Just a few months ago in March 2015, we saw the then Coalition Government introduce a hike in court fees. Despite widespread criticism from the Judiciary and court users, the Ministry of Justice (MOJ) under the new Conservative Government has announced proposals to increase court fees even further.
Under the newly introduced “enhanced fee” system, the upfront issue fee amounts to 5% of the value of the claim, with an upper cap of £10,000. Whilst at first sight this may not sound drastic, a closer inspection reveals otherwise. For example, the fee for a claim with a value of £190,000 has increased by a stark 622%. The MOJ’s recent proposals set to increase the £10,000 cap to ‘at least’ £20,000. They also call for a general 10% uplift to all other fees in civil proceedings. Landlords with possession claims will be particularly hard hit with a fee increase of 26% to £355.
These changes are expected to generate an estimated £120 million per annum and form part of proposals to modernise the court system and increase efficiency. However, the front-loading of costs could be counterproductive. Potential litigants may look at alternatives to issuing court proceedings which could ultimately reduce the revenue generated by fees. This has certainly been the case following the introduction of employment tribunal fees, with a stark 70% fall in claims between 2013 and 2014.
The impact on access to justice and damage to the UK’s international competitiveness as a centre for dispute resolution is yet to be seen. The new proposals come just as the House of Commons Justice Committee announces plans to commence an inquiry into exactly that. The deadline for written submissions is 30 September 2015 and its findings will be eagerly awaited. That said, the Government has in the past shown little willingness to back down on plans even in the face of widespread criticism, particularly from the Judiciary.