This piece does not deal with court fees themselves, but rather the principles and practices of court fee remissions and recoverability and so on, and the process of seeking remission.
Court fee remission and recoverability
A claimant who could have applied for remission of the court fee does not do so and wins the case. Is the losing defendant liable for that court fee, or can it successfully argue that it was unreasonably or unnecessarily incurred?
No or yes, depending upon which court you are in.
In Stoney v Allianz Insurance Plc (Liverpool County Court) (7 November 2019), the court said no, holding that the fee was unreasonably incurred as the claimant may have been entitled to fee remission, that is he would not have had to pay the fee. The judge accepted that this meant that a necessarily incurred court fee, caused by the negligence of the insured, would be borne by the state and not the insurance company, but said that that was a matter for Parliament or the Civil Procedure Rule Committee.
In Cook v Malcolm Nicholls Limited (Coventry County Court) (11 April 2019), the court said yes:
“I take the view that the court fee is the court fee. That has got to be paid.”
It would be a very simple matter indeed for the Civil Procedure Rules to say either: “A successful claimant shall recover any court fee paid, whether or not that party could have sought remission of that fee” or, “A defendant shall not be liable for a court fee incurred by a party who could have successfully claimed remission of that fee.”
Don’t hold your breath.
In practice, solicitors should always check to see if their client qualifies for court fee remission. This avoids the problem, and also assists with cash flow if it is the practice of the firm to pay the fee. It is also a useful lever for solicitors to get the fee out of the client up front; if the client does not qualify for remission, then that is a powerful argument that the client could, and should, pay upfront.
It follows, as night follows day, that a solicitor who fails to advise a client about fee remission and then fails to recover the fee from the other side in the event of a win, will have to fund the fee themselves, rather than the client taking the hit for the solicitor’s negligence. It is also inadequate professional service.
Double charging: a court rip-off
An application is made to the court and a fee of £255 is paid. The matter is resolved by way of a consent order/Tomlin order, which is filed with the court, which then charges £100, thus effectively charging twice.
Court fees and general civil restraint orders
In Chief Constable of Avon and Somerset v Gray, the Court of Appeal allowed an appeal and set aside the High Court’s refusal to extend a general civil restraint order. It held that the High Court was wrong to conclude that the court fee payable under Practice Direction 3C.4.2 (General civil restraint order application fee) represented an absolute or effective bar to litigating which justified not extending the general civil restraint order. This was despite his finding that the respondent was very likely to bring civil claims, including unmeritorious ones, if the general civil restraint order was lifted.
The Court of Appeal retrospectively extended the general civil restraint order from the date of the High Court application. It considered that although the current fee of £55 may have been a significant sum for someone in receipt of benefits, it was not open to the court to hold that the fee represented a bar to litigation without evidence showing that the individual would be unable to access that amount of money by borrowing, support from friends or family, or obtaining legal aid or legal representation subject to a damages based agreement or conditional fee agreement.
The Court of Appeal also noted that for a meritorious claim, the general civil restraint order application fee is returnable, and therefore described this as a “cash-flow” problem. It considered that the fact that the fee would not be returned in an unmeritorious claim represented a legitimate deterrent to making such claims.
It should be noted that there is no fee remission scheme in relation to vexatious litigants, but rather a vexatious litigant in these circumstances has to pay the full fee but it is then refunded if the application is successful. That is the effect of paragraph 19 of schedule 2 of The Civil Proceedings Fees Order 2008. The court said this at paragraphs 32 and 33:
“In my view, the relevant language of these regulations is clear. There is a distinction between ‘remission’ and the refunding of a fee. Subject to other provisions, an impecunious litigant can apply for remission of the fee under paragraph 15 of Schedule 2 and, upon making the application, the date for payment of the fee is disapplied. To the extent that the application for remission succeeds, that fee never becomes payable. However, where a restraint order is in force against such an individual, then the prescribed fee ‘is payable in full’, and it follows the individual cannot make the application for remission. It also follows that the date for payment cannot be ‘disapplied’ and therefore the payment must be made before the relevant issue or step in the action. Paragraph 19(3) simply means that, if the relevant individual has a reasonable claim and is granted permission then they will be put back into the position they would have been had remission of the fee been open to them.
In my view, the intention of these provisions is obvious: the requirement to pay the fee at the initiation of action must be taken to be part of the discipline imposed on vexatious litigants.”
Court fees, Part 8 applications and infant approval
Ministry of Justice guidance saying that the full fee applies to all Part 8 claims is wrong; it only applies to Stage 3 claims.
The court has itself suggested that:
“You may, in order to assist the court, specify that the Claim is for an infant settlement, in bold print.”
You may indeed.
I am grateful to Gordon Exall and his blog for this information.
Stage 3 issue fees
As above, I am grateful to Gordon Exall and his blog and to Jon Heath of Levins in Liverpool for information contained in this piece.
There has been disagreement in different courts as to the correct fee for issuing a Stage 3 claim, that is the last part of the portal process, which everyone accepts involves issuing proceedings.
One view is that Stage 3 claims, apart from infant approval settlements, are proceedings to recover a sum of money; thus the fee paid should be the same as for a Part 7 claim of the same value. Some courts have adopted that view whereas others have treated the claim as “proceedings for any other remedy” which involves a fee of £308.
In claims with a value of not more than £5,000, the Part 7 fee is £455. The “proceedings for any other remedy” fee is a flat fee of £308 whatever the value of the claim. The Ministry of Justice has now confirmed that the Part 7 approach is the correct one in its view.
Trial must be stopped if fee not paid
In Hyslop v 38/41 CHG Residents Company Limited, a High Court judge held, on appeal, that where a claimant had not paid the trial fee, striking out was automatic, even if the fact only came to light at the trial and the solicitor then paid the fee. The claimant should have applied for relief from sanctions and it was not for the defendant to take the point, or apply for an unless order.
At trial, the judge accepted an undertaking from the claimant’s solicitor to pay the fee the following day and allowed the trial to proceed. Here the High Court, on appeal, sent the matter back for retrial by a different judge, with the claimant required to make a formal application for relief from sanction.
How can this possibly comply with the overriding objective?
The trial judge said:
“I am tempted to say, it is almost absurd for the parties to get ready for a trial, turn up for a trial, two days of court hearing time being allocated to the trial and then the judge sending everybody away because a fee has not been paid which now will be paid.”
While I am at it, how about HMCTS joining the modern world and setting up an account system so that issue fees, application fees and trial fees and so on are automatically deducted from the solicitors’ account whenever a fee-bearing activity takes place where that firm is on the record?