Extortionate court fees will price low and middle-income earners out of justice and cripple small businesses
Following a survey of solicitors, the Law Society has warned that the government's 600 per cent increases in some civil court fees from April will lead to small businessinsolvenciesand access to justice becoming a preserve of the elite.
Law Society president Andrew Caplen said:
"Court fee hikes introduced by the government from April spell disaster for access to justice, pricing the public out of the courts and leaving small businesses saddled with debts they are due but unable to afford to recover.
"State provision for people to redress wrongs through the courts is the hallmark of a civilised society.
"We are pressing the government to reverse its decision which will have a far-reaching impact on people who have valid claims and on solicitors doing everything they can to help their clients seek justice through the courts."
The court fees affect debts owed to small businesses as well as personal injury and clinical negligence claims. Solicitors told the Law Society that higher court fees would:
- Put people off going to court when they have genuine claims. Those out of work due to injury cause by negligence would not risk losing what little money they had left on court fees, even if they had a strong claim.
- Provide an incentive for large companies to deny liability, knowing that the injured parties would not be in a position to fund expensive court fees. Under the current fees, large companies and insurers often settle out of court when they are clearly liable.
- Lead to small business insolvency. Unpaid invoices of £10,000s or £100,000s mean cash flow and overdrafts are already stretched. For some companies, insolvency will be the only option.
Data from nearly 200 solicitors found that the total value of cases brought by individuals would likely fall by around one-third (35 per cent) under higher court fees. For small and medium-sized companies it would halve (a 49 per cent decrease). This suggests that increased court fees could have a significant impact on access to justice for both individuals and businesses, as fewer could afford to pay the higher rates.
Andrew Caplen continued:
"The UK prides itself on its entrepreneurs and start-ups, but the government's 600 per cent hike in court fees could cripple the small and medium-sized businesses that play a vital role in our economic recovery.
"Companies suffering cash flow problems as a result of unpaid invoices simply do not have money in the bank to stump up extortionate court fees."