In another blow to litigators, on top of the increased issue and hearing fees, the government has announced that the refund of Court fees for early settlement is to be removed from March 2017.
Maybe too many cases were settling and the Court Service was suffering a drop in income?
In any event, in our view this removes an incentive to settle after issuing proceedings and so you really need to settle early on in the proceedings before you are committed to pay the hearing fee, which is usually payable well in advance. Ideally you should engage in ADR and settle before issuing or you will end up paying the hearing fee.
Up until March 2017 if you settle a Court case before the hearing/trial you can get a refund – the earlier you settle the higher percentage you can get back.
Small Claim Track
Claim amount and Fee
Up to £300 – £25
£300.01 to £500 – £55
£500.01 to £1,000 – £80
£1,000.01 to £1,500 – £115
£1,500.01 to £3,000 – £170
Over £3,000 – £335
Fast track claim
The fee is £545.
Multi track claim
The fee is £1,090.
The current position re Refunding hearing fees
Small claim hearing
You could get a full refund of the hearing fee if you notify the court in writing, at least 7 clear calendar days (excluding the date of receipt and date of hearing) before the trial date or start of the trial week, that the case is settled or discontinued.
Fast track, multi track or non-money claim hearing
You could get a refund of some or all of the hearing fee if you notify the court in writing that the case is settled or discontinued. How much you get depends on when you notify the court.
When you notify the court
Fewer than 7 days before the hearing 0%
7 to 14 days before the hearing 50%
15 to 28 days before the hearing 75%
More than 28 days before the hearing 100%
This is currently an added incentive to settle your claim as soon as possible before trial.
The Ministry of Justice has unveiled plans to stop refunds of court fees for cases in the High Court and county court from next year. In a statutory instrument signed off in December 2016 by the justice minister, the MoJ removed the availability of refunds for cases where they have been settled or discontinued.
The Civil Proceedings Fees (Amendment) Order 2016 comes into effect from 6 March and applies to the fee payable prior to a trial for cases allocated to the small track, fast track and multi-track. Commentators said the ending of the repayment of court fees amounted to a ‘hidden tax’ for litigants.
The government is removing a key incentive to settle. It is particularly inappropriate in the small claims track, where generally a losing party is not at risk of paying costs and where there are a high number of litigants in person and where anyone can represent a party and be paid for it. Parties may feel that once they have issued their claim they may as well have their day in court – nothing is lost. This is on the other hand perhaps testimony to increased settlement rates as there may be fewer hearing fees being earned by the Court.
This move could be seen as being wholly at odds with encouraging people to settle, but in fact it perhaps encourages much earlier and pre-proceedings settlement.
The statutory instrument also amends the timescales in which fees are payable.
Where notice of trial date or trial period is given by the court 36 days or more before the trial date or the Monday of the first week of the notified trial period, the court fee is payable at least 28 days prior to the trial date or the Monday of the first week of the notified trial period.
In our view, to the extent that litigants take this into account, it may lead to more claims being settled at an earlier stage and less incentive to risk going to Court if it can be avoided.