Commercial Debt Recovery Claim Costs to Increase
If you go back just a few years Court fees just about covered the cost of issuing a claim, never mind the cost of the administration and hearings involved in concluding a case. In recent years Court fees have increased at a steady pace until now. The Ministry of Justice has just announced new fees for the issue of claims over £10,000 to be set at 5% of the claim value. The cost of interim hearings is also expected to increase sharply, although no implementation date as yet been set.
In a letter to the Ministry, most senior judges expressed concern over the dramatic increases, expecting them to adversely effect small and medium businesses disproportionately. In its report the Ministry, interestingly commentated that the full cost of Court services provided should be met by the parties involved in public service cases, making it clear that businesses considering litigation should be aware that they will be expected to pay the full cost privately and not rely on state subsidy.
Debt Recovery or Alternative Dispute Resolution?
Its clear to us at Advocate that while an increase in Court fees is overdue, this is another attempt to push creditors in to time wasting, unproductive, alternative dispute resolution methods, has as been the trend in recent years. If a business as failed to pay, you don’t want to hear why, you just want to be paid.
Along with the other increases announced the 5% issue fee is expected to contribute £120 million each year to the Government’s coffers. Further costs increases still in consultation could add an additional £55 million if approved.
Let’s hope that these increased funds are invested in the system that will be producing them so that modernisation of the courts continues. Surely a system that delivers efficient justice quickly will silence the doubters!
Read what the Law Society Gazette has to say.