Do you agree with the proposal to raise the maximum fee for starting proceedings for the recovery of money from £10,000?
No, the PLA strongly disagrees.
As has been made clear in previous consultation responses, the PLA does not necessarily in principle object to enhanced fees, provided that:
- the fees are “back loaded” not “front loaded”,
- the bands are set at the right level, and
- the extra revenue generated by enhanced fees is reinvested in order to improve the service provided to court users.
Turning to the first of these points, it would not be at all unusual for PLA members to bring claims of above £200,000. Those claims already attract a court fee of £10,000, and would attract an even higher fee if the currently proposals are brought into force. Claims of over £200,000 in the property sector are not necessarily the reserve of high net worth individuals or multi- national organisations. Dilapidations claims for commercial premises, for example, are often of this level or more. With property and rental values being what they are in many parts of the England and Wales, claims for unpaid rent or damage to property can also easily run into hundreds of thousands of pounds. For the claimant, cash flow and overdrafts may already be severely stretched as a result of the dispute. A Court fee of over £10,000 is likely to prove prohibitively expensive in many cases, particularly when multiplied across several floors of a multi-let property, or a portfolio of units.
Of these claims, a fraction will get as far as trial. Many will settle very quickly after they are issued. Front loading of fees hardly encourages parties to settle claims through alternative dispute resolution. A party may find it impossible to persuade the other side to negotiate without first issuing proceedings; it may also have to issue to avoid being time barred. Having paid a hefty up front fee, a party may be more inclined to go through with those proceedings to get their “money’s worth”.
In the PLA’s view, it would be far better to charge enhanced fees in stages as the parties progress through court proceedings: a “pay as you go” approach. In particular, there is something to be said for the proposition that attending long hearings or trials should attract enhanced fees as the parties are getting the benefit of court facilities, court staff and judicial time. The PLA would support such back loading of costs, as an alternative to increasing issue fees further, and would urge the government to reconsider its current intentions.
Click here to read more.