The government has dropped plans for ‘enhanced’ court fees specifically for commercial cases, but is now targeting increased fees for the hundreds of thousands of general civil applications made each year.
Enhanced fees are those that are above cost price, and the Ministry of Justice (MoJ) said that after last year’s general court fee increases failed to raise as much as expected, it needed to find another £55m from enhanced fees.
In finally announcing the way forward on proposals first published a year ago, the MoJ first confirmed that it would press ahead with a new enhanced fee to issue money claims of 5% of the value of the proceedings for claims worth £10,000 or more.
This would be capped at £10,000, the fee payable for a claim of £200,000, with a 10% discount if lodged electronically.
The MoJ rejected concerns expressed in last winter’s consultation that its proposals could make it harder for people to access the courts, or that they would harm the competitiveness of the country’s legal services in attracting international litigation.
It said only 10% of claims would be affected by the new fee – while remissions remain available for those who qualify – and that research consistently showed that the level of court fee is a secondary or non-existent consideration in the decision to litigate, especially in big-money international cases.
But the MoJ decided against introducing a higher maximum fee (of £15,000 or £20,000) or a higher hearing fee of £1,000 a day specifically for commercial litigation, saying there were “practical difficulties” in implementing them – particularly defining ‘commercial litigation’ and ensuring that lower-value and/or non-commercial cases in the Rolls Building were not caught.
It also dropped its plan to raise the fee for an application to issue a divorce from £410 to £750 after strong opposition in the consultation.
Instead, the MoJ started a fresh consultation – ending on 27 February – which proposed increasing the fees charged for county court possession proceedings from £280 to £355 (or £325 if using the Possession Claims Online facility), from which it expects to raise £17m a year.
Secondly it proposed increasing the cost of applications without notice or by consent (which account for around two-thirds of the total) from £50 to £100, and from £155 to £255 for an application on notice which is contested. This would raise £38m a year.
There would be exemptions for applications to vary or extend an injunction for protection from harassment or violence, applications for a payment to be made from funds held in court, and applications made in proceedings brought under the Insolvency Act 1986.
The MoJ said around 700,000 general applications are made each year, the large majority of which are in civil proceedings.
In his introduction to the consultation, justice minister Shailesh Vara said: “Increasing court fees will never be popular or welcome. But I am sure that those who choose to litigate in our courts will continue to recognise the outstanding qualities our legal services offer and the excellent value for money they provide.”