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Increase in court issue fee - there is no clever way around this

Increase in Court Fees – not so clever ways of getting round it

Judy Dawson, a member of the Park Square Barristers civil fraud team in Leeds, discusses whether the practice of evading or delaying the payment of the correct issue fee payable by a Claimant by underestimating the value of the claim on the Statement of Value is an abuse of process and how a Defendant should react.

It may be only anecdotal evidence but there does appear to be an increase in claims which are issued with the value limited to £3,000 only for an Amended Schedule to be presented shortly thereafter which adds in a significant amount of special damage, often an additional hire claim which, whilst making no difference to allocation, increases the value of the claim by five-fold or more. With the Defendant having been on notice of the special damage via correspondence and disclosure since first notification, there would appear to be little point in objecting. The Amended Schedule is not necessarily accompanied by an amendment of the value of the Claim Form (which would prompt the demand for the payment of the now significantly extra fee).

Is this a clever, if not entirely laudable, way around the problem, at times insurmountable, for a Claimant solicitor faced with an impecunious client and a large issue fee? For a claim with a Statement of Value limited to £3,000 the issue fee will be £115 (£105 if completed on-line); if that claim limit rises to £25,000, the issue fee will rise to £1,250 (£1,125 if completed on-line). Whilst many clients can find £115 to commence their claim (or the solicitor is willing to pay this), the rise to a figure of over £1,000 may well prevent it.

Before the Claimant solicitor fraternity cry that my cynicism is taking me beyond reality, I should say that this problem has been adjudicated on by the Courts precisely because a solicitors firm deliberately undertook this very tactic (albeit not in any way with the intention to evade the payment of the correct fee in the end, merely to delay its payment until funds were obtained).

The Case

In Lewis & Others v Ward Hadaway [2015] EWCA 3503 (Ch) there were a series of claims brought by one set of solicitors against the Defendant firm of solicitors alleging professional negligence in conveyancing claims. It was clear that the sums of money sought were substantial, as was set out in the letters of claim (indeed the sum sought in total was put at around £9 million). After protracted pre-litigation correspondence, and the Claimants’ request that there should be a standstill agreement on limitation was refused by the Defendant, the claims were issued just prior to limitation (six years). The Statements of Value on such claims were very significantly lower than the letters of claim, with all but one limited to £15,000 (indeed one rather audaciously limited to £300 or less) and the last being limited to under £300,000 (which still represented a significant under value). Such Claim Forms were never served in that format and shortly before the expiry of the four months for service, each Claim Form was amended to significantly increase the value of the claim, with the payment of the now much increased issue fee. (It would appear that the expectation and the actuality was that funding difficulties would resolve within the extra period).

Unsurprisingly perhaps, the Defendant’s solicitor cried foul and applications were made in the various claims to strike out the proceedings for abuse of process. It is perhaps interesting to note at this stage that not only did four separate District Judges who heard the applications all find that the Claimant’s solicitors actions were an abuse of the process of the Court, but the first two applications were adjudicated upon before the Claimant Solicitors undertook precisely the same course of action in the two subsequent claims. It is a brave but foolhardy lawyer who continues on a course of action in the face of a ruling that the same is an abuse of process, even if he disagrees with the decision and is appealing the same.

The Judge’s Findings: (1) There was an abuse of process

The various appeals were heard by Mr John Male QC, sitting as a Deputy High Court Judge. Again perhaps unsurprisingly he found that issuing a claim form with a statement of value lower than the true value of the claim, knowing that it would be amended later to increase the value, was an abuse of process (even though it was always intended that the increased fee be paid and the Claim Form amended before service on the Defendant)

His reasons for finding that such was an abuse of the process of the Court were;

  • It was always the Claimants’ intention to amend the claims at a later stage for no good reason other than to pay a reduced fee initially;
  • The delayed payment of such fees disrupted the cash flow for the court system and there was increased administration caused by needing to process two sets of fees and claim forms;
  • There was public interest in Claimants not behaving in such a way;
  •  There was a possible advantage gained over the Defendant by Claimants being able to stop time running by the payment of a lower issue fee

