Counting the cost of courts by Nigel Kidwell, Paragon LawSelect

This blog post was also featured as a column in the March 2016 issue of Legal Practice Management magazine.

Substantial increases in court issue fees have remained the subject of press and professional focus. Since March 2015 any claim to a value of between £10,000 and £200,000 attracts an issue fee of 5% of that value. Fees for claims of less than £10,000 can be 10% or more of the sum at stake. The highest fees percentages are for brackets within which most dispute lawyers' typical claims sit.

The Chancellor’s autumn statement proposals, if followed through, increase the cost to litigants again. Further fee hikes were mooted. In addition, around 90 courts are at risk of closure, potentially increasing travelling time and expense, as well as requiring greater use of agents at further cost.

Government statistics indicate that claims for over £10,000 are within the court system on average for 59 weeks, and claims under £10,000 for 31 weeks. The full impact of the fees changes last year is not, therefore, yet known.

There is a case – albeit in negative terms – for the changes having little overall effect. To be a litigant is not to have fun. It involves considerable risk and expense anyway, potential exposure to opponents’ costs (the level of which are largely out of your control) and, if you are sufficiently unfortunate to reach trial, an uncomfortable time in the witness-box with most of the court trying to find something wrong with you, or what you have to say. Yet statistically it remains astonishingly popular. County court claims issued annually total around 1.4 million, of which around 50,000 reach trial or equivalent hearings. A further financial burden may make little difference, particularly as it is potentially recoverable.

Courts are existentially necessary. They are the sword of Damocles hanging over the head of the truly recalcitrant debtor, and until the government, lawyers, or both, make the taking of proceedings simply commercially unviable, that purpose will remain.

Whether by accident or design, recent court reforms implemented and proposed have the effect of building an ever bigger bogeyman with which to cow your opponent. This trend cannot be desirable for litigants – it is to raise the stakes in an already high-risk venture.

The practitioner can address only that over which he or she has control, which places the spotlight once again on protection of the client from the vicissitudes of the court process. Contentious lawyers have grown used to the panoply of available palliative measures – without prejudice negotiation and offers, ADR, after-theevent-insurance, cost-benefit analyses, and so on. International transactional lawyers routinely provide for jurisdiction and choice of law in their drafting. Might we now see increased levels of similar attention in domestic contracts, motivated by the cost of enforcing rights – mandatory expert determination, arbitration, and so on ... anything that cuts the civil courts out of the process altogether? It would suit the Treasury no doubt, but some clients might benefit too.

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