Making a profit out of justice? The latest increase in court fees

Substantial increases to court fees were introduced on 9 March 2015. These replace the previous fee system, with fees now calculated at 5% of the value of claims between £10,000 and £200,000. Where the claim is for a sum of over £200,000, or for an unlimited amount, the fee is capped at £10,000. Fees for claims under £10,000 remain unchanged. A comparison between the previous and new fee system is set out in the table below:

Value of Claim   

Previous fee

New fee

Percentage increase

£10,000.01 £455 £500 9.89%
£15,000.01 £610 £750 22.9%
£50,000.01 £910 £2,500 174.7%
£100,000.01 £1,115 £5,000 348.4%
£150,000.01 £1,315 £7,500 470.34%
£200,000.01 £1,515 £10,000 560.07%
£250,000.01 £1,720 £10,000 481.39%
More than £300,000 or an unlimited   amount £1,920 £10,000 420.83%

Consultation on the potential increases first started in December 2013, with the government response to broad ranging and critical feedback received from professional and public bodies published on 16 January 2015. The draft order was laid before Parliament on 19 February 2015 and given final approval on 4 March 2015. A last minute confirmation that the changes would be going ahead led to a rush to issue claims in the week ending 6 March in order to avoid the increase.

Comment

Despite increases of up to 560% the new legislation appears to have been passed with relatively little attention in the media and public eye. This is notwithstanding scathing criticism towards the proposed policy and the Lord Chancellor and Secretary of State for Justice, Mr Grayling, from the judiciary and from the House of Lords, which passed a Motion of Regret on 4 March. Indeed, the proposed amendment sought by the House of Lords was the addition “…but that this House regrets that the draft order unfairly and inappropriately increases fees for civil proceedings above costs and so damages access to justice”.

This is the crux of the issue; that the fee increases which have been introduced set the cost of issuing a claim at higher than the actual costs incurred by the court. The courts will therefore be seeking to make a profit from litigation, which is directly against the constitutional prohibition in the Magna Carta on selling justice. The dubious statutory power under which the government has sought to pass this amendment, and which refers to such costs as ‘enhanced fees’, is found in one of the final sections of the Anti-social Behaviour, Crime and Policing Act 2014, which was itself only passed last year. This section, and its implications, apparently received little to no scrutiny when considered by Parliament.

The government’s “sensitivity analysis” impact statement predicts that there will be a maximum 10% fall in demand in the use of courts as a result of these increases. Professional and public bodies estimate the figures to be closer to 35% in the case of individual claimants and 49% in claims brought by SMEs. It is, of course, well recognised that litigation is an expensive and risky undertaking, and claimants often have to carefully consider the cost and quality of their legal representation. However, while there are various litigation funding options for lawyers’ fees, these court fees are an upfront cost. The risk that claimants with a perfectly good case will not have access to the remedies that the law provides, because of a lack of personal means, severely undermines the principles of the rule of law and limits access to justice.

Nevertheless, with further fee increases proposed, including raising the cost of issuing possession cases, it appears that the government is ploughing on with its revenue raising policies. Meanwhile, the Law Society has issued a pre-action protocol letter for judicial review over what they refer to as a ‘flat tax’ on court fees. We cannot afford not to closely watch this space.

This guide is for general information an interest only and should not be relied upon as providing specific legal advice. If you require any further information about the issues raised in this article please contact the author or call 0207 404 0606 and ask to speak to you usual Goodman Derrick contact.