Kerry Underwood

COURT FEE REMISSION

with 8 comments


This piece, in slightly different form, first appeared on the Practical Law Dispute Resolution Blog.

The matters dealt with in this piece are examined in great detail in my three volume, 1,300 page book Personal Injury Small Claims, Portals and Fixed Costs – price £50 and available from Underwoods Solicitors here.

Kerry Underwood offers consultancy services in relation to this and other matters and details are here.

 

This piece does not deal with Court fees themselves, but rather the principles and practices of court fee remissions and recoverability etc. 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 and/or unnecessarily incurred?

No or Yes, depending upon which court you are in.

In

Stoney v Allianz Insurance Plc Case No: E14LV817, 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 Rules Committee.

In

Cook v Malcolm Nicholls Limited Case No: B57YP191, 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.”

 

The latest addition to case law, again at County Court level, is

 

Ivanoy v Lubble (Central London County Court 17th January 2020)

 

where the court said:

 

“…. I am satisfied that it is not unreasonable for the Claimant to pass on the hearing fee to the Defendant”.

 

Comment

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

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 upfront; 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 [2019] EWCA Civ 1675 (11 October 2019)

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 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.

The Court of Appeal considered that although the current fee of £55 may be 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 and the court said this:

 

“32. 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.

33. 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

The fee on a Part 8 application for infant approval is £308 and not the fee payable on the issue of a Part 7 claim, or a Stage 3 portal claim.

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 outstanding blog – Civil Litigation Brief – for the information in this piece. Here is the link to the longer post on this subject. The Correct Fee on a Part 8 Application: Don’t Let The Court Staff Make You Hand Over Money For Nothing

 

STAGE 3 ISSUE FEES

I am grateful to Gordon Exall and his blog Civil Litigation Brief 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 and 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 then 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 [2018] EWHC 3893 (QB)

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.

 

Comment

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 etc. are automatically deducted from the solicitors’ account whenever a fee-bearing activity takes place where that firm is on the record?

 

COURT FEE REMISSION PROCESS

An application for help with fees, that is to avoid paying a court or tribunal fee altogether, or getting a reduction on the normal fee, is made on Form EX160 – Apply for Help with Fees. The process for applying online is:-

  • court users enter their details and check them before submitting the application;
  • court users receive an application reference number that needs to be written on their Court/Tribunal claim or application form;
  • if the application reference number is not written on the Court/Tribunal claim or application form, staff will not be able to process the application for help with fees;
  • the applicant receives a confirmation email from the Court/Tribunal containing the application reference number;
  • the Court/Tribunal contacts the applicant to let them know whether the application was successful or not, and if not if there is any additional information required;
  • there is no need to provide any paper evidence unless the court or tribunal specifically asks for it.

In June 2016 HM Courts and Tribunals Service updated its guide on how to apply for help with fees and that 20 page publication is on Form EX160A.

 

ELIGIBILITY

To be eligible for a fee remission the Court user must pass two tests, the disposable capital test and the gross monthly income test, and fill out Form EX160. Only the person who has to pay the court or tribunal fee can make a fee remission application. However, there are two exceptions to this rule:

 

  • applications to the Court of Protection on behalf of ‘P’ (a ‘person’ who lacks the capacity to make decisions); or
  • any person acting for or representing a child involved in legal action.

 

The guidance says:

Minors: If you are acting for or representing a child involved in court or tribunal proceedings, in your capacity as a Litigation Friend, parent or guardian, you can apply for a full or part remission using your own details.”

The fee remission scheme is based on two tests:-

 

  • Disposable capital test;
  • Gross monthly income test;

 

The Court user will have to pass both tests in order to be eligible for a fee remission.

 

DISPOSABLE CAPITAL TEST

In order to pass the Disposable capital test, this is the first test that must be passed, you must have a disposable capital of below the following thresholds and if you do then you will pass the disposable capital test and can continue to the gross monthly income test.

 

Court or tribunal fee Disposable capital threshold
Your court or tribunal fee is: You, and your partner’s disposable capital is less than:
Up to £1,000 £3,000
£1,001–£1,335 £4,000
£1,336–£1,665 £5,000
£1,666–£2,000 £6,000
£2,001–£2,330 £7,000
£2,331–£4,000 £8,000
£4,001–£5,000 £10,000
£5,001–£6,000 £12,000
£6,001–£7,000 £14,000
£7001 or more £16,000

 

For people 61 years or older there is a single disposable capital limit of £16,000, regardless of the amount of the court fee.

 

If you have disposable capital equal to or more than the relevant threshold you will not be eligible for a fee remission and will be required to pay the fee in full.

 

The Ministry of Justice states that disposable capital is:-

 

the value of savings, investments and so on which you and your partner (if you have one) have on the date the application is made. It does not include wages or benefits. However, if you are bringing proceedings with a contrary interest, do not include the value of your partner’s disposable capital, or any capital held jointly by you or your partner (for example, a joint savings account).”

