Following the substantial increases in court fees in March 2015 there has been an increased focus on whether Claimants have paid the correct court fee when issuing a claim.

This is particularly relevant when the limitation period for a claim is soon to expire.

A County Court case heard late last year struck out a claim and granted summary judgment to the Defendant because the incorrect court fee was paid with the claim form.

The Facts – Stiff v Aurelia Ltd

A personal injury claim was issued in February 2016 for a value of £50,000 however in pre-action correspondence it was indicated, by the Claimant’s solicitors, that damages of £65,000 would be claimed for. The claim form was not amended nor the correct fee paid so the Defendant applied for the claim to be struck out and summary judgment granted. The court fee payable on a claim worth £50,000 is £2,500 (5% of the value of the claim) whereas for a claim worth £65,000 the court fee payable is £3,250; the difference in this case being £750.

The Judge found in favour of the Defendant based on the reasoning in Lewis v Ward Hadaway [2015] EWHC 3503 (Ch) and found there had been an abuse of process by the Claimant’s solicitors.

The Court’s Reasoning

The Judge based his reasoning upon the principles applied in Lewis v Ward Hadaway. Briefly, a Defendant applied under CPR Rule 3.4 (2) (b) for the Claimants claims to be struck out as they had sought to improperly pay the correct court fee. The Claimants amended the claim forms prior to service to claim much larger sums and paid the balance of the higher court fees. The Judge found in favour of the Defendant as the Claimants had deliberately underestimated the value of their claims payable upon issue of the claim and summary judgment was granted.

The decision in Stiff and Lewis can be compared with Glenluce Fishing Company Limited v Watermota Limited where the incorrect fee was paid when proceedings were commenced. Mr Roger ter Haar QC found that as there was no suggestion of an abuse of process, a new cause of action was not introduced and in the absence of any prejudice to the Defendant the amendment was allowed, showing the court taking a softer approach to an amendment of a claim form.

Comment

Ultimately in Stiff v Aurelia had the Claimant paid the correct court fee, which amounted to a further £750 being payable, the case would not have been struck out. Both Stiff v Aurelia Ltd and Lewis v Ward Hadaway demonstrate that deliberately evading paying the correct issue fee will be judged as an abuse of process and is not worth the risk. Both cases highlight the importance of getting the court fee on issue correct. As always, it is preferable that the commencement of claims should not be left until the last minute.

If a Claimant cannot afford a substantial court fee from the outset, alternative litigation funding will need to be considered as failure to pay the correct court fee can have serious consequences. Court issue fees, which can be as much as £10,000 for a claim greater than £200,000, can be funded in appropriate cases via Lupton Fawcett’s Passport litigation funding initiative.

For further information relating to this article, please contact Litigation Assistant, Natasha Wright.

Please note this information is provided by way of example and may not be complete and is certainly not intended to constitute legal advice. You should take bespoke advice for your circumstances.

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