The Ministry of Justice (MOJ) has unveiled plans to scrap court fee refunds for settled cases in the High Court and the County Court. The Statutory Instrument, The Civil Proceedings Fees (Amendment) Order 2016, was signed off on 15 December 2016 by justice Minister, Sir Oliver Heald.
When pursuing a claim in England and Wales, the Claimant is required to pay a hearing fee prior to the case being listed for a final hearing. Previously, if the case was settled or discontinued prior to this, the Claimant could apply to the Court for a refund (subject to the timescale of when the matter was settled and the listing date). However, this is all set to change with the implementation of the above Statutory Instrument.
The effect will be to remove the availability of a refund where cases have been settled or discontinued after the hearing fee has been paid. It will apply to cases allocated to the small track, fast track and multi-track and will come into effect from 6th March 2017.
In an explanatory note to the Statutory Instrument, the MOJ have said the aim is that 'the Courts and Tribunals are adequately resourced in such a way that justice is protected while the costs to the taxpayer are reduced.'
However, the Statutory Instrument could have huge repercussions for the Court system.
The availability of a refund has encouraged litigants to consider settling the claim out of Court. The Court system assists with this by actively encouraging the use of alternative dispute resolution such as negotiation or mediation which can assist litigants with settlement.
In the event that litigants did manage to settle prior to the final hearing, they may have been eligible for a hearing fee refund. As this option will no longer be available, litigants may be dissuaded from settling or discontinuing, instead favouring having their day in Court as in a sense nothing will be lost. This is of particular significance in the small claims track where generally the losing party is not at risk of paying the 'winning' party's costs.
The measure has come under heavy critique by lawyers as many believe that the MOJ could be removing a key incentive for litigants which saves the Courts time and money.
Should litigants still wish to settle prior to the hearing they may also now be inclined to include the hearing fee in any settlement as well, as they previously may have been able to recover this via a refund.
In addition to the above changes, the Statutory Instrument also adjusts the timescales in which fees are payable.
Where notice of a trial date or trial period is given by the Court 36 days or more before the trial date, or the Monday of the first week of the notified trial period, the court fee is payable at least 28 days prior to the trial date or the Monday of the first week of the notified trial period.
It will be interesting to see how the above changes are implemented and what effects this has on litigants settling or discontinuing prior to a final hearing.
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