2)   The Court should NOT exercise its power to strike out the case

The Judge (in agreement with three of the four District Judges who had adjudicated on the applications at first instance) held that the claims should not be struck out for abuse of process as there was no real prejudice to the Defendant and because the period of abuse was limited (in each case, the Claim Form was amended and the correct fee was paid within the four month period of service). He held that to strike out such potentially substantial (£9 million) claims would be disproportionate, when there would be other methods of sanction. It is right to state as well that the Judge specifically weighed in the balance and against strike out the fact that there had been quite a long delay between such application being made after the Defendant’s solicitors were aware of the point (it would appear to in the region of 18 months to 2 years from my reading of the judgment).

3)Summary Judgment was given for the Defendant however on 11 claims

Just as the Claimants were celebrating however, eleven of them got a particularly nasty surprise and, one imagines, their solicitors received a particularly salutary lesson. In eleven of the claims, Court proceedings were only issued AFTER the limitation period had expired. As those who regularly issue proceedings know, this is often the case in that claims which have been delivered to the Court Office will take days (and sometimes weeks) to be issued. Claimants and their solicitors can however take advantage of Practice Direction 7A, paragraph 5.1 which states that as long as the Claim Form was delivered to the Court office within limitation, the claim is “brought” for the purposes of the Limitation Act 1980 on the earlier date.

In what I regard as a masterful judgment (and I salute whichever lawyer acting on behalf of the Defendant thought of this point) Mr Male QC held (relying on the Court of Appeal judgment of Barnes v St Helens Metropolitan Borough Council [2006} EXCA Civ 1372 and in particular the judgment of Hildyard J in Page v Hewetts [2013] EWHC 2845) that a claim issued with an incorrect Statement of Value thereon was not properly “brought” for the purposes of the Limitation Act 1980 and therefore the relevant Claimants could not take advantage of the Practice Direction and their claims were therefore debarred by the Limitation Act 1980. Summary judgment was therefore given in favour of the Defendant.

Actions a Defendant can take in these circumstances

  •  Application to strike for an abuse of process

In the circumstances set out above, the Court, whilst finding there had been an abuse of process, declined to strike out the claim. Are there circumstances where a Court could be persuaded to strike out?

The Defendant is unlikely to be faced (as the Defendant was in the case discussed above) with a situation where the Claimant solicitor seeks to rely on an Amended Schedule, readily admitting that the original Claim Form was issued with a Statement of Value which was knowingly incorrect (as opposed to human error). The Defendant may suspect a deliberate policy, but will have to obtain evidence of the same. If there are a series of claims emanating from the same firm in which the original Claim Form Statement of Value was low, that such claims have been previously indicated to be far higher (and it is usual for the fact of hire not only to be set out in the RTA1 Claims Notification Form but also for the documentation in support of the same to be disclosed), and thereafter the claim increased significantly, then this would provide evidence of a course of conduct which at the very least would require a reasonable explanation from the Claimant solicitor, without which a Court could conclude a deliberate policy of undervaluing.

The Court would have to distinguish the Lewis case cited above so the Defendant would have to point to conduct which was effectively “worse” than in that case. In that case it was the clear intention of the Claimants to pay the fees and the delay in payment was limited to under four months. Furthermore the Defendant was not prejudiced as it never knew the undervalue as it was never served with the Claim Form. The service of an Amended Schedule without amendment of the Claim Form and therefore without the payment of additional fees would put the Claimant in a more precarious position (heralding an intention perhaps not to pay the fees, or at least a somewhat lax attitude to the same given that there would remain before the Court a Statement of Value, supported by a Statement of Truth, which was clearly wrong), and the delay of any such payment beyond the four months in the Lewis case would also worsen the Claimant’s strength in opposing any strike out application.

  • Application to debar the Claimant from amending the Claim Form to increase the value of his claim/ Order that the Claim be limited to the amount on the Claim Form on issue.

