CIVIL COURT FEES REFORM – WILL LEGAL EXPENSES INSURANCE BE AFFECTED?

On the 9th March 2015, the government implemented a new reform to increase civil court fees. This affects both ‘specified claims’ (claims with monetary compensation) and ‘unspecified claims’ (claims for compensation other than money) and mainly impacts larger claims.

The principal reason behind the change is monetary, with the aim of generating an additional £120 million a year to fund the court service.

The fee to bring a small civil claim to court remains the same – ranging from £35 for claims up to £300 (£25 via Money Claims Online) to £455 for claims up to £15,000 (£410 via Money Claims Online).

Where the value of the claim is over £10,000, the court fee will now be 5% of its stated value. This is subject to a maximum fee of £10,000 for claims with a value up to and over £200,000. Some examples of the fee increases are outlined below:

Other fee increases have been discussed, but are yet to come into force. These include:

• An increase of £75.00 to issue a possession claim in the County Court. This would make the paper issue fee £355, and the Possession Claims Online fee £325.
• Doubling the fee for making an application by consent or where it is without notice, from £50 to £100.
• A fee increase of £100 to make an application which is on-notice and not agreed, raising the cost to £255.

One thing these increases highlight is the benefit of legal expenses insurance (LEI), where all fees would be covered in full. A claimant without LEI would be directly vulnerable to these increased costs.

We expect to see higher claim costs directly driven by the increased court fees, and higher claim volumes as customers turn to the benefits of their LEI cover. We also expect to see increased sales volumes as the fee changes focus attention on the value of LEI.

For further information on the court fees reform, please contact your Account Manager, or alternatively email [email protected]