Increased civil court fees will lead to 'disaster'

The Law Society has hit out at the government's decision to drastically increase court fees for cases involving financial claims.

Any claim worth over £10,000 will be charged 5 per cent of the value of the claim, and must be paid before any proceedings begin.

The government has said that this will policy change will ensure that the civil court system can sufficiently fund itself.

Andrew Caplen, Law Society president, said: "Court fee hikes introduced by the government from April spell disaster for access to justice, pricing the public out of the courts and leaving small businesses saddled with debts they are due but unable to afford to recover."

He added: "We will not let these changes go through without challenge. As well as responding to the latest consultation - which closes in February - we will be pressing the government to reverse its decision which will have a far-reaching impact on both our members and consumers."

There is a £10,000 cap on the fee which can be charged which comes into effect for any claims of £200,000 or more.

This means that a claim of £190,000 will see the biggest increase, (622 per cent) up from £1315 to £8185.

Both the Civil Justice Council and the most senior judges in England and Wales, led by Lord Thomas of Cwmgiedd, have also expressed their "deep concern" at the changes.

Poor research base

All three parties have expressed their concern at the governments research base and procedure, which has been described as "limited," "insufficient," and "poor".

In his joint letter to the government, Lord Thomas noted: "The research evidence base for these proposals is far too insubstantial for reforms and increases of this level. The 2014 research involved questioning just 31 civil users (only 9 of which were businesses)."

While the Civil Justice Council said: "It is a matter of grave concern that the Ministry is contemplating such a significant reform, and one that carries with it potentially far-reaching and damaging consequences for access to justice, on such a poor evidence-base.

The government also decided that claims with an unspecified amount will be subject to the maximum £10,000 charge, regardless of the final outcome.

This is most likely to affect personal injury cases where a valuation will not have been completed at the start of the case, and would clearly deter some claimants.

Arbitration award

Lord Thomas pointed out that the government has failed "to make clear whether claims for the enforcement of arbitration awards would be treated as "proceedings to recover a sum of money" or not".

If they are treated as "proceedings to recover a sum of money", claimants will incur an extra legal fee, as they "are simply seeking peripheral support to the arbitration process from the court".

An arbitration claim differs from a normal civil claim as liability and awards will have already been determined; the court is simply acting to give effect to those proceedings.

Andrew Caplen said that as a result of the changes, "state provision for people to redress wrongs through the courts is the hallmark of a civilised society," and it is at risk of being lost.

Binyamin Ali is assistant editor of Private Client Adviser