On the 22 July 2015, the Ministry of Justice (MoJ) announced a new consultation on court fees. This comes less than six months after the initial review and increase in February/March this year.
If the latest proposals are implemented, this will lead to a further substantial increase in fees for parties involved in commercial disputes.
The headlines of the proposals appear to be that:
As we have already seen, these proposals have the potential to lead to a considerable increase in the overall annual legal bill for businesses with significant litigation portfolios as claimant and/or defendant. This could potentially have a negative impact on the UK’s competitiveness as a centre for commercial disputes.
For claimant parties, these increases will put further pressure on the initial investigation stage and their approach to how and when they issue proceedings.
Issuing on a claim before the merits have been fully established due to limitation or other factors will be an even less attractive proposition – early investigations and/or standstill agreements will be ever more preferable in that regard.
On the other hand, the higher fees should assist a claimant in a strong position to put further costs pressure on their opponent to engage and make settlement proposals at the pre-action stage.
On the defendant side, those who are unsuccessful will of course be particularly affected by the increased fees as they will pick up that additional liability of the successful claimant’s costs bill.
That said, the further increases could well deter some of the more spurious claims being brought against our banking clients as speculative claimants are forced to ‘invest’ more in the action from the outset.
Overall, while the proposals are aimed at raising more income for the MoJ it is also very likely that parties will be more willing and focussed on settling disputes by alternative methods, such as negotiation or mediation, in an attempt to avoid paying these new fees.
These proposed fee rises are expected to be consulted on over the next couple of months. Given the MoJ’s previous stance, however, and the speed at which the last fee increase was implemented following the consultation, parties would be wise to consider the potential implications now to mitigate any adverse impact if the proposals are implemented.
It is anticipated that legal representatives will increasingly require monies on account wherever feasible in advance of the fees being incurred.
TLT will advise on further updates when they become available.
This publication is intended for general guidance and represents our understanding of the relevant law and practice as at July 2015. Specific advice should be sought for specific cases. For more information see our terms & conditions on www.TLTsolicitors.com