01 April 2015 #Dispute Resolution
On 9 March 2015 the Government substantially increased the Court fee for starting civil claims – in some cases by as much as 600%.
By way of example, the fee for issuing a claim for £20,000 used to be £610, it is now £1,000. A £90,000 claim was £910 and is now £4,500. A £190,000 claim has increased from £1,315 to £9,500 – 622%.
In all cases the new fee will be 5% of the value of the claim, capped at a maximum fee of £10,000.
This substantial increase in cost of issuing proceedings is likely to impact on the conduct of commercial disputes. In some cases it may make it impossible for a claimant with a good claim but limited resources to fund the fee necessary to initiate the claim, even though this is sometimes necessary to force a larger and better-funded defendant to engage in meaningful discussions. On the other hand an over-eager claimant may find that, by issuing proceedings and incurring a substantial court fee, they have suddenly made it much more difficult to secure on early settlement because costs are a larger issue than they would otherwise be.
In practice, even before the increases, a minority of claims resulted in legal action being commenced. These increased fees may have the result of creating added pressure on both parties to enter into meaningful engagement before proceedings are commenced. Alternative Dispute Resolution, and in particular Mediation, is an increasingly common way of resolving disputes, and for it is likely to be cheaper to engage in mediation than pay the court fee in many commercial disputes.