Incorrect court fee: putting paid to limitation arguments?

The recent decision in Butters and another v Hayes considers whether, in the context of existing proceedings, the limitation period will continue to run if the claimant fails to pay the court fee.


Mr and Mrs Hayes had been married for 20 years and divorced in 1990. Following their divorce, the former couple embroiled themselves in almost constant litigation.

In November 2005, Mr Hayes (the claimant) brought a harassment claim against Mr Butters and Mrs Hayes (the defendants) alleging 49 acts of harassment dating back to February 2003. The claim took a long time to progress to trial because of numerous interim applications and other related proceedings.

At a case management conference on 15 June 2011, the district judge gave permission to the claimant to file an amended particulars of claim (APOC). In the APOC, the claimant alleged 120 further acts of harassment between 2005 and March 2011.

In 2012, after a further direction from the court, the claimant filed a schedule of loss claiming in excess of £1 million.

The claimant paid a court fee of £900 when he issued the claim in 2005 (although this was £100 more than was due).

The defendants argued that, due to the increase in the value of the claim following the submission of the APOC and the schedule of loss, the claimant should have paid a further fee of £770.

The claimant disputed this. He argued that, at that point, the case was proceeding on liability only, as he had been made bankrupt at the defendants’ behest, and any special damages awarded would have vested in his trustee.

The defendants applied to strike out the APOC arguing that, because the claimant had failed to pay the correct fee, time for limitation purposes had continued to run and the claim was now, therefore, statute barred.

Decision at first instance

The trial eventually took place, in two parts, between January and March 2019. Between the two parts, the defendants’ application for strike out was dealt with by the trial judge.

The judge rejected the strike out application because he considered that, at the time the particulars of claim were amended, the claimant did not intend to increase the value of the claim and so there was no need to increase the court fee. The defendants appealed.

First appeal

Falk J heard and dismissed the appeal.

She held that the amended claim had been properly brought because it had been allowed to proceed by the district judge’s order on 15 June 2011 and no further fee had been stipulated at that time.

Falk J turned to section 35 of the Limitation Act 1980 (the 1980 Act), which deals with new claims in pending actions:

  • Section 35(1)(b) provides that “for the purposes of this act, any new claim made in the course of any action shall be deemed to be a separate action and to have commenced in the case of any new claim, on the same date as the original action.”
  • Sections 35(2)(a) and (b) provide that “In this section a new claim means any claim by way of set-off or counterclaim, and any claim involving either the addition or substitution of a new cause of action or the addition or substitution of a new party.”

The APOC had added new causes of action (the further instances of alleged harassment) under section 35 (2)(a). The judge was satisfied that these amounted to new claims under section 35(1)(b), that were deemed to have commenced at the same time as the original action, and so the claims were within the limitation period.

The judge also rejected the argument that time did not stop running for limitation purposes until the correct fee had been paid, stating:

“At most it means that the Fees Order or the relevant order of the court was not fully complied with.  It does not mean that the action taken was a nullity.”

The defendants challenged Falk J’s decision on the grounds that her interpretation of section 35 was wrong.  They argued that:

  • The judge was wrong to determine that the claim was allowed on 15 June 2011 when permission for the APOC was given (or at the latest when the APOC was filed).
  • It was wrong to deem that the claims in the APOC were brought at the date of the original claim.
  • The judge failed to apply two other relevant cases, Barnes v St Helens MBC and Page v Hewetts Solicitors.

Court of Appeal


The Court of Appeal scrutinised section 35, as well as relevant CPR rules.

As detailed in the judgment, CPR 3.7, 3.7A1, 3.7A, and 3.7AA set out what the consequences are if a party does not pay the hearing fee. If a fee is not paid, the court sends out a warning notice. If the fee is still not paid, the claim or counterclaim will be struck out. Jackson LJ noted:

“There is no suggestion that failing to pay any fee invalidates underlying claim. Nor do the CPR contain any express sanction for a failure to pay a claim due on amendment”.

The judgment also considered CPR 17.4, which provides that, where a party applies to amend his case after the limitation period has expired, the court may allow the amendment to “add or substitute a new claim, but only if the new claim arises out of the same facts or substantially the same facts…”.

The Court of Appeal concluded that, as far as the relevant legislation is concerned, non-payment of a court fee will not prevent a new claim from being made for the purposes of section 35.

Jackson LJ succinctly commented that “if a new claim which is not otherwise abusive is made by amendment within the limitation period, it will not later become time-barred because a requisite court fee had not been paid.”

The Court of Appeal also concluded that a claim is made at the point at which the APOC is filed at court, and not when permission to amend the particulars of claim is given, noting that paragraphs 1.3 and 1.5 of PD 17 provide for amendments to be filed within 14 days of permission being granted.

After satisfying itself of the implications of the relevant legislation, the Court of Appeal considered relevant case law.

Case law

First, the court noted that a number of cases had found that a claim will be made for the purposes of the Act at the point the claim form is submitted to the court and not when the court issues the claim form: for instance, Barnes and Page. However, neither of these cases considered what the position would be if the incorrect fee had been submitted with the claim form. The cases did not suggest that the action will be brought in time “if and only if it is accompanied by the appropriate fee”. In his supporting comments, Lewison LJ issued the reminder that “it is a mistake to read a judgment as though it were a statutory text, especially on a point that was not in issue”.

The judge went on a whistle-stop tour of numerous further cases. He noted that, except for one, none of the cases were concerned with bringing a new claim by way of amending the particulars of claim in existing proceedings. This meant that none of the cases suggested that the failure to pay the relevant fee prevented a claim from being “made” for the purposes of section 35.

The judge noted three different approaches had been adopted where the correct fee had not been paid. In two of the authorities (Page (No.2) and Dixon and another v Radley House Partnership (A Firm) and others) it was held that the action had not been brought because the fee was incorrect. In Lewis and others v Ward Hadaway (A Firm), it was concluded that the action had not been brought because the non-payment of the correct fee was an abuse of process and in yet another, Atha & Co Solicitors v Liddle,  it was held that the action had been brought because the non-payment had not been abusive. The judge resisted the temptation to determine which was the best approach because it was not relevant to the present case.

Court of Appeal’s decision

The Court of Appeal found that the order giving permission to appeal in June 2011 did allow the new claim to be pursued. The judge could have stipulated that the order was subject to a fee being paid, but the judge did not. A court order will have effect unless and until it is set aside.  No application had been made by the defendants to set the June 2011 aside and so the order still stood.

The judge agreed with the defendants that a new claim is not made on the date the new claim is allowed, but it is made when the amended particulars of claim are filed. However, this did not assist the defendants in any event, as the claim was still made within the limitation period. Finally, the defendants’ argument that the authorities meant that time continued to run because the fee was incorrect, did not reflect what the authorities actually said.


Getting proceedings commenced well before the limitation deadline, to avoid any scope for a limitation defence, will be every claimant’s aim. Sometimes, issuing proceedings close to the key limitation date will be unavoidable, perhaps because instructions are received late from the client and further information and investigation are required. This is a high-risk strategy as mistakes are most likely to happen when individuals are under pressure.

Though the Court of Appeal did not find that the incorrect fee meant that limitation continued to run in this case, solicitors should not take too much comfort from the decision.  The different approaches in the case law, highlighted by Jackson LJ, mean that there is a significant risk that a failure to pay the correct fee could be fatal to a claim.

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