Issue fees for claims worth over £10,000 are set to rise following the latest consultation on so-called “enhanced” court fees.
On 16 January 2015 the Government published its response to its consultation, announcing that the fee to issue a claim to recover more than £10,000 will rise to 5% of the value of the claim, up to a limit of £10,000. The Government is also consulting on raising the price of making an application to the Court during proceedings. The Ministry of Justice intends to charge more to litigants than their case costs the Court service, to raise revenue, so litigants with high value claims will be subsidising others.
In its response to the consultation, the Government suggests that it has carried out some research which shows that litigants will not be put off by increased Court fees and the number of claims issued is unlikely to be affected.
However, I think that in times of austerity the price is foremost in a person’s mind when they buy a service and that litigants may well consider other forms of dispute resolution if there are cheaper alternatives, such as mediation. Such a dramatic increase in upfront costs may well affect the appetite of individuals and small to medium-sized business to litigate. I understand that certain organisations are considering challenging the proposals, so the government may row back from the proposals. If they are introduced as planned then we could see a reduction in claims issued, interim applications made, and a further increase in the numbers of self-represented litigants, as parties seek to cut legal costs elsewhere in order to meet the cost of the new fees. In a high value claim, a mediator’s fee is likely to be lower than the Court issue fee.
It is already a fact that over 90% of cases settle before trial, so why spend money on litigating and case management, preparing for a trial that is unlikely to happen, when an early mediation can save all those costs and stress?