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Court fee can be claimed from defendants despite exemption

Lethem: Still a loss where fee remission used

There are “strong public policy grounds” for allowing fee-exempt claimants to claim their court fees from defendants rather than the taxpayer, a judge has ruled.

Ordering a defendant to pay the fee, His Honour Judge Lethem said he had “some sympathy” for the argument that it was wrong for defendants to obtain a “windfall” because the claimants had an exemption.

The court heard in Ivanov v Lubbe that Panayot Ivanov, whose had started his road traffic accident claim in the portal but later exited and issued part 7 proceedings, accepted a part 36 offer of £6,500.

Costs were agreed with the exception of the issue fee of £455. The defendant questioned his liability to pay the fee on the basis that Mr Ivanov “was, or may have been, entitled to fee remission” and it was not reasonable for him to have incurred the fee.

Mr Ivanov applied for an order that the defendant pay his court fee. District Judge Davies dismissed it, without considering the underlying issue as to whether the claimant should have taken steps to invoke the ‘Help with fees’ scheme.

HHJ Lethem, sitting at the Central London County Court, said the defendant had not made any distinction between case law based on fees and case law based on insurance.

“It follows that unless one can distinguish the insurance position from the fee remission position, then the rationale of the insurance-based cases would travel through to fee remission cases.”

As a result, the judge said it was “difficult to see why a logic that applies to a claimant who has alternative sources of funding”, whether from the state, from insurance or any other source should be different to a claimant with the right to an exemption from court fees.

HHJ Lethem said the “thrust of the case law” was that the claimant “has an election” as to who to recover from.

He agreed with counsel for the defendant that the burden of proof was on the claimant to show that it was not unreasonable to forego the fee remission scheme.

He said CPR 44.3 made it clear that “the burden of proof on a standard basis assessment lies on the receiving party to satisfy the court that the costs were reasonable and proportionate”, and that the court was assessing costs in deciding the fees issue.

However, the judge agreed with counsel for the claimant that there was a loss where fee remission was used.

“The public purse is depleted by the amount that would otherwise have been paid.

“On this basis, there is less in the public purse to devote to the justice system as a whole. Thus, any suggestion that there is not loss where fee remission is utilised is misconceived.”

HHJ Lethem said counsel for the claimant was right to characterise the dispute as over who bore the loss – the public purse or the tortfeasor.

He said there was nothing in the fee remission scheme that “required its use” by an eligible claimant. “The wording of the scheme did not inevitably lead to the conclusion that it was reasonable to place the burden of the cost of the court fee on the state.”

The judge, who sits on the Civil Procedure Rule Committee, allowed the claimant’s appeal and ordered the defendant to pay the court fee.