The latest data released by Registry Trust shows that County Court judgments (CCJs) against businesses fell by 19% in the first half of 2016 and the total value of those CCJs fell by 12%.
Falling value of judgments- However, the majority of that fall in value is being felt by smaller businesses.
According to Registry Trust: “The trends for CCJs against corporate and non-corporate businesses were broadly consistent, but the average value of a CCJ against a generally smaller unincorporated enterprise fell five percent compared with a 19 percent increase for a judgement against a corporate.”
Is there a direct correlation between this data and the recent rise in court fees?
It seems quite likely that there might be. An SME facing a court fee of up to £10,000 may feel they cannot afford the risk of “throwing good money after bad” and have no choice but to write off the debt. Claims between £10,000 and £199,999, where many SME claims will sit, attract a court fee of 5% of the value of the claim. Claims of £200,000 and above attract the fixed £10,000 court fee.
Whilst these fees are unlikely to be welcomed by a corporate, it is undoubtedly less of a barrier. The final report of the Civil Courts Structure Review by Lord Justice Briggs also shows that fast track claims are down 16% and multi-track are down 28%, which would tend to support this conclusion.
The Bar Council opinion
The Bar Council states that the data released by Registry Trust is evidence of the negative impact of rising court fees. Bar Council chairman Chantal-Aimée Doerries QC said: “The courts risk becoming out of bounds for many as the full impact of increased court fees bites. Small businesses seeking debt owed to them by customers, who are often other businesses they supply, can turn to CCJs as a last resort to get the money owed to them, but by increasing court fees the government has cut off those small businesses’ only real and last hope of getting that money, which is vital given how important cash-flow is to SMEs They are being priced out of court.”
The CCUA opinion
The Civil Court Users Association (CCUA) believes that this amounts to a scandalous loss of access to justice is scandalous and states that: “Civil Justice should be a lot more than simply a cash cow for HM Government. It should be returned to what it was always supposed to be, an affordable and effective mechanism, essential for the proper functioning of a civilised society.”