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Ministry of Justice increase court fees – how will this affect recovering bad debts?

Issuing court proceedings and enforcement 1

The ease with which this is done may be set to change as Ministry of Justice (MOJ) proposals to increase court fees have now been accepted.

Fees are now payable by the business owner trying to recover the funds.  These fees now include an up-front payment totalling 5% of the value of any claim over £10,000.

This huge increase in court fees is likely to have a detrimental effect upon SMEs when chasing money that is owed to them.  With these increased fees many may find it less economically viable to issue claims with court costs being so high.

Examples of the court fee changes are outlined in the table below:

Claim amount Previous court fee New fee
£10,000 – £15,000 £445 (which increased from £245 in 2014) 5% of the claim
Up to £100,000 £910 (which increased from £685 in 2014) £5,000 (fixed fee)
Up to £200,000 £1,315 (which increased from £1,080 in 2014) £8,725

All court fees relating to claims below £10,000 will remain the same (scaled on the claim amount).

Senior Judges have expressed deep concerns about these dramatic increases in court fees (up to 600%) and The Law Society has called for solicitors to campaign against these new excessive fees.

There are further discussions going ahead that outline extra fees for possession claims and general applications in civil proceedings.  It is proposed that possession claim fees are set to rise by £75, while the fee for a general application by consent will increase by £50 and £100 for contested claims.

This means that now, more than ever SMEs will need to carefully consider if they can afford to recover bad debt through the court.  For more information on the new court fees and how this will affect you, contact one of our debt recovery experts on 01228 713070.

Posted: March 11th, 2015

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