Mediate to avoid court fees?

by | Feb 13, 2015

The review of court fees currently being considered includes charging a court fee to commence proceedings based on 5% of the amount claimed which would apply to claims above £10,000 up to a maximum fee of £10,000 (i.e. on a claim of £200,000).  So for SMES and any small business chasing debts through court, it will be much more expensive.  The Lord Chief Justice said this would have a disproportionate impact on SME’s.  It is just another expense small businesses may be expected to suffer.

The Law Society President is also trying to make us aware of the implications by replying to an article in the Independent:

Court fees hike will hit small businesses

12 February 2015

The Independent

Your article on small businesses being driven to bankruptcy (11 February) is timely, as the number of insolvencies could well rise when the government increases some court fees by 600 per cent for recovering debt.

Small- and medium-sized businesses use courts to recover invoices from larger companies amounting to hundreds of thousands of pounds. They do not have the funds to pay court fees of up to £10,000 when their cash flow and overdraft are stretched.

We have surveyed our member solicitors. Their overwhelming view is that small- and medium-sized businesses may fold if debtors fail to pay monies due, knowing that they cannot afford to seek redress through the courts.

The UK prides itself on its entrepreneurs, but the hikes in court fees could cause problems for the small- and medium-sized companies that play a vital role in our economic recovery.

In the 800th anniversary year of Magna Carta, a restriction on access to justice means an ineffective rule of law, affecting both the business community and us all.

Andrew Caplen, Law Society president