Civil court fees ‘pricing small businesses out of justice’

William Fox Bregman, a partner with Ellis Jones Solicitors, says increasingly banks and other big businesses are being let off the hook.

He has cited the case of five clients who have decided not to claim for the misselling of financial products and warned that proposed reforms are "punitive and unworkable."

Large increases in the upfront costs of taking a civil case to court were introduced by the government in March this year.

A consultation on increasing these fees even further - in some cases by as much as 100 per cent - ended this month.

Mr Fox Bregman, who heads Ellis Jones' specialist banking and finance department, said individuals and small and medium sized enterprises (SMEs) were most likely to be affected.

"SMEs are the backbone of our economy and should be supported. In my view these proposed reforms are disproportionate, punitive and unreasonably restrictive," he said.

"Access to justice is the cornerstone of our judicial system. However, larger companies and institutions may hide behind the reform in the knowledge that proceedings are unlikely to be issued due to the high level of court fee required.

"Clients are likely to panic and not pursue a claim if their first substantive step in the process is a £20,000 court fee."

Earlier this year, Ellis Jones revealed it had handled over 125 cases involving the misselling of interest rate hedging products (IHRP) and successfully reclaimed more than £20 million for clients.

But Mr Fox Bregman said: "I've had five clients already that have knowingly not issued a claim because of the size of the court fee, which means the banks have won by default.

"Large institutions, like banks, have deeper pockets. It's totally wrong that because of that they win by default."

The Law Society has also criticised the plan to increase civil court fees.

Law Society President Jonathan Smithers said: "Small and medium sized businesses are likely to be disproportionately affected by the government's proposals.

"Doubling some fees to £20,000 would price small businesses out of exercising their legal rights, forcing some into insolvency as they have no way of recovering debts they are rightly owed."

A Ministry of Justice spokesperson said: “We recognise that fees are never popular but the increases, along with the proposals in the consultation, aim to ensure that we have a functioning and properly funded courts.

“It is right that those who can afford to – such as wealthy individuals or large corporations making very high money claims – should make a bigger contribution.

“The most vulnerable do not have to pay higher fees and we have consulted on extending this support.”