Golden pound sterling signs raining.

Last year the amount paid in court fees by claimants wishing to bring Part 7 Claims [1] dramatically increased following the recent implementation of the Civil Proceedings and Family Proceedings Fees (Amendment) Order 2015. For instance, a claim of a value between £200,000.01 and £250,000.00 now attracts a hefty court fee of £10,000 as opposed to a much less significant figure of £1,515 before 9 March 2015.

The temptation therefore might have been to issue a claim of a lower value in order to incur a less substantial court fee, and then amend the size of the claim at a later date. Or if pressed by a closing limitation period, to issue protective proceedings for a lower sum, pay a lower court fee, and buy time to assess the position. Such an approach has been met with hostility by the courts, following a recent judgement [2].

Details

The case involved a number of claimants deliberately understating the value of their claims in order to avoid paying the full and correct court fees for the claims which they intended to make. It was clear from the pre-action protocol letters that it was always the claimants’ intention to increase the size of their claims after the issue of proceedings, just before service. Through amending the claim forms to reflect a claim for larger sums in this way, the payment of the larger court fees was effectively deferred.

Even though the balance of the outstanding larger court fees were paid by the claimants, it was ruled that the limitation period for bringing the claims had expired. Through deferring the payment of the court fees, it was deemed that the claims were not properly issued within the limitation period. The claimants’ ploy was seen as an abuse of process. Not only had the courts been deprived of fees, the court also had to undertake additional administrative work in processing the amended forms.

So what does this mean for claimant litigators going forward?

Issuing proceedings with a reduced claim value to avoid a higher court fee, or to buy time to assess the claimant’s position, simply isn’t an option. Even where there is doubt over the size of the claim, a prudent claimant would be cautious and pay a fee in line with the highest value of their claim. Otherwise the possibility of the claim being issued outside its limitation period following the payment of an incorrect court fee could well arise.

A further interesting twist is a recent to proposal to impose a fixed costs regime for all claims valued up to £250,000. The costs of bringing proceedings and the extent to which you might be able to recover them from your opponent could be set to change further still. So watch this space, there are interesting times ahead!

This post was edited by Thomas Fardon. For more information, email blogs@gateleyplc.com.

[1] Civil claims brought under Part 7 of the Civil Procedure Rules. Part 7 claims are used where there is likely to be a dispute in respect of the facts of the case.

[2] Lewis v Ward Hadaway [2015] EWHC 3505 (Ch)


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This blog is intended only as a synopsis of certain recent developments. If any matter referred to in this blog is sought to be relied upon, further advice should be obtained.