See you later, Arbitrator… or maybe sooner

Commentary on Court Fees may seem out of place in a property blog, but the really swinging increases that took effect last Monday (9 March) will affect lots of property disputes. In particular the issue fees for “money claims” may in some cases go up as much as six-fold.

Suppose you are a landlord suing for unpaid rent of £150,000. Just to issue proceedings against your tenant will now cost £7,500 before you even think about your own lawyer’s fees. If you are a buyer whose seller won’t complete, it will cost you £5,000 just to issue proceedings to recover your £100,000 deposit. The maximum court fee for a money claim is now £10,000. So a litigant suing for a £2m debt pays 0.5% in court fees; while one suing for only £200,000 pays, relatively speaking, ten times as much.

These fees are a real disincentive to litigation and penalise small and medium sized enterprises. It’s not hard to imagine that alternative dispute resolution processes, such as arbitration and mediation will become more popular.