The current court issue fee to start formal proceedings in a civil claim worth over £200,000 is £1,515 rising to a maximum of £1,920 for the highest value claims. In proposals set out in the government’s second consultation document published on Friday 16 January 2015 , the Ministry of Justice announced that it has decided this issue fee should be set at 5% of the value of the claim, capped at £10,000 for claims over £200,000 with a 10% discount if lodged electronically. This represents over a 6 fold increase in a claim worth £200,000, for example. Substantial increases in other fees are also proposed.
The Ministry of Justice rejects concerns expressed in the consultation responses that it received last year that these proposals could make it harder for people to access the courts. But how can such a hike in fees not make it more difficult for individuals, in particular, to access the courts? Who do they propose pays these substantial sums?
In clinical negligence claims, virtually no one can afford to bring a claim privately and legal aid exists only for certain types of birth injury claim. This means that the vast majority are funded by way of a conditional fee (“no win no fee”) agreement backed by an “after the event” insurance policy purchased by the injured Claimant to cover his or her exposure to court fees, experts’ fees and other expenses, and some exposure to defendant costs, should the claim not succeed.
At first blush, this seems reasonable enough; you buy a policy, you can expect the insurer to pay. Since the new rules introduced in April 2013, however, the bulk of the premium, if the claim is successful, is paid by the Claimant out of damages recovered to compensate for pain and suffering and financial losses. A significant increase in the cover required will increase the premium and hence the deduction from damages; money calculated to meet specific needs.
Moreover, claims for adults with capacity generally have to be started formally within 3 years; not long when you are recovering from, or adjusting to, a serious injury. Approaching a lawyer is rarely the first thing injured Claimants think of and so, by the time we are involved, there can often not be much time left and proceedings have to be started without all the evidence to hand. This can especially be the case in clinical negligence claims where expert evidence is required. I wonder how keen insurers will be to authorise the issue of proceedings when the evidence is not available for them to risk assess fully? This is important because no premium is payable to the insurer if the claim does not succeed under most policies, on top of what the insurer has to pay out to cover the expenses. It is already an issue under the present regime and it may well become even more difficult to obtain insurance in a case where the limitation deadline is approaching or there has not been enough time to gather all the evidence and issuing “protectively” is required.
Significantly higher court fees will also affect the insurers’ risk assessment in difficult and complex claims, again increasing the risk of cover being withdrawn or not available. Moreover, it is well reported that the changes in the rules have also increased the number of Claimants having to represent themselves; how are they to bring a claim without funding in place? In each of these common scenarios, a Claimant cannot risk proceeding without insurance and cannot afford to pay himself; the claim is abandoned and access to justice is denied.
Shailesh Vara’s Ministerial Foreword to the consultation paper is revealing. She refers to it being appropriate that “where they can afford to do so” litigants should pay more to support the court system generally and refers to those who “choose to litigate in our courts”. Not all Claimants are businesses or wealthy individuals “choosing” to litigate. Injured Claimants who, through no fault of their own, find themselves no longer able to work and support their families or who need care or equipment that the state simply cannot provide, have no choice but to litigate.
The consultation paper also refers to these changes affecting “only” 10% of claims. In my field, this 10% represents the most seriously injured Claimants. In civil claims, generally, 10% amounts to approximately 162,000 claims issued annually .
Few people are troubled by clinical negligence litigation until it affects them. The Ministry of Justice’s progressive erosion of the ability to claim compensation for injuries caused by another’s negligence - in low value claims by way of the new rules on proportionality and, in high value claims by punitive court fees - should trouble us all.