The government announced on Friday that it will go ahead with its proposal to introduce percentage issue fees for money claims over £10,000, calculated as 5% of the value of the claim subject to a cap of £10,000 (see our post summarising the proposals put forward in its December 2013 consultation). Issue fees currently range up to £1,920 for claims of more than £300,000, so the new fees will mean a fivefold increase for claims at that level.

The government has however decided against implementing its proposal to introduce even higher fees for claims in the Commercial Court, Chancery Division and Technology and Construction Court. These would have involved either a higher cap to the issue fee (either £15,000 or £20,000) or a new daily hearing fee (£1,000 per day, or £500 for hearings of half a day or less).

In addition, the government is consulting on further proposals to raise fee income, including a significant increase in application fees in civil proceedings, from £155 to £255 for a contested application and from £50 to £100 for an application without notice or by consent. That consultation will be open until 27 February.

The government’s decision to go ahead with substantial fee increases has been met by expressions of concern by various bodies, including the senior judiciary and the Civil Justice Council, as to their potential impact on access to justice as well as London’s competitive position as a centre for international dispute resolution. We share those concerns, though we welcome the government’s decision to abandon its proposals to introduce further increases for commercial claims.

As the new 5% issue fee is an “enhanced fee”, meaning that it is aimed at recovering more than the cost of the services to which it relates, it must be introduced by statutory instrument. The government has said it will prepare and bring forward the necessary legislation so that the new fee can take effect before the start of the 2015/16 court term, subject to Parliamentary time being made available.