On 21st March 2016 some County Court fees were increased significantly. There was a consultation by the Ministry of Justice in January 2015 on fee increases and the responses were almost all negative. The government, however, decided to go ahead with the proposed increases, with the exception of scaling back the proposed divorce fee changes. This article looks at the two areas that will most affect people with debts: general applications in civil proceedings and issuing possession claims.
The fees for general applications in civil proceedings have increased:
- from £50 to £100 for applications by consent or without notice; and
- from £155 to £255 for contested applications.
These may sound obscure, but they are very common. They are frequently made by the debtor where a creditor is trying to get, or has already obtained, a CCJ for a debt.
A couple of example of where a set-aside application is needed:
- Mr A is refused credit and on checking his credit record finds he has a CCJ issued at an old address – he had never told the creditor he had moved because the debt had been settled in full. He will now have to pay £255 to have the CCJ set aside.
- Mrs B told the creditor the debt was statute barred and thought the claim would be withdraw so she didn’t enter a defence – a judgment was awarded in default. She will have to pay £255 to have the CCJ set aside.
An overwhelming 96% of the responses to the Ministry of Justice consultation opposed these fee increases.
Many people having to pay these higher costs will not be eligible for fee remission, where the income limit is set at a very low level. Frequently they will be in some form of debt management and have no savings or spare income.
Many debt advisors will already have had clients who have been paying a monthly amount to a CCJ where they had a good defence because they were unable to afford a set aside application. There are going to be more such cases with the new higher fees.
The fees for issuing a possession claim in the county court has increased from £280 to £355. Again a large majority, 92%, of the people replying to the consultation opposed these changes.
The landlord or mortgage lender pays these fees – but they are then passed on as costs to people with rent or mortgage arrears. These people are almost by definition in dire financial straits and the additional costs will make it harder for them to pay back what they owe.
Many of these people might have qualified for fee remission, as their priority debt problems will often have resulted from losing their job, illness or separation. But fee remission is decided on the applicant’s circumstances so it almost never applies to possession claims.
Many Local Authorities make this situation worse by refusing to rehouse families who have been given a valid notice to quit, insisting they will only look at an application for homeless assistance if the family has been actually evicted through the court.
The justice gap
The Law Society president Jonathan Smithers said of these changes:
“punitive increases … which are tantamount to selling justice like a commodity, leaving it out of reach for many ordinary people. This will only serve to widen the access to justice gap in our two-tier justice system.”