A proposed 5% increase in court fees could deter small businesses pursuing claims for late payments, according to the Bar Council, which represents barristers in England and Wales.
The Ministry of Justice is planning to impose a 5% blanket fee on businesses and individuals bringing a claim for money – such as late payments, debt and compensation – of up to £200,000.
There would also be a minimum fee of £10,000 for larger claims.
The Council believes the latest proposed increases are deliberately designed to raise more money from claimants than the cost incurred by the courts in handling money claims.
Alistair MacDonald QC, Bar Council chairman, said: “Cash-flow is the life blood of small businesses and many end up having to pursue late payments and other debts through the court system. Imposing a 5% fee may well make many small businesses think twice before making that claim, and will certainly strengthen the hand of late payers.
“Many family-run businesses know that court proceedings are available to ensure that they are paid for their services and products. This move will effectively take that option away from many smaller businesses. This move will act as a deterrent for smaller companies to challenge their larger customers.
“The Ministry of Justice does not need these fees to meet the cost of money claims. The Ministry is merely seeking to cash in on claimants who have to go to court to recovery their debts.”
We shall keep clients informed of developments.
Please contact us if you would like advice on recovering debts or late payments. A letter from a solicitor is often enough to secure payment without the need to take further action or go to court.