Hike in commercial court fees could drive work away

23 February, 2015

Senior judges have expressed concerns about dramatic increases of up to 600 per cent in commercial court fees.

The government announced on Friday that the fee for issuing a money claim worth more than £10,000 will be increased to 5 per cent of the sum claimed, subject to a maximum fee of £10,000.

Calculations published by the civil justice council, which brings together judges and court users, indicate that court fees on a claim worth £200,000 will go up by £8,725.

The most senior judges in England and Wales, headed by Lord Thomas of Cwmgiedd, have expressed fears that the increases could drive work away.

“To illustrate this,” they told the government, “the fees proposed are 25 to 100 times greater than those payable in New York. A real concern will be uncertainty over future fee increases and the possible imposition of daily hearing charges putting major litigators off London, particularly as commercial cases can take years to develop.”

This comes as it was revealed that some parties taking action in the London Commercial Court will be paying much more in court fees than those in New York after the fees hike. In New York, court fees are under £1,000 for commercial cases involving claims exceeding £500,000.

The Ministry of Justice (MoJ) plans to raise £120m in extra income for the courts system through the move.

As well as worries over the impact on their own industry, top judges have also voiced their concern that the fees were likely to have a “disproportionately adverse impact on small and medium enterprises”.

Adam Marshall, executive director of policy and external affairs at the British Chambers of Commerce, said: “We remain concerned that a lot of companies in supply chains could be dissuaded from using the courts to resolve long-running late payment disputes.

“At a time when the situation seems to be getting worse not better, restricting access to one potential remedy is not encouraging.”

Justice Minister Shailesh Vara said: “Court fees are not a decisive factor when people choose to litigate as they represent a small fraction of the overall costs of litigation. We are confident London will retain its position as the preferred legal centre for the world’s leading businesses.”

At Watson Buckle we understand that there are a number of uncertainties in the current legal market that may be of concern to you and your firm, but this is where we can help. Our team of legal finance experts are able to offer a number of services that can help your firm remain financially stable and compliant that will help you should things change for the worst. If you have concerns about the changes to court fees and the effect it could have on you, please contact us.