Rising court fees could push some businesses into insolvency

Rising court fees could prevent some small businesses from recovering debts and so force them into insolvency, according to the Law Society.

The Society says it’s concerned that the government is considering more increases when the higher fees introduced earlier this year have “failed to deliver any tangible improvements in the court service or helped to protect access to justice”.

Law Society president Jonathan Smithers said: “There has been no assessment of the impact of increases, just six months ago, of more than 600%. Raising the fees further may render ordinary people's legal rights meaningless because they simply would not be able to afford to enforce them.

“It is wrong in principle for the courts to make a profit for government. Our members have told us that the government's fee increases will stop people being able to bring legitimate cases, particularly people on lower incomes.”

Mr Smithers fears the fee increases could put some small firms out of business. He said: “Small and medium sized businesses are also likely to be disproportionately affected by the government's proposals. Doubling some fees to £20,000 would price small businesses out of exercising their legal rights, forcing some into insolvency as they have no way of recovering debts they are rightly owed.

“Higher fees for intellectual property claims directly oppose the aims of the Intellectual Property Enterprise Court, namely to offer a less costly and less complex alternative to the High Court and Patents Court.”

The Law Society says the fee increases could also have a detrimental effect on individuals including:

  • homeowners trying to resolve construction disputes
  • taxpayers: taxpayers have a statutory right of appeal against demands for tax. By introducing fees, the government is effectively attempting to implement a financial penalty for exercising a statutory right of appeal against its own tax demand
  • people harmed by the NHS: many complex clinical negligence claims, particularly birth accidents, are high value. Further increases will limit the ability of those harmed to seek compensation for the harm they have suffered
  • immigration and asylum claims: high fees will mean families cannot afford to challenge refusal of leave to remain and other proceedings, which could lead to them being separated.

We shall keep clients informed of developments.

Please contact us if you would like more information about the issues raised in this article or any matters relating to mediation and litigation.

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