As of 9 March 2015 civil courts will levy a 5% fee on all claims valued at more than £10,000, with the maximum fee capped at £10,000. This represents a hefty 420% increase. As a partner in our Personal Injury Team, specialising in occupational disease claims, you might expect me to be concerned about the changes, and of course I am. By way of example, I was forced to issue a case last week to avoid an increase in the fee payable from £1,720 to £10,000.
But this is a development that will affect everyone. In a letter to the Ministry of Justice (MoJ), the Lord Chief Justice, Lord Thomas warned there was 'likely to be a disproportionately adverse impact on small and medium sized enterprises (SMEs) and litigants in person.' He made the point that court fees have to be paid 'up front and in full,' and predicted that litigants could be driven from the quicker, cheaper Intellectual Property and Enterprise Court, where costs are capped at £50,000 towards the uncapped High Court.
The Association of Personal Injury Lawyers (Apil) has mobilised a vigorous campaign against the changes. The Forum of Insurance Lawyers (Foil) has also raised objections. Foil President, Nick Parsons has said: 'Many individuals and SMEs will struggle to pay the new level of fee to start a claim. Foil also foresees the law of unintended consequences coming into play. This decision has been taken as a revenue-raising measure by the State, yet many of the defendants who will eventually end up footing the bill are themselves public bodies; local authorities and the NHS, for instance. These are institutions that can ill afford such increased costs in these straitened times.'
The Bar Council warned the increase would either stop many small businesses from pursuing a claim altogether or land them with a sizeable court fee. The Civil Justice Council and the Law Society have also voiced concerns.
The MoJ predicts the fee increase will raise £120m.