Fee hike hurry

Is commercial litigation about to suffer the same fate as the Employment Tribunals?

Despite a campaign by the Law Society and litigation groups up and down the country, the House of Lords has approved an increase in court fees by up to 600 per cent, which it is hoped will contribute £120m a year to the court service.

The rise followed a consultation process which began in December 2013. Since then, an increase has seemed inevitable, but what was unexpected was just how big that increase would be. It means that, as of the beginning of this week, there will be a 5 per cent fee on all claims valued between £10,000 and £200,000. The levy will be capped at £10,000.

The Law Society has warned that the proposals will have a detrimental effect not only on solicitors but also on consumers and small businesses. It has already set the wheels of a judicial review of the decision in motion and issued a pre-action protocol letter.

The decision has raised concern from all quarters. Personal injury lawyers have been among the most critical, shining a light on the government's assertion that fees were not a major factor in a person's decision about whether or not to go to court and questioning how much injured parties will be able to afford to bring a potentially high-value claim.

The justice minister Lord Faulks has supported the change. Last week at the Global Law Summit (sorry, I know I promised not to mention it again), you will recall Lord Pannick's casual mockery of the Lord Chancellor, while Faulks sat uncomfortably close by. Pannick, one of the policy's main opponents, made a last minute attempt to block the change, expressing his "regret" and "astonishment" at the decision to proceed and declaring that it will further impede access to justice.

Following the announcement, practitioners
all over the country were advising their clients on the merits of rushing through a claim before the fees increase, potentially saving them thousands of pounds.

These fears will ring true with employment lawyers, who saw an initial 81 per cent year-on-year reduction in clais when fees were introduced to the tribunals for the first time in July 2013. At the time, the fees were said to have been introduced to reduce "frivolous" and "malicious" claims from disgruntled employees, a claim which has been undermined by the statistics that have followed (the most shocking being the 90 per cent reduction in sex discrimination claims).

Despite several union-backed challenges in Scotland and England, the fees have remained in place. The latest attempt to call the government to account has come from within, with Vince Cable calling on Chris Grayling to implement a review of the system and asking for assurances that the fee regime has not proven to be a "barrier to justice".

Like the rise in court fees, the changes to the tribunal system have not only meant that parties bear much higher financial costs at the outset, but the losing party faces significantly increased costs, too. These changes will not only restrict access to justice, but leave an even larger hole in the court services accounts as individuals and businesses either look elsewhere to settle their disputes or face the prospect of not pursuing their rightful claims
at all.

At the time of writing, solicitor Ana Lelliott of Hamlins has already received over 2,000 signatures to her online peitition against the fee hike. All practitioners should lend their names to it and fight against this fee rise just a little bit longer.

Kevin Poulter, editor at large #SJPOULTER | editorial@solicitorsjournal.co.uk

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