Following the recent news that Britain's self-employed are losing £8.1 billion to late payments, increased court fees of more than 600% are beginning to take their toll on businesses and individuals seeking money owed to them as the Bar Council warns they are being 'priced out of court'.
Figures from the Registry Trust show there were 42,091 county court judgements (CCJs) against businesses in the first half of 2016, a 19% decrease on the previous year.
Chantal-Aimée Doerries QC, chairman of the Bar, said, “The courts risk becoming out of bounds for many as the full impact of increased court fees bites. […] By increasing court fees the government has cut off those small businesses' only real and last hope of getting that money, which is vital given how important cash-flow is to SMEs They are being priced out of court.”
The Ministry of Justice increased court fees in 2015 for money claims, which include late payments, debt and compensation. This was a blanket 5% fee on small businesses and individuals bringing claims worth between £10,000 and £200,000, with fees of up to £10,000 payable up-front. The Bar Council pointed out that it represented increases of up to 660% (from £1,315 to £10,000) on the fee payable for a claim of £200,000.
Chantal-Aimée Doerries QC continues: "In January 2015, when the plan to raise the fee for using the courts was first mooted, we warned that a court fee increase would hit small businesses. We take no pleasure in seeing that warning become a reality."
The latest Registry Trust figures show the total value of CCJs was £149m, a decrease of 12%. The drop in value and number of CCJs is the lowest since before the financial crisis of 2008. The number of High Court judgments fell by 50% compared with the first half of 2015 to 33.
Doerries QC added: “If the new Cabinet wants to show that it truly backs access to justice for all including small businesses, individuals and families it should review and recognise the real impact which the substantial increase in court fees has apparently had in restricting access to justice.”