Substantial court fee increases proposed for commercial claims

The Ministry of Justice (MoJ) has issued a consultation proposing substantial court fee increases. For certain types of proceedings, these include "enhanced" fees aimed at recovering more than the cost of running the services to which they relate. The key proposals include:

• Introducing percentage issue fees for money claims, calculated as 5% of the value of the claim subject to a cap of £10,000, or possibly £5,000 for claims for unspecified sums. (At present, issue fees range up to £1,670 for claims of more than £300,000.)
• For commercial money claims (in the Commercial Court, Chancery Division, or Technology and Construction Court) there are alternative proposals to either (i) apply a higher cap to the issue fee, at either £15,000 or £20,000; or (ii) introduce a hearing fee of £1,000 per day, or £500 for hearings of half a day or less. (At present there is a fixed hearing fee of £1,090 for a multi-track trial regardless of length.)
• Removing allocation and listing fees, ending the process of refunding hearing fees when early notice is given that a hearing is not required, and increasing Court of Appeal fees.

In recent years the MoJ has made various proposals aimed at making the civil court system self-funding, including a consultation in 2011 (see post) which is superseded by the current proposals. We believe, however, that this is the first time the government has proposed increases which are aimed at going beyond full cost recovery. We have repeatedly opposed court fee increases, expressing our concerns at the potential impact on access to justice as well as damage to London as a centre for the resolution of international commercial disputes.

In the present consultation the government expresses confidence that its proposals "are unlikely to damage the international position of our legal services" since (based on its initial assessment) the cost of litigation is a secondary consideration in decisions about where to litigate and court fees represent a small fraction of the overall costs of litigation. It is however commissioning further research on the factors which determine the jurisdiction in which commercial cases are brought, and it "expects" that those findings will be available to help inform final decisions on its proposals.

The consultation closes on 21 January 2014 and, subject to the outcome, the government anticipates that the proposed fee changes will be implemented in spring 2014. We will be considering the proposals in detail and submitting a response to the consultation.