Enhanced court fees: mitigating the impact

21 Apr, 2015

Despite widespread criticism from the legal community, on 9th March 2015 the government implemented a crippling rise in court fees in England & Wales.  Aware of the potentially devastating effect on claimants, lawyers throughout the country worked feverishly to protect their clients’ positions by issuing claims before the demise of the old fee regime.  But now that the issuing frenzy is over and the much maligned fee hike has come to pass, is there anything else that can be done to mitigate the effects of this new price for justice?

Clearly, the best way to mitigate the effects of the fee increase is to avoid paying any court fees at all.  For this reason it is now more vital than ever for solicitors acting on behalf of claimants to have a detailed knowledge of the fee remission system.   A claimant who meets the disposable capital criteria will be eligible for a total or partial fee remission if he is either in receipt of one of a number of qualifying benefits or has an income below the prescribed level.  Solicitors should make sure that they obtain detailed instructions about the claimant’s financial situation throughout the course of the case, and should be aware that this may change as matters progress.

The recent case of Nursing & Midwifery Council v Dorothy Daniels [2015] EWCA Civ 225 is a stark reminder of the importance of considering fee remission.  This was an appeal against a decision to allow an extension of time for bringing an appeal.  The extension had been granted on the basis that the respondent had not been able to find the £235 court fee before the deadline for filing.  Allowing the appeal, the Court of Appeal were quick to note that nobody had considered the possibility of fee remission, to which the respondent was almost certainly entitled.  This was an important factor leading to the court’s finding that the respondent had not made out exceptional circumstances that would justify an extension of time.

There remains a question mark over whether claimants funding claims on a CFA basis are eligible for fee remission.  Fee remission is available only to those liable to pay court fees.  If a CFA is in place which requires the claimant to meet the cost of disbursements, then there should be no issue with gaining a fee remission where the claimant meets the relevant criteria.  The situation is arguably different where the costs of disbursements are not to be borne by the claimant himself.  Although the application form does not require claimants to disclose their funding arrangements, anecdotal evidence suggests that the court is asking applicants for fee remission whether their claim is funded by a CFA.  It is not entirely clear whether this information is being used in considering the applications, or whether it is just being collated so that the government can suggest that the burden of the new fee increase is not falling on claimants themselves.  At this stage it is still clearly worth making an application notwithstanding that a CFA is in place. 

But what if the claimant cannot avoid the spectre of court fees?  In liability admitted cases one obvious avenue is to ask the defendant to help.  Applications for interim payments are commonplace and it seems that there is no reason why a defendant who has accepted responsibility for an accident should not be asked for an interim payment on account of costs as well as damages.  If the defendant refuses, CPR 44.2 gives the court a discretion as to whether costs are payable, the amount of costs and when they are paid.  CPR 44.2(8) also provides that the starting point where a party is ordered to pay costs subject to detailed assessment is that the court will order that party to pay a reasonable sum on account for costs.  Therefore, it seems that if judgment can be entered at an early stage, there should be a good argument that issue fees should be paid on account of costs well before the claim is finalised.  While this will not prevent the need to find the funds in the first place, it would reduce the period over which the claimant would be accruing interest if money has been borrowed to issue the claim.  It will also potentially be of benefit to defendants to settle these costs at an early stage if there will subsequently be an argument about who should be liable for the interest a number of years down the line.

In cases where liability remains in dispute, one potential tactic is to issue the claim at a modest level and seek to have liability tried as a preliminary issue.  If the claimant loses, then they have minimised their costs.  If they win, they will be in the same positon as a claimant in a liability admitted case and can ask for an interim payment on account of costs, at least to fund any increased issue fee that they may be liable to pay once the value of the claim has been more fully assessed.  This being said, the view that the courts will take of this kind of approach remains to be seen and it is possible that sanctions may be applied to claims that are issued at an unrealistically low level in order to avoid paying the appropriate court fee at the outset.

Furthermore, it will now be more important than ever to have an early grasp on the realistic value of the claim.  It is self-evident that if claims are pleaded at much more than they are realistically worth then the claimant is likely to over-pay on court fees.  Even if a claimant is ultimately successful, defendants will inevitably argue on assessment that their liability for court fees should be limited to the level that would have been payable had the claim been pleaded at a realistic value.  So claimants should now think carefully about the consequences of pursuing heads of damage that have limited prospects of recovery.  

Similarly, solicitors should consider whether the claimant is likely to recover damages on a 100% basis or whether a deduction for contributory negligence is anticipated.  Apportionment will inevitably have an impact on the value of the claim.  Where there is likely to be a deduction for contributory negligence, if possible solicitors should attempt to agree this before the claim is issued rather than after.  While CPR 16.3.6 requires claimants to disregard the possibility that the court may make a finding of contributory negligence when valuing the claim, there appears to be no reason why an apportionment cannot be taken into account if it is agreed prior to issue, meaning that the court fee that a claimant is liable to pay will be lower than if contributory negligence remains an area of dispute.   

It will take some time before the effectiveness of these and other approaches can be determined.  However, the fact that there are still some weapons in the lawyers’ arsenal should give a glimmer of hope to claimants in this ever changing world of civil litigation.   

 

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