Pre Pack Administration

A Huge Rise in the Fees for Issuing Money Claims

It has been announced that the House of Lords have just approved the governments revisions to the costs of issuing money claims resulting in huge rises in the cost of civil court fees since the 9th of March 2014.

This means that if creditors wish to recover unpaid monies of £10,000 or more, through the civil courts, then the fee will now be a whopping 5% of the value of the claim up to a maximum fee of £10,000.

It should however be noted that for claims issued in the County Court Business Centre, the fee will be 4.5% of the value of the claim if above £10,000 and a 10% discount is still available to those who issue their money claims on-line.

Fees for claims in the Small Claims Court which total £9,999 or less are unaffected by the changes.


The Law Society’s View

Critics have estimated the fee changes to be an average rise of approximately 600%.

It is reported that many objections were raised to the changes with the most vocal being that of the Law Society who have considered the changes to be tantamount to “selling justice”.  They consider many creditors will be saddled with unpaid debts but not be able to afford the fee to recover them.

Opposing Views from Justice Minister Shailesh Vara

However, Justice Minister Shailesh Vara has commented that access to justice is fundamental to our legal system and this is not threatened as 90% of claims will be unaffected by these changes and waivers will also be available for those who cannot pay.

It is still to be seen who the changes will affect the general public however, to ensure that you are not stung by the extra costs, you should always take care to ensure that your customers are not allowed to rack up huge debts without the necessary credit checks and controls in place to best recover the sums due.

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