Significant hike in legal fees to go ahead

18 March, 2015

The Government has rejected calls to cancel its court fees hike and dismissed the suggestion it will disproportionately hit smaller businesses.

It comes after the Law Society revealed that it would challenge the decision to increase commercial and civil court fees by more than 600 per cent. It has issued a pre-action protocol letter for judicial review, in which it has listed multiple grounds, including a challenge that the increase is contrary to the Magna Carta principles of not ‘selling justice’.

In response Justice Minister Shailesh Vara has said that 90 per cent of civil claims will not be affected by the changes and she promised a review of the effects on those cases that will be subject to the increased fees. The proposals to increase the fees by the Ministry of Justice will raise an estimated £120m in extra income for the struggling courts system.

However, despite the Government’s response, Law Society president Andrew Caplen disagreed. He said: “The Government’s policy on ‘enhanced court fees’ amounts to a flat tax on those seeking justice. The Government’s hikes – due to come in force from April – will price the public out of the courts and leave small businesses saddled with debts they are due but unable to afford to recover. State provision for people to redress wrongs through the courts is the hallmark of a civilised society.”

As well as the impact for other firms, senior judges expressed concern about their own industry. Members of the senior judiciary in England and Wales, headed by Lord Thomas of Cwmgiedd, recently expressed their fears about the changes to fees in a letter to the Government, which said the increase in court costs could drive work away to other cheaper jurisdictions in other countries.

The statement sent to the Government, said: “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.”

Changes to the way in which civil and commercial court fees are charged are likely to have a significant impact on the legal market and could leave some firms in financial difficulty. At Watson Buckle our team of legal finance specialists can help your firm shoulder the brunt of the changes and can help find innovative solutions to the problems raised by the increase in fee costs. For more information about our services, please contact us.