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Rise in court costs impact the status of London as international jurisdiction of choice

24th Jun 2016

London lawyers fear that the UK’s position as the jurisdiction of choice for international litigation is under threat as a result of higher court fees and increasing disclosure costs.

The fee for issuing money claims increased dramatically in March 2015, with claimants being forced to pay 5% of a claims value if that claim was worth over £10,000.

This fee hike in March was met with near universal condemnation from lawyers; however, despite this condemnation, the Ministry of Justice have confirmed plans to raise fees yet again to help to fill a £1billion funding gap in the justice system.

Fearful that small and medium-sized enterprises (SMEs) would avoid litigation because of the greater cost involved, City lawyers urged the government to scrap such proposals for further increases in higher court fees and disclosure costs.

Now, anecdotal evidence from the London Solicitors Litigation Association (LSLA) shows that the perceived expense of litigating in England and Wales is affecting client considerations.

A new survey in association with New Law Journal found that over 60% of LSLA respondents believe that increased court fees had already affected clients’ decisions about whether or not to initiate proceedings, whilst 87% predicted that they would likely affect future decision-making.

The impact of these rising costs has already been felt by businesses of all sizes, with the front-loading of fees proportionate to the value of the case in dispute being unaffordable for smaller companies and troubling to larger organisations.

Some 80% of respondents said costs budgeting had driven up litigation costs overall, although the summary assessment of costs by trial judges was seen as a welcome development, subject to a proper examination of its relationship with budgeting.