On the 16th January 2015, the Ministry of Justice published a response to the consultation on reform of Court fees.
Under the reforms, Court fees to issue claims at Court in England and Wales are going to be substantially increased where the value of the claim is more than £10,000.
The changes will be introduced later this year, at the opening of the Parliamentary Session for 2015/2016.
It is anticipated that the increased Court fees will generate substantial revenue for the Courts each year.
Under the changes, the Court fee to issue claims with a value between £10,001 and £200,000 will be calculated at 5% of the value of the claim. Claims with a value of more than £200,001 will face an issue fee of £10,000. The maximum issue fee payable under the changes will be £10,000.
Whilst currently, Court issue fees are calculated by reference to the value of the claim, at the moment, the maximum Court fee payable for claims exceeding £300,000 up to an unlimited value, is £1,920.
By way of further comparison, at present, the Court fee to issue a claim with a value of £100,000 is £910. However, under the new changes, the Court fee will increase to £5,000.
Increased Court fees will undoubtedly impact on the way cases are litigated in the future.
The changes are likely to have the most impact on individuals and small businesses, as the increased cost at such an early stage in the litigation process could deter prospective Claimants from issuing proceedings at Court.
The increased fees may also encourage Claimants to try and resolve disputes by Alternative Dispute Resolution (ADR) prior to the issue of proceedings.
Where limitation is an issue, prospective Claimants will have to think very carefully whether they want to issue protective proceedings at Court and incur the Court fee or seek to enter into a “standstill agreement” to extend time for limitation purposes.
It is likely that over the next few months, prospective Claimants will issue claims at Court before the changes are introduced, to avoid paying the increased Court fees. This will lead to the Courts becoming busier and could slow down the litigation process.
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