New data has revealed that last year’s rise in fees on commercial disputes worth more than £10,000 has led to many small businesses and sole traders being “priced out of the courts”.
The latest figures from the Registry Trust show that the number of County Court Judgments (CCJs) against companies in England and Wales in the first six months of 2016 fell by 19 per cent year-on-year.
The total value of the 42,091 CCJs conducted during this period also fell to £149 million – a drop of 12 per cent year-on-year. This represents the largest decline in both value and volume since the financial crisis in 2008.
Last year the Ministry of Justice announced that it would charge a fee of five per cent of the claims value on all disputes worth more than £10,000 when dealt with by the Courts.
This effectively equates to a rise of 660 per cent in fees for a claim of £200,000, which would attract a fee of £10,000, compared to just £1,315 before March 2015.
Bar Council chair Chantal-Aimée Doerries QC, said: “The courts risk becoming out of bounds for many as the full impact of increased court fees bites.
“Small businesses seeking debt owed to them by customers, who are often other businesses they supply, can turn to CCJs as a last resort to get the money owed to them, but by increasing court fees the government has cut off those small businesses’ only real and last hope of getting that money, which is vital given how important cash-flow is to SMEs. They are being priced out of court.
“In January 2015, when the plan to raise the fee for using the courts was first mooted, we warned that a court fee increase would hit small businesses. We take no pleasure in seeing that warning become a reality.”
If you are concerned about the impact these fee charges have had on work from County Court Judgements, please contact us.