payment of the incorrect fee. The calculation and payment of correct fees is something that claimants' and defendants' solicitors need to be aware of, or they may face potential allegations of negligence.

Abuse of process

In the case of Lewis v Ward Hadaway (2016) solicitors deliberately understated the value of a number of claims in order to defer payment of the correct court fees. Although the pre-action correspondence made clear that the claims would be hundreds of thousands, the claim forms stated that damages would be limited and the court fees paid to issue were calculated accordingly. The claim forms were issued, and just before service the claim forms were amended to state that much more was claimed, and the appropriate additional fees paid. The solicitors had a history of this conduct, which had been found by several District Judges to be an abuse of process before it was repeated here.

The Judge, Mr John Male QC, held that issuing a claim form in these circumstances, with a statement of value lower than the true value of the claim and in the knowledge that it would be amended later was an abuse of process. Ultimately however, the court held that the claims should not be struck out on this basis because the prejudice to the claimants would be great, as they would lose the opportunity to have arguable claims for substantial sums of money tried, and by contrast there was limited prejudice to the defendant. The Judge also expressed some concern about the delay in the defendant bringing the application to strike out, as the disparity in the fee would have been apparent on service

However, summary judgment was granted to the defendant in respect of a number of the claims on the basis that they were barred by limitation. In these claims, the claim form had been received by the court within the limitation period, but was issued after limitation had expired. The claimants were seeking to take advantage of the rule in Page v Hewetts (2013) which is: that if a claimant has done all that he reasonably could to bring a matter to the court for its process to follow, the claim will be treated as brought for limitation purposes on the date that it is received by the court. For the rule to apply the claimant must establish:

  1. The claim form was delivered in due time to the court office;
  2. Accompanied by a request to issue and;
  3. The appropriate fee.

The Judge found that in these eleven claims, the claimants had not done all in their power to set the wheels of justice in motion as they had conducted themselves in a manner that was abusive, and did not pay the fee required in time. Therefore, the rule did not apply.

Non-abusive conduct

Dixon & Ors v Radley House Partnership (2016) involved a dispute about the value of the claim which the claimant had advanced and the appropriate court fee payable to issue the claim. There was no abusive conduct involved.

The defendants argued that where a correct court fee to issue had not been paid, the proceedings issued by the court did not stop time running for limitation purposes, and sought to rely on Lewis v Ward Hadaway. Stuart-Smith J noted that, if the defendants were right, it followed that each and every claimant who issued proceedings without paying the correct fee that may be seen as retrospectively appropriate for the claim, would have failed to stop time running pursuant to the Limitation Act.

The court found that:

  1. where there was no abusive conduct, and the court has in fact set the wheels of justice in motion by issuing proceedings but the claimant has not paid and the court has not requested the correct fee, there was no argument that the proceedings had not stopped time running for limitation purposes.
  2. however, in the situation to which Page v Hewetts applied, in the period between when the claimant proffers the inadequate fee with the claim form, and when the court issues proceedings, the failure to proffer the correct fee will prevent the conclusion that proceedings have been brought for limitation purposes up to the moment that the court issues the claim form.

In relation to calculating the correct fee Stuart-Smith J held that: "assuming that the Claimant's behaviour is not abusive, the fact that the Claimant hopes or intends to bring a claim which cannot be either articulated or quantified at the time of the issuing of proceedings should not require payment of the fee that would have been payable if it had been articulated or quantified. It is common experience that a Claimant will issue a claim form when he is able to articulate and quantify one claim or one aspect of a claim but not others, even though he hopes and intends to bring them when he can. In such a case it is, in my judgment, both conventional and proper for the Claimant to protect himself by including general words which, he hopes, will be sufficient to be a vehicle for the further claims or quantification if they can subsequently be pleaded. If and when the further claims or quantification can be pleaded, further fees may become properly payable".

In this case it was sufficient that the claimant had paid the correct fee for the claim which had been articulated in the claim form, even if (in the absence of abusive behaviour) the claimant intended to later claim further amounts, and so the claim had been properly "brought" for limitation purposes. The Judge noted that a range of options were open to the court if the correct fee is not paid: the court might refuse to issue, or payment of the fee could be directed and if that order was not complied with the claim might eventually be struck out.

Conclusion

This is an area of practical importance to all litigants which is sometimes overlooked:

  • It may be attractive to claimants to seek to pay a lower issue fee in circumstances where, in higher value claims, the issue fee is very substantial, it may be temporarily difficult to fund this amount, and the issue is pressing as the claim is about to become statute barred.However, it is clear that the courts will take a very dim view of deliberately misstating the value of claims and paying lower fees accordingly.In Lewis v Ward Hadaway the Judge suggested that perhaps, if a financially strapped claimant cannot pay the full issue fee until later, and he seeks agreement from the defendant and expressly tells the court, it may be that there would be no abuse of process.
  • Claimants and their solicitors will bear the risk of the court refusing or failing to issue a claim form if the appropriate fee is not paid, and if up against the limitation deadline may be running the risk of the claim becoming statute barred. If the appropriate fee is not paid the court may require top-up or payment of further fees.As such, claimants should be careful to calculate and pay the correct court fees. (In particular in Dixon v Radley House, Stuart-Smith J flagged up changes since March 2015 to a partially quantified claim.)
  • Proceedings should be adequately drafted to cover limitation for all anticipated claims.Time will only stop running for those claims which are included in or comprehended by the proceedings as issued.The risk for the claimant is that if any further claims are not identified with sufficient clarity in the proceedings when initially issued, a later amendment may involve a new claim for which time did not stop running and the court may refuse permission to amend.
  • Defendants should consider the position in relation to limitation and the court fees paid for the claim advanced by the claimant, and investigate if limitation appears to be an issue by making enquiries with the court as to when the claim form was received.Any applications by the defendant should be made on a timely basis.