In the Lewis case, the Claim Form was amended before service upon the Defendants and the Claimant therefore did not need the permission of the Court to amend (CPR 17.1(1)). In the majority of cases however, the Claimant will need permission of the Court to amend the Statement of Value and the Defendant can indicate its opposition to this either by opposing an application to amend or (more proactively) by applying for an Order as above. If there is evidence of a deliberate decision to understate the value on the Claim Form (as opposed to human error), the Lewis decision can be relied upon to aver that this is an abuse of process. Once this accepted, it can be persuasively argued that to allow such an amendment to enable the Claimant to benefit from his own misconduct would be contrary to the overriding objective. To refuse to allow the Claimant to amend the Statement of Value would seem to me to be an admirable middle ground between the draconian strike out and enabling the Claimant to benefit from misconduct. I am aware of no case law directly on this point. In such a case it will almost always be the case that the delay in amendment will be far greater than that in the Lewis case anyway and the Defendant will have received the Claim Form and therefore can be said to have relied on the Statement of Value, if only in a decision as to how many resources to allocate to the same.

  •  Limitation point

Clearly the set of circumstances that occurred in eleven of the claims dealt with in Lewis will be somewhat rare but where proceedings are issued just after the expiry of limitation such that the Claimant has to rely on the Practice Direction that he is within the limitation period because he delivered his claim to the Court prior to expiry, any subsequent increase of the value must be very carefully considered. In the case of Page v Hewetts [2013] EWHC 2845, the Court was concerned not with a deliberate increase in the value but a case where, entirely  due to human error, the Court fee sent to the Court was below that which it should have been (the solicitor had erroneously included a cheque for £990 rather than £1,390). In that case the claim was held to be statute-barred, with Hildyard J concluding that;

“56. It is, in a way, concerning that the fate of a claim should depend upon the miscalculation by such a relatively small amount of a court fee. I have considered whether it is so de minimis that the Court should not take it into account, or make some exception or allowance.

57. However, as I read Lewison LJ’s judgment in the Court of Appeal, the rationale of treating the receipt by the court of the required documents as sufficient and as transferring to the court the risk of loss or delay thereafter (see paragraph 31 of Lewison LJ’s judgment) is that it is unfair to visit such risk on a claimant after he has done all that he reasonably could do to bring the matter before the court for its process to follow. Lewison LJ expressly described what had to be established by the Claimants: that the claim form was (a) delivered in due time to the court office, accompanied by (b) a request to issue and (c) the appropriate fee. In my judgment, the failure to offer the appropriate fee meant that the Claimants had not done all that was required of them; and they had left it too late to correct the error, which was a risk they unilaterally undertook.”

If human error is not held to be sufficient where the appropriate fee was not delivered, and, by way of the Lewis judgment it is held that the wrong Statement of Value leading to an inappropriate fee also prevents the Claimant from benefiting from this Practice Direction, it seems to me that there is an argument that if a Claim Form is issued with the wrong Statement of Value and therefore the wrong fee even if the wrong Statement of Value is due to human error, then again the Claimant cannot say that he has compiled with this Practice Direction. There is therefore a possibility (and I readily accept that there is no case law on this point) that the logical conclusion is that a Defendant could succeed on this point even if the Defendant could not show that the Statement of Value was underestimated deliberately.


It is a brave but foolhardy solicitor who decides to evade or delay the payment of the appropriate Court Fee by the issue of proceedings with a Statement of Value deliberately lessened to result in the decrease of a Court Fee. If this is a practice which is being adopted, it is one fraught with dangers.

We have always known that it is a brave or foolhardy solicitor who decides to leave the issue or service of a claim until the last possible moment; this case springs yet another trap for those who are forced or have been misguided enough to choose that deadline dance.

Judy Dawson is a leading member of the Park Square Barristers civil fraud team specialising in indemnity, procedural and tactical issues, particularly in dealing with serious fraud rings.