LATEST NEWS
Massive Increase in court fees
could mean the end to mid-sized litigation claims
The
government has announced that it will raise the fees again for starting a claim
in the County Court to bring in an estimated £120m per year in additional income
to the treasury. The new fee structure is due to come to effect before October
2015, subject to parliamentary approval.
In its
response to a consultation on “enhanced” court fees the government has
decided that the fee to issue a claim of more than £10,000 will rise to 5% of
the value of the claim, up to a limit of £10,000. The current fees to issue
claims ranges from £455 to a maximum £1,920, meaning that in higher value cases
the fees will increase by over 500%.
What
this means
This
massive increase in the costs just to start a claim is likely to discourage
small to medium businesses and individuals from litigating. It could also mean
that it is more likely that claimants will represent themselves in order to
attempt to cut down legal costs. This will no doubt lead to more delays in the
court system. Defendants will also be more wary of claims as the increased costs
will be a factor to consider when deciding whether to dispute a claim in the
first instance. Court fees have risen massively and some say that charging
claimants a percentage of the debt, just like a debt collector, but unlike a
debt collector it has to be paid regardless of whether they recover their money
or not. Some also ask: Doesn't this appear extremely unfair?. Especially as obtaining a
judgement does not mean the claimant actually receives any of their money back.
But because of the massive increase in the fees to start a claim this will make
litigation a much less attractive prospect. Knowing this may also encourage
debtors, especially dishonest debtors, to hold on to force creditors to either
fork out large sums of money to start a claim or simply write off the debt. In
many cases the debtor will be laughing all the way to the bank. And if the
debtor has no assets, absconds etc, the poor creditor will end up paying the
government thousands for the privilege of receiving a worthless judgement by
default on a business that was set up overnight and disappeared overnight, and
only for the rouge directors to pull the same scam again, and again.
Please
click here to return to
our Home Page or use the navigation
menu on the left to go to the page of
your choice.
|