On the evening of 4 March 2015, the House of Lords discussed and approved the amendment to the Civil Proceedings and Family Proceedings Fees Order.
This has brought about several changes to the court fees incurred by different claims. As of 9 March 2015, these are the fees which claimants will be obliged to pay in order to receive the money won in court:
• Any claim of a sum of money between £10,000 and £200,000 will be subject to a fee of 5% of the total amount claimed. Claimants will be able to benefit from a small discount on this amount if they issue through Secure Data Transfer (SDT) or Money Claims Online (MCOL).
• Any claims worth a total amount over £200,000 will incur a fixed fee of £10,000.
These new fees represent a significant change in the way that court fees are incurred. If you take a claim of £150,000 as an example, under the old system it would have attracted a fee of £1,115 to be paid to the court. Now that the changes have been implemented, this same claim amount will be subject to a much increased fee of £7,500.
Any claim with a total value of less than £10,000 will not be affected by the introduction of the new fee system.
As of 9 March, if a claimant does not declare the full amount which they are claiming, they will be subject to paying a court fee of £10,000 as standard. This is the fee applicable to unlimited total claims and is relevant to all claims which are issued outside of the SDT or MCOL.
If the claimant is filing a claim which relates to the interest amount on a certain sum, the fee is calculated according to the total amount of the claim with the interest included. In this instance, it does not make any difference whether the proceedings are carried out using the SDT or MCOL.
It is absolutely vital that all parties adhere to all pre-action protocols before they issue any proceedings seeking litigation. It is not advised to rush a claim through the system without having thought through the whole process beforehand and taking into consideration the impact that the changes in the court fees payable could have on the end result of the case. Any claims which are withdrawn partway through the process could result in costly fees being incurred by the claimant personally.
Lord Faulks was responsible for proposing the changes in the House of Lords on the evening of 4 March. He spoke of his passion to protect access to justice in the UK and about the absolute rule of law. He also stressed the importance of having a court system which is properly funded so that it can continue to offer justice to as many people as possible. Lord Faulks referred to the government’s proposed £375 million investment in the judicial system over the next five years, and he proposed that contributions should also be made by those who use the courts to generate further funding.
Lord Faulks reiterated the fact that although the court fees have seen a substantial increase under the new system, claimants should remember that these fees would be recoverable from the defending party if the claim was successful. The court fees do not need to come out of the compensation awarded to prosecuting parties. He also reminded all those present that these fees are merely a disbursement of the money awarded and that they are absolutely non-negotiable.
These court fees are technically still under review. If the new system is seen to be ineffective, then the new fees will not be kept in place, but as it stands they cannot be challenged in any civil or family law cases. The increase in the fee amount has been justified by Lord Faulks as a fair way of gaining back some of the costs encountered in the legal processes pertaining to justice.
As these changes have only just come into place, the eventual impacts of their increases on the firms and individuals who choose to undergo litigation processes in the UK are not yet clear. It will have to be a case of waiting to see what exactly will happen a few months or years down the line.