6 tips for avoiding unnecessary court fees

courts A Government proposal to increase court fees in order to raise nearly £200m has not been greatly received. The courts role is to provide access to justice for those who need it and therefore the Lord Chancellor is required to consider this when setting fees in the civil court system. The proposal intends to increase the cost of court fees in an effort to reduce the civil and family courts' £150m annual deficit and to introduce 'enhanced court fees' in some cases, which would be over and above the cost of the proceedings. In December, Minister for Justice, Shailesh Vara, said: ‘our courts, judiciary and legal system are admired around the world… this means that the courts must be properly financed so that they have the resources they need to deliver their services, as well as the funds they need to invest in improving them.’ The proposal is unclear in its cost objectives with a great and unexplained variation in the rates of increase, such as claims exceeding £5000 but not £15,000 would see a 81% increase and Judicial Review permission to appeal applications would see a 216% increase. There is also question over whether the research conducted by the Ministry of Justice has been adequate as the investigation consisted of 18 phone calls focusing primarily on debt recovery litigation and therefore in essence not representative of all court users. The Senior Judiciary responded querying whether it is right that ‘parties in civil proceedings should pay more than the costs of the civil courts in order to fund the deficit in the family court system’. They also suggest that a proper analysis is required before consideration is given to raise this amount through increased fees. In the current climate many companies will have difficulties collecting money for their work and so will need to use the Courts to try to recoup that money.

From a practical point of view, if you have pending claims it may be an idea to look at issuing these prior to the end of March 2014. Beyond that, it becomes very important to minimise the potential for going to court and in case you have to, to ensure that you have as strong a claim as possible.

Whilst having to resort to Court is inevitable in some cases, minimising the risk at the outset and through the debt recovery process will help massively. Here are seven suggestion to help you along:

  1. Make sure you record any agreements in writing. Sounds obvious however, we come across many matters where there is no written evidence of what has been agreed and this creates real problems when looking at recovery. Standard form contracts are the most cost effective way to avoid any issues, making sure you get a signature from parties if possible!
  2. Ensure your terms and conditions are incorporated into any agreement. Many companies will attempt to have their terms and conditions apply. Again, having a standard form contract with standard terms and conditions will help. Ensure you cover items such as being able to add any costs incurred in dealing with the recovery of debts to the balance and dealing with the interest that can be charged and when.
  3. If you are proposing to work with a company, work out the legal identity. Is it a limited company? Is it an individual trading as an unincorporated company? Is it a foreign based company? Do you need personal guarantees? If an individual ensure the contract reflects this.
  4. Always prepare for the worst case scenario. Whilst most commercial deals will complete without any fuss, when things go wrong it is generally very time consuming and costly. Therefore, ensure you have a robust debt recovery process in place for when the invoice becomes outstanding.
  5. Gather as much information as possible about who you are contracting with – including contact details, location, assets etc. There are ways of doing this without having to ask for it as part of the application process! This will be vital should you have to pursue a debt.
  6. Make sure you follow any debt recovery process. At the present time, he who shouts loudest will generally get paid. That’s not to say you should stamp your feet and bang your fists at any given opportunity, however you must be on the ball. For example, the slightest delay in pursuing a debt may be detrimental, the debtor may lose assets you could have seized or paid another creditor.

For more information contact our litigation team at litigation@needlepartners.com


[avatar user="Paul Hayhurst" link="/team/paul-hayhurst" /]