As part of the Government’s aim for court fees to cover the cost of running the civil courts system, these fees will be going up with effect from 22nd April 2014.
In 2012-2013, the Ministry of Justice recovered 80% of the cost of the civil court system from fees, leaving a deficit of £125 million. They wish to address this by raising fees to recover their operating costs and overheads. However, their income estimates assume no behavioural changes as a result of the fee changes.
The new fees
Some of the new fees for starting a claim, particularly for mid-range judgments between £1,500 and £15,000, are significant increases and may well deter many claimants.
According to Registry Trust, the average judgment values in 2013 were:
- £2,521 - consumer
- £3,926 – commercial, non-corporate
- £3,952 – corporate
Taking these average figures, a consumer claim for £2,521 rises by 21% from £95 to £115 and by a much larger 40% when issued through Money Claim Online (MCOL) from £75 to £105.
Possession claims are also increasing – going up from £175 to £280 and from £100 to £250 via Possession Claims Online (PCOL). PCOL may only be used for rent and mortgage arrears.
The fees for enforcement remain unchanged: sealing a writ of execution (including the transfer up of a County Court judgment to the High Court for enforcement) remains at £66, and third party debt order and charging order applications remain at £100.
The use of HCEOs will clearly remain the preferred option of enforcement given the lower instruction costs and their significant rates of success when compared to the County Court Bailiff.
Remission of fees
There will still be remissions of full or part fees for those who cannot afford them, based on disposable capital and gross monthly income. This is set out in the Courts and Tribunal Fee Remissions Order 2013 which came into force on 7th October 2013.
Single County Court
Section 17 of The Crime and Courts Act 2013 removes geographical jurisdictional boundaries of county courts to establish “the County Court” which will also come into force on 22nd April 2014.
The County Court will have a single seal and a single identity to reflect its national jurisdiction. County Court business will take place at County Court hearing centres which will be the locations of the current county courts and their administrative offices.
The aim is to simplify the task of allocating cases before a judge and transferring cases between court centres.
Whilst I agree with the principle of making the civil courts self-funding, I think that these rises will make it harder for those who are struggling financially, possibly as a direct result of the money they are owed.
For small businesses in particular, they may feel the risk of throwing good money after bad becomes too high to justify.
Many of those on low incomes will be eligible for fee remissions, the wealthy will still be able to afford the fees, but for the majority in the middle, consumers and many small and medium businesses, will think hard before they try to recover what they are owed.
If this is the case, a drop in claims may undermine the whole rationale behind this of making the civil court system operating costs and overheads funded by fees.