Hearing fees payable further in advance and no longer refundable

The Civil Proceedings Fees (Amendment) Order 2016 (S.I. 2016 /1191) comes into force on 6 March 2017.  The Order amends further the Civil Proceedings Fees Order 2008 (S.I. 2008/1053).  The effect is twofold:

  1. to remove the right to a refund of hearing fees when a dispute is settled before a final hearing; and
  2. to make hearing fees payable further in advance of a hearing.

The position prior to 6 March 2017

If a dispute was settled prior to a hearing, the paying party was entitled to a refund of some or all of the hearing fee.

The proportion of the hearing fee refundable depended on 2 factors:

  1. the track to which the claim was allocated for hearing; and
  2. the period of advance notification given to the court that the hearing would no longer be needed and the dispute had been resolved.

The relevant guidance on hearing fees can be found here: EX50 Civil and Family Court Fees from 25 July 2016

The hearing fees for the different tracks

The relevant fee for a hearing depends on the track to which the claim is allocated, and, in the case of claims allocated to the small claims track, the value of the claim.  The present structure of hearing fees is as follows:

Hearing fees
Small Claim Track where the amount claimed is:
up to £300 £25
between £300.01 and £500 £55
between £500.01 and £1,000 £80
between £1,000.01 and £1,500 £115
between £1,500.01 and £3,000 £170
more than £3,000 £335
Fast track claim £545
Multi track claim £1,090

The time for payment of the hearing fee

The hearing fee must be paid at the same time the pre-trial checklist is filed. If pre-trial checklists are not required, or the case is on the small claims track, the fees must be paid within 14 days of:

  1. the despatch of the notice of the trial date or trial week; or
  2. the date when you are told the trial date or trial week, if no written notice is given.

The period of advance notification given to the court.

March 2017 if you settle a Court case before the hearing/trial you can get a refund – the earlier you settle the higher percentage you can get back.

Refunding hearing fees
Small claim hearing
You could get a full refund of the hearing fee if you notify the court in writing, at least seven clear calendar days (excluding the date of receipt and date of hearing) before the trial date or start of the trial week, that the case is settled or discontinued.
Fast track, multi track or non-money claim hearing
You could get a refund of some or all of the hearing fee if you notify the court in writing that the case is settled or discontinued. The following amounts will be refunded where the court is notified:

  1. more than 28 days before the hearing, 100% of fee;
  2. between 28 and 15 days before the hearing, 75% of fee;
  3. between 14 and 7 days before the hearing, 50% of fee;
  4. fewer than 7 days before the hearing, no refund.

The position from 6 March 2017

If a case has already given notice of the trial date, or notice of the start of the trial period, before 6 March 2017, the position above applies.

If the court gives notice of a trial date, or notice of the start of the trial period, on or after 6 March 2017, hearing fees are non-refundable, regardless of track or the period of advance notification.

The time for payment of the hearing fee

Hearing fees will need to be paid further in advance of the hearing.  There is a significant increase. The position is a little complicated.  The steps are as follows:

  1. Identify the relevant date – the date on which the court gives notice of the trial date or trial period or the Monday of the first week of the notified trial period.  Written notice is given on the date on which the notice is sent out from the court. Oral notice is given on the date on which the notice is communicated by the court.  Where notice is both in written form and given orally, the notice is given on the date that the written notice is sent out from the court.
  2. If notice is given:
  • 36 days or more before the relevant date, the hearing fee is payable at least 28 days prior to the trial date or the Monday of the first week of the notified trial period.
  • less than 36 days before the relevant date, the hearing fee is payable within 7 days after the date on which such notice is given.

HMCTS has issued a letter clarifying the position about the refund of hearing fees, following the CPR changes coming into force on 6 March 2017.  The text below is taken from a letter circulated to Bristol Law Society and is available on their website here.

It reads as follows.

Subject: Civil Hearing (trial) Fees – Refunds

HMCTS kindly inform Solicitors of changes which will come into effect from 6 March 2017.  The new provision will remove the right to a refund of a hearing fee if the fee is paid and settles before the trial hearing.

This change does not affect any case in which the court gives notice of the trial date or the start of the trial period before 6th March 2017. A refund will be due in line with the current process and rules for all such cases.

In addition, there are the following associated process changes to Money Claims which are also being brought in on the 6th March.

Payment of the hearing fee (2.1 of the current Civil Fees Order) for the trial of hearing of a case allocated to the Small, Fast or Multi Track either in the County, Queens bench or High Court, is now required no later than 28 days before the trial takes place.

Alternatively, a properly completed “Help With Fees” application should be filed with the court no later than 28 days before the trial takes place.

In the event the hearing fee is not paid or a properly completed “Help With Fees” application is not filed at least 28 days before the trial date, the court will issue an automatic strike out order of the claim/counterclaim.

If your claim is struck out, it will no longer exist.  The hearing will be vacated, unless a counterclaim survives the claim being struck out. If you wish to start fresh proceedings, a new claim must be filed. An application to reinstate the claim can also be made together with the appropriate fee or application for help with fees.

In the event the hearing fee has been paid and an agreement/settlement is then reached the hearing fee is non refundable. If a consent order settling the matter is requested after the trial fee has been paid, then the consent order fee is still payable.

Comment

Most cases settle.  They often do so shortly before a hearing.  An upcoming hearing focuses the minds of the parties on the risks, pressures, stresses and costs of proceeding to a hearing.  One tool to encourage the parties to resolve their disputes by settlement without a hearing was the possibility of having a hearing fee refunded.  This incentive is now removed.

The impact of this change is greater in those cases where the amount of the hearing fee represents a higher proportion of the recoverable costs in the case, i.e. claims allocated to the small claims track. Claims in the small claims track often involve litigants without legal representation, because legal costs are not usually recoverable.  The most significant disbursement to which a litigant is put may well be the court fees.  Some litigants in person may regard the non-refundability of the hearing fee as a disincentive to settle: after having paid the hearing fee, with no prospect of it being refunded, perhaps they will want to have their ‘day in court’ that they have paid for?

In claims allocated to the fast track and multi-track the hearing fee represents a lower proportion of the likely overall recoverable costs and the loss of the ability to receive a refund has less of a financial impact.

A claimant who has paid a hearing fee and subsequently settled the claim will seek reimbursement from the unsuccessful defendant, who will no longer be able to argue that the claimant should have sought a refund from the court.  Instead, the focus of the defendant’s argument will be on whether the claim could have been settled earlier by the claimant before the payment of the hearing fee became due.

One aspect is clear. Regardless of the potential dispute between litigants, hearing fees will have been paid to HMCTS earlier, and retained by HMCTS in circumstances where they would otherwise have been refunded to paying parties.  That can only benefit HMCTS finance and cashflow, at the expense of litigants.