An abuse of process: Circumventing the 'court fee hike

Court fees, the most significant of which is typically the fee charged for issuing a claim, represent the 'gateway' to the civil courts. Effectively, payment of the court fee is a prerequisite to being provided with access to justice - to issue a claim, a party must pay.

Last year's dramatic increase to court fees (which saw a new 5 per cent fee on all money claims of £10,000 or more, subject to a £10,000 cap) continues to undermine access to justice and equality before the law. Although practitioners breathed a collective sigh of relief when, shortly before Christmas, the government decided against doubling the court fee cap to £20,000, the Ministry of Justice has confirmed that it will be pushing ahead with a 10 per cent general uplift across the range of civil proceedings.

Of greater concern, however, is the indication that an increase to the current fee cap remains on the table, with Justice Minister Shailesh Vara confirming that although the cap will not be increased 'at this stage', it will 'keep this option under review'.

Against this background, it is unsurprising that there has been an increase in the number of claimants issuing claims with undervalued statements of quantum in order to attract a lower fee, and thereafter amending that claim to reflect the true value. However, although the principle behind such a strategy is perhaps understandable, the recent decision in Lewis & Others v Ward Hadaway [2015] serves as a stark warning to accurately state the value of a claim.

The claimants' solicitors issued a number of professional negligence claims. However, whereas the pre-action correspondence claimed hundreds of thousands of pounds, the claim forms stated a considerably lower value. This allowed the claimants to pay a lower fee. Subsequently, before serving the claim forms, the claimants amended their claims to the higher, actual amounts. The court found that issuing a claim form with a statement of value lower than the true value of the claim was an abuse of process.

Although the proper fee was paid upon amendment, the court considered that as the claimants had known of the true value of their claims and had always intended to amend those claims, their conduct caused the court to incur further costs in processing the amended claim forms and resulted in a disruption to the cash flow of the court system.

Though ultimately the court did not strike out the claims as an abuse of process because of lack of prejudice to the defendant, 11 of the claims were struck out because the claims had not been properly issued within the limitation period (because the correct fee was not paid until after expiry of the limitation period).

With the likelihood of further fee increases, it can be tempting for claimants to issue a protective claim form for a low sum and pay the lower court fee while quantum is assessed. However, this judgment demonstrates that such a strategy will not be allowed. Simply put, it is better to assume a higher value to the claim and avoid later amendments which may result in claims of abuse.

Leigh Callaway is an associate in the London commercial litigation team of Irwin Mitchell and a committee member of the Junior London Solicitors Litigation Association www.lsla.co.uk/junior