MSB Solicitors are warning of the risks posed by a massive rise in court fees for money claims, which came into force on Monday.

A 5% levy on all claims over £10,000, up to and including claims valued at £200,000, was approved at the delegated legislation committee stage in the House of Commons last week.

The increases range from a not insignificant 64% increase for a claim valued at £20,000 up to a staggering 622% increase for a claim valued at up to £190,000.

Hayley Catherall, solicitor in MSB’s family team, is all too aware of the affects that the rise in court fees could have for many of her clients. She says:

“I recently represented a lady who was the victim of domestic abuse. Like many women in these cases, she was in a very difficult situation, in danger of losing her home whilst caring for two young children.

“Having fallen just short of the criteria to qualify for legal aid, this lady was struggling to pay solicitors fees but was left with no choice after her ex-partner issued proceedings to try to obtain a share of the house she owned.

“Her only option was to pursue a counterclaim against him, which was immediately transferred to Salford County Court Money Claims Centre. On forwarding our defence and counterclaim, the client has had to pay a court fee of £1,150. She had to borrow the money to fund her counterclaim, or face the prospect of her and her young family losing the family home.

“The new court fee would be in excess of £6,000 and my client would simply have been left high and dry. What is frightening is that this is just one of hundreds of similar cases we see each year.”

Partner at MSB, Sean Sexton, has voiced his frustrations too, with a blog on the firm’s website urging the Ministry of Justice to review their decision. He said:

“The potential impact of these fee increases could be devastating for many of our clients.

“Cohabitees who split up and wish to claim a share in the family home will certainly be affected. Claims of this nature and in the worth of around £200,000 would require a court fee alone of £10,000. That is just to issue the court proceedings, without the cost of any legal representation. How will any ordinary person be able to afford this?

“The reality is that in future, such cohabitees will be unable to make a claim on the family home and may be left destitute. There is no legal aid available for such claims, irrespective of the claimant’s financial situation.

“And it isn’t just cohabitee claims that will be affected, the potential consequences for small and growing businesses are of particular concern. Many small businesses will be prevented from suing larger companies for goods or services supplied and the tactics of some large companies delaying payment to small suppliers will inevitably escalate”.

The Law Society has collected case studies from solicitors showing the likely impact the increased fees would have on ordinary people seeking justice. Those include an account from one concerned pensioner with a claim against a financial adviser for the loss of his entire pension fund, for which the fee for applying to begin court proceedings will increase from £910 to £5,000.

Another case study found that a young girl with brain damage due to a failure by doctors to diagnose meningitis as a toddler will now require £10,000 to mount any fight for a financial settlement.

The government seem determined to impose these fee rises before the coming general election, but MSB have announced their support for a judicial review to challenge the increase and in February called for backing from local MPs to oppose the plans.

Steve Rotheram MP for Walton lent his support, saying:

“It is a basic human right for an individual to be able to access legal representation. If an individual is not able to access appropriate representation because of cost, this is counter to the very principles of natural justice.

“I remain opposed to anyone being denied justice on the basis of cost. That is why I voted against the government’s slashing of legal aid and I will support Labour’s plans to help financially support all victims and defendants in our courts”.

MSB have also warned of the dangers of unrepresented claimants scrambling this week to submit money claims before the court fee increases come into force.

To read the full blog from Sean Sexton, visit http://www.msbsolicitors.co.uk/msb-talk/blog/item/5-are-the-ministry-of-justice-working-off-the-back-of-a-fag-packet.html