 

Examples of disposable capital are as follows:-

  • capital held in any type of saving account(s); for example:
    • all ISAs;
    • fixed rate bonds
    • market linked investment bonds or savings; or
    • any other form of savings account.
  • any type of redundancy capital payment received;
  • stocks or shares;
  • any jointly held capital (where one or more parties have a financial interest in a disposable capital source);
  • second homes;
  • trust funds (where accessible), or any other fund available to you;
  • any type of disposable capital held outside the UK;
  • any type of capital financial product (for example, unit trusts, an OEICs/Open-Ended Investment Company, or derivatives

 

The following should not be included when calculating disposable capital:-

 

  • Bereavement Payment;
  • Self employed businesses – the capital value of your or (if you have one) your partner’s business;
  • Criminal Injuries Compensation Scheme;
  • First homes (the main property where you live);
  • Home contents (for example, furniture or clothing);
  • Independent Living Fund;
  • Insurance contracts – the cash value of (for example, life insurance);
  • Jobseeker’s Back to Work Bonus;
  • Lump sum payments made on illness, disability or death from insurance or endowment policies (all other insurance or endowment payments are considered);
  • Medical negligence or personal injury awards;
  • Personal or occupational pension schemes (the cash value of);
  • Student loans or student grants;
  • Sure Start Maternity Grants;
  • Tools and implements of trade (including vehicles used for business purposes);
  • Trust funds, and any other fund available, which you or (if you have one) your partner, cannot access or receive advances from;
  • Unfair dismissal awards;
  • Vehicles (for example, cars or vans) – the sale of which would leave you or your partner without transport

 

If you pass the disposable capital test then you can continue to the gross monthly income test which will also need to be passed in order to be eligible for a full or part remission.

However, if you do not pass this test, that is the disposable capital test, then you are not eligible for any fee remission and you do not need to consider the Gross monthly capital test.

 

GROSS MONTHLY INCOME TEST

There are two types of fee remission and you have to pass both tests in order to be eligible for a fee remission:-

  • Remission 1 – you will receive a full remission of a court or tribunal fee if you receive one of the following benefits:-
  • Income-based Jobseekser’s Allowance;
  • Income-related Employment and Support Allowance;
  • Income Support;
  • Universal Credit – with gross annual earnings of less than £6,000.00;
  • State Pension – Guarantee Credit;
  • Scottish Civil Legal Aid; or
  • Remission 2 – you will receive a full remission if your gross monthly income is below the following thresholds:-

 

Gross monthly income cap thresholds – full remissions:
Gross monthly income with: Single Couple
No children £1,085 £1,245
One child £1,330 £1,490
Two children £1,575 £1,735
£245 for each additional child

 

If your gross monthly income exceeds the above figures you may still receive a partial fee remission. For every £10 of income you have over the threshold set out in the above table, you will be required to pay £5 towards your court or tribunal fee. The court or tribunal will calculate whether you are required to pay a contribution towards the fee – known as a partial remission.

If your gross monthly income is over the below figures, or your expected contribution is higher than the fee required, you will not be eligible for a fee remission:

Gross monthly income cap thresholds – partial remissions:
Gross monthly income with: Single Couple
No children £5,085 £5,245
One child £5,330 £5,490
Two children £5,575 £5,735
£245 for each additional child

 

REFUNDS

A fee remission can be applied for before the case is issued or a refund can be applied for following payment of the court fee.

However, the time limit in which a refund of a court fee can be applied for is stated as within six months of paying the fee in Schedule 2 of The Civil Proceedings Fees Order 2008 and within three months of paying the fee on page 19 of the HM Courts & Tribunals Service’s own guidance on EX160.

Written by kerryunderwood

December 9, 2019 at 9:30 am

Posted in Uncategorized

8 Responses

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  1. “… how about HMCTS joining the modern world and setting up an account system so that issue fees, application fees and trial fees etc. are automatically deducted from the solicitors’ account whenever a fee-bearing activity takes place where that firm is on the record?”

    This already exists – https://www.gov.uk/government/publications/form-fee-account-application-form-fee-account-customer-application-form

    Pro Bono

    December 9, 2019 at 8:15 pm

    • I thought it simply allowed payment out of an account – are you sure it allows all cases to be registered so the system automatically takes a payment so that there is no chance of ever missing a payment? If so, please tell me how to make my account work like that!

      Kerry

      kerryunderwood

      December 20, 2019 at 6:05 pm

  2. How does the £255 N244 form fee compare with other European countries?

    Anonymous

    December 9, 2019 at 8:35 pm

    • Haven’t a clue. Why don’t you look it up and report back.

      kerryunderwood

      December 10, 2019 at 1:05 pm

      • Ok, will have a look, just wasn’t sure if anyone else knew. There isn’t anything immediately apparent that I was able to find, also might be difficult to find a direct comparator, but suspect it’s on the pricey side.

        Anonymous

        December 10, 2019 at 5:18 pm

      • Generally court fees in England and Wales are extremely high – and of course were very much cheaper here not long ago.

        kerryunderwood

        December 10, 2019 at 5:26 pm

      • Definitely, N244 was increased from £155 to £255 in 2016, was £80 in 2012 and £75 not long before that. So far I’ve found Canada (Alberta) rate of equivalent £25-30). Not sure why it’s so much in this country but it’s a considerable barrier to justice.

        Anonymous

        December 15, 2019 at 8:00 pm

      • My view is that the whole point was to restrict access to justice. This is linked to the abolition of legal aid and restricting funds for advice centres etc.
        Kerry

        kerryunderwood

        December 16, 2019 at 8:43 am


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