Government proposes higher court fees for commercial cases

Out-Law News | 06 Dec 2013 | 9:43 am | 3 min. read

Companies seeking to recover large sums through the civil courts could be charged up to £20,000 in fees under proposals put forward by the Ministry of Justice (MoJ).

It is consulting on increasing the court fees charged in cases involving claims for money on a sliding scale, with the possible introduction of a system where the fee is calculated as a percentage of the amount under dispute in the future. It is also considering a percentage-based fee system for commercial proceedings with higher issue and hearing fees; or higher fee caps in commercial proceedings than that set on other claims.

"These cases often involve significant sums of money but, under the current arrangements, these cases are subject to the same fee regime as any other money claim brought before the civil courts," the MoJ said in its consultation paper.

"Our proposal for increasing fees for money claims would also apply to money claims in commercial proceedings, and one option would be for commercial proceedings to be subject to the same fee regime as standard money claims. However, the Government believes that, for this specific group of cases, litigants obtain a much greater benefit from being able to litigate their disputes through the UK courts. We believe that it is reasonable and proportionate for those bringing these proceedings to make a greater contribution to the costs of maintaining the courts," the consultation paper said.

The paper sets out two alternative proposals for commercial cases involving claims for money, which would apply whether the amount in dispute is specified or unspecified. Under the first proposal, fees would be charged on the same basis as for standard money claims and subject to the same maximum fee of £10,000, with a separate hearing fee based on the length of the hearing. The second proposal would apply a higher fee cap on commercial proceedings, of either £15,000 or £20,000 depending on the amount in dispute.

These enhanced fees would apply to all money claims pursued in the Rolls Building and at regional District Registries, and could also be extended to cover proceedings in the Mercantile Court. However, they would not apply to non-money proceedings such as possession claims, insolvency petitions and bankruptcy proceedings.

The consultation runs until 21 January 2014, and the Government hopes to introduce the changes in the spring or summer, it said.

The MoJ said that London had become "the world's leading dispute resolution centre", and was used by more companies as the seat of arbitration for international disputes than any other location. Legal exports are worth an estimated £4 billion to the UK economy a year, it said. However, under the current fee system around £100 million of court running costs per year are met through general taxation, according to the MoJ.

Litigation expert Jonathan Fortnam of Pinsent Masons, the law firm behind Out-Law.com, said that in order for the UK to remain a "global centre of excellence", an efficient court system was vital. However, he said that it would be important than any changes "preserved access to justice".

"It is also important to remember that some of the biggest commercial cases can have significant impact on citizens and taxpayers," he said. "The Government will have to strike a balance between these apparently competing interests and look deeply into the UK courts system to maintain the benefits that it brings to the UK economy and population as a whole, rather than just those who are inside its court rooms."

The consultation also proposes introducing a standard fee of £270 for non-commercial civil court cases which are not about claims for money. The current fees for cases involving sensitive family issues including child contact, financial disputes on divorce and adoption applications would remain unchanged, and fees for local authorities applying to take a child into care would be reduced. The MoJ has also proposed scrapping the £75 application fee for injunctions in domestic violence cases.

"We have the best court system in the world and we must make sure it is properly funded so we keep it that way," said Courts Minister Shailesh Vara. "Hard-working taxpayers should not have to subsidise millionaires embroiled in long cases fighting over vast amounts of money, and we are redressing that balance."

"People who cannot afford court fees do not have to pay – they can apply for waivers using the means-tested remissions system," he said.