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Barrier to justice raised as court fees rise by 600%

The Civil and Family Proceedings (Amendment) Fees Order has been approved in the House of Lords. This massively increases the court issue fee to £10,000 from £1,920 (raised last year from £1,670).

In spite of Lord Pannick QC’s laudable motion of regret, the draft Civil and Family Proceedings (Amendment) Fees Order has been approved in the House of Lords; this will require those suing for breach of contract or personal injuries to pay an upfront court fee of 5% of the value of the claim, up to a fee cap of £10,000, whereas the previous fee cap was £1,920 (raised some 11 months ago from £1,670). 

Litigation Lawyers in London High Court

600% court fee rise is a real barrier to justice.

A civil justice system that is open to all is the hallmark of a civilised society because such a system forces everyone to operate within it or have their conduct exposed to the light of judicial scrutiny. Our courts force men and women of business, by both judgment and precedent example, to treat each other honestly and responsibly and within the rule of law.

At the centre of our justice system is the court, to which individuals and businesses turn when seeking to persuade those who have operated outside of legal norms to correct their conduct. Very often the commencement of legal action on a well-founded claim will lead to a financial settlement whereas very rarely will a letter before claim on the same matter ever lead to settlement.  Now, those without significant financial means may not be able to commence legal action by which they could have otherwise pressed those that commit societal wrongs to conform to societal norms.

The increase in court fees by circa 600% is a significant barrier to justice and without doubt there will be many individuals and small businesses who will, from Monday, never be able to secure legal redress or settlement from their wrongdoers.

Regrettably, the court system is being turned from a justice centre into a profit centre.

The Law Society have issued a pre-action protocol letter for judicial review to challenge the fee increases. This is supported by  a multitude of professional legal bodies such as The Law SocietyThe Bar Council, Chartered Institute of Legal Executives (CILEx), Forum of Insurance Lawyers (FOIL), Association of Personal Injury Lawyers (APIL), Motor Accident Solicitors Society (MASS), Chancery Bar Association, Action Against Medical Accidents (AvMA) and the Commercial Bar Association (COMBAR).

Without justice; example impact on SMEs

Small and medium enterprises (SMEs) are the backbone of the UK economy. Far too many of them have been mis-sold lending which includes, or is linked to, or is mark to market break costed by reference to, complex financial instruments, typically gilts, interest rate swaps or foreign exchange forwards.

Such sales are commonly entered into with major financial institutions such as Norwich Union, Aviva, RBS, NatWest, Barclays, Lloyds, HSBC, Santander, Bank of Ireland, Nationwide, West Bromwich and forex brokers such as Western Union, Moneycorp, World First, HiFX, Monex, OptFX, Currencies Direct and AFEX.

Derivatives experts and campaign groups for such SME victims include The Federation of Small Businesses (FSB), Bully-Banks, SME Alliance; general case studies can be readily seen at InsolvencyAssist (a community interest company).


The Limitation Act 1980 sets out strict statutory deadlines within which you must bring litigation claims. Your legal rights will become irreversibly time-barred if you fail to take legal action (or defend a claim on time). Therefore, you should seek specific legal advice about your legal dispute at the very first opportunity so that you understand the time you have left. Failure to take advice or delay in taking action can be fatal to your prospects of success.

Failings in the FCA IRHP Review scheme

An example of the power of and the need for the protective claim form can be demonstrated by a real life example. By way of background, the Financial Conduct Authority (previously the Financial Services Authority) found and reported in June 2012 that over 93% of cases of Interest Rate Hedging Product sales it had examined were non-compliant with the regulations that covered their sales process (the conduct of business rules). This resulted in many billions of pounds of cumulative losses to SMEs and, in the light of the regulator’s findings, the announcement of a compensatory review scheme. That scheme has been widely condemned as having failed SMEs by a process of allowing the wrongdoer financial services institutions to determine and assess their own wrongdoing and deny redress or limit it by proposing commercially unrealistic alternative products as redress.

“The Committee remains very concerned that terms of the FCA’s redress scheme may, in some cases, have provided banks with an opportunity not to provide meaningful redress. Many firms feel that this process has unfairly favoured the banks.” – Rt. Hon. Andrew Tyrie MP, Chair of the Treasury Committee

In addition, following a pilot review scheme, many businesses were ejected from the so-called FCA review (however, it is the wrongdoer bank rather than the FCA that conducts the review) when the banks persuaded the regulator to modify the scheme.

Case study in beating the FSA Review by Litigation

One such small business (not the only SME in this situation) was told of its ejection from the so-called FCA Review only after its legal rights had become time barred. One has to question why it took the bank several months to communicate the ejection decision; perhaps it was a sharp legal and financial strategem designed to save millions of pounds or perhaps the bank were behaving bona fide but just slowly.

Fortunately, that client had issued a protective court claim form against his bank at a cost he could afford of a reasonable £1,670. The court had to assign a number to the claim form handed to it for stamping and bank the issue fee and wait to see if the claim form was later served on the bank (which eventually it was) to commence proceedings. In that case, the claim form was served after the bank denied all wrongdoing which position they maintained for over 18 months. Eventually, as a result of the pressure of litigation disclosure and impending judicial scrutiny, the bank agreed to pay significant damages to our client, which amounted to a financial benefit of around four million pounds.

At the time our client needed to issue the claim form, his business was devastated by the bank and he was left with very little funds due to the massive costs of the toxic financial instruments mis-sold to him by his bank. Fortunately, the court issue fee at the time was a reasonable and proportionate £1,670; soon, however, it will be £10,000.

When these events unfold in the face of future victims of financial services institutions, who may not have £10,000 at their disposal to issue a protective claim form (due to the very conduct of their opponents), they may well be left without justice.

If you have a claim, you may wish to instruct your legal advisers to issue it tomorrow (as many of our clients are doing; even one small business that first spoke to us earlier today). You can also write to your MP and/or the Ministry of Justice following these templates.

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