New Court fees will come into force on 22 April 2014. In some areas these fees show significant increases. One of these is in possession claims and this will cause an impact on the private residential sector.
The current fee for a residential possession action is £175, or £100 where the online PCOL system is used. This fee will be changed as part of a simplification process so that a single fee will apply for all non-money claims. However, it will also rise to £280. This represents a 60% fee increase for possession cases. There will remain a discount for cases commenced through PCOL but it is much reduced as the new PCOL fee is £250. This is a massive 150% increase! Undoubtedly this will massively reduce the incentive to use the PCOL service and will probably lead to Courts doing more paperwork.
It could have been (slightly) worse however. Originally there was to be no discount for online claims but there remains a discount of sorts albeit much reduced.
Surprisingly the cost to tenants has not entered the government's mind. It was pointed out to them that this cost would simply be passed on to defendants. Noting this the government stated it was right that it should be. That is quite right where there is a genuine cause for this. However, it remains the case that landlords who have served a tenant with an s21 notice are forced to go to Court because local authorities will not treat the tenant as a priority until a possession order has been obtained. In these cases the increase in fees actually repreosents a charge to landlords and tenants to get the local authority to do something that it is statutorily obliged to do in any event. Looked at it this way an increase of this level is almost indefensible.
It is clear that the government is determined that court fees should reflect the cost of cases more accurately. How this will actually impact on possession claims is uncertain. Unlike claims for money which can be resolved by other means such as mediation possession cases generally have to go to court. The pressure will continue to be on landlords to come to terms with tenants to secure a surrender in return for waiving rent arrears that they will be unlikely to recover or by agreeing to return a deposit in full without deductions rather than to incur an increased court fee.