Posted on the 5th January 2016

SME court fees

As of March 2015, proposed fee increases to a wide range of court proceedings were implemented by the government. These changes mean that any business wishing to claim a sum equal to or over £200,000 in court must pay an upfront fee of £10,000. This situation has been compounded by another government consultation in recent months proposing further increases, which if realised would double the payable amount to £20,000.

Of course, should you win your case, it doesn’t matter how much fees are because they’ll most likely have to be paid back to you by your opponent. But with such large sums of money being required upfront to bring a case to court in the first place, many businesses are not pursuing justice because it’s perceived as too risky.

But businesses do still have options. Here are some tips to help SMEs litigate in the face of rising court fees in the UK:

1. Assess the strength of your case

Before you decide to begin legal proceedings it’s important that you are doing so for good reason. The process can be expensive, stressful and time-consuming, so make sure that you have a case with a strong legal foundation and are not getting involved in a petty dispute.

2. Get a legal professional to assess your case

It never hurts to have a second pair of eyes, especially if they are those of an expert in that particular field. An appointment with a specialist can save time if it transpires your case is of little value, or could reveal you have a very strong case and haven’t been valuing your claim highly enough.

3. Chose the right fee structure

There are different options available for funding your case, so ensure you find the most appropriate one for you. An hourly fee agreement means a case will get very expensive if it becomes long and drawn out. Think about your lawyer too: What’s in it for them? If being paid an hourly fee, long cases benefit them and is there anything ensuring they care if you lose? No-Win-No-Fee formats may offer a good option; if you are offered this, you may have a strong case that is likely to win – but at the cost of a considerable chunk of your compensation.

4. Understand the risk

Losing a case has the potential to be harmful to your business. Damages and both side’s court fees could amount to serious sums of money. The process may also be stressful and time-consuming. If you’ve done steps 1-3 already, the risk of this could be very low, but it bodes well to be aware of the implications and prepare accordingly.

5. Know your alternative funding options

If the upfront costs are too much for your business there are still options for pursuing a claim. Alternative methods such as third party funding or ATE insurance can relieve you of all of the costs of a claim. Third party funding takes care of court fees and legal costs as well as providing specialist legal knowledge – the only cost being a percentage of the money won in the event of a successful claim. In simple terms, you can transfer 100% of the costs and risks for between 10% and 30% of any monies recovered in a successful case.

So, if you are thinking of pursuing justice in the current climate remember to know your case, know the risk, make sure to get specialist advice and remember to look carefully at your funding options: There are solutions which remove all of the risk from you and your business and leave you free to pursue the justice you deserve.