Increased court fees have deterred SMEs bringing claims, say litigators

City lawyers have urged the government to scrap plans to further increase civil court fees as small and medium-sized enterprises (SMEs) avoid litigation.

Seamus Smyth and Jonathan Fozard, a partner and associate at City law firm Carter Lemon Camerons (CLC), have submitted a strong retort on behalf of the London Solicitors Litigation Association (LSLA) to the Ministry of Justice's (MoJ) latest proposal to raise court fees.

The fee for issuing a money claim increased dramatically in March 2015. For claims worth £10,000 or more, a claimant must now pay 5 per cent of the claim's value in order to issue. In July, however, the government issued a consultation to raise issue fees even further.

The March increase in fees was met with near universal condemnation from the legal profession as over 90 per cent of respondents opposed the proposals.

In their robust response on behalf of the LSLA, Smyth and Fozard said that the proportion of litigation costs borne by litigants pre-March was 'already high enough' and the government should wait longer than four months before consulting on further increases.

'The experience of many LSLA members is that the substantially increased court fees have both in themselves and/or as part of the overall cost of litigation deterred clients, particularly SMEs, from bringing claims. The LSLA's view has not changed - it generally opposes the further fee increases.'

In addition, the City solicitors argued that it was 'fundamentally wrong' to treat the civil courts as a 'commercially-traded commodity'.

Smyth and Fozard said if that was the justification for total fees, the consumer would be entitled to insist on a proper level of service and to seek redress when the service provided was inadequate or delayed.

'If anything, the service offered by the court system has become worse in recent years and many think it will become worse still in the coming years,' said the pair, pointing out how 138 courts had been shut down following the government's last round of closures.

The government's decision to ignore the profession earlier this year raises fears the latest response from Smyth and Fozard will also fall on deaf ears.

In February 2015 Smyth and Fozard highlighted key concerns about access to justice in an article for Solicitors Journal claiming defendants would 'play the system' by trading on claimants' reluctance to pay a £10,000 issue fee.

The LSLA and CLC have long campaigned against enhanced court fees and said they will continue to monitor the situation closely.

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