Government backs down on raising £10,000 claim cap

In a partial victory for the legal profession, the government has bowed to pressure and will maintain the cap on money claims, though a general uplift of civil court fees has been confirmed.

The Ministry of Justice (MoJ) announced that the maximum fee cap in money claims will remain at £10,000.

The new fee regime, under which money claims worth more than £10,000 attract an issue fee of 5 per cent of the value of the claim, was introduced in March 2015, despite near universal opposition from lawyers.

However, just four months after the regime's introduction the government issued a consultation to raise issue fees even further - with a £20,000 cap being suggested.

The London Solicitors Litigation Association (LSLA) responded to the consultation by highlighting that the already substantial fees had reduced access to justice by deterring SMEs from bringing claims.

With the announcement that the cap will not be increased beyond £10,000, it seems that the MoJ has, on this occasion at least, heeded the widespread concerns of the profession.

Jonathan Fozard, an associate at City firm Carter Lemon Camerons and who co-authored the LSLA's response, said: 'The March 2015 fee increases have already had the effect of discouraging people and business from bringing meritorious claims in the courts.

'The further increases which the MoJ had been suggesting would only have exacerbated the problem.'

In respect of proposals for a general uplift of civil court fees by 10 per cent, the government did not accept arguments that increases were unjustified or unnecessary.

In a written statement, the justice minister, Shailesh Vara, said it was 'right that we ask for a greater contribution from court users who can afford to pay more'.

Courts and tribunals in England and Wales cost £1.7bn in 2014/15, but the government only recovered £700m in income, added Vara.

While welcoming the decision to maintain the maximum fee cap, the Law Society's president, Jonathan Smithers, commented that the courts should be accessible to everyone at reasonable cost, regardless of their circumstances.

'The court service must not be treated as a profit centre, used to subsidise other public services. It is wrong to push through increases in court fees on top of those introduced in March 2015 when there has been no assessment of their effect,' he commented.

'High court fees contribute to the development of a two-tier justice system, they discourage people from bringing legitimate cases and make it harder for some people to get access to justice. Further increases will disproportionately affect people on lower incomes and some disabled people.'

A spokesperson for CILEx added: 'Whilst the decision to not double the court fees cap is welcome, increasing a large proportion of civil court fees is disappointing.

'A 10 per cent uplift may seem small, but comes on the back of previous increases which only widens the access to justice gap for ordinary court users and businesses. The impact of all these increases should be fully assessed before proceeding.'

John van der Luit-Drummond is deputy editor for Solicitors Journal
john.vanderluit@solicitorsjournal.co.uk | @JvdLD