The Ministry of Justice has proposed to charge 5% of the value of the claim to all court cases worth more than £10,000.

Justice minister Shailesh Vara today revealed the government’s response to its consultation on court fees and charges.

Vara said plans to increase fees for divorce have been dropped, along with plans for higher fees for commercial proceedings.

But the MoJ will go ahead with the 5% levy which it estimates will bring in an extra £120m a year. The fees will be subject to a maximum fee capped at £10,000.

A further consultation opened today on extra charges for possession claims and general applications in civil proceedings.

Possession claim fees will rise by £75, which the fee for general applications will go up from £50 to £100 for applications made by consent and from £155 to £255 for contested claims. These increases will apply equally to all applicants.

In a written statement to parliament today, Vara said: ‘I have already announced that we will be investing £375m in the courts over the next five years to modernise services so that we can realise long-term financial savings worth over £100m per annum by 2019/20.

‘There is, however, only so much that can be achieved through cost efficiency measures alone. If we are to reduce the costs of the courts to the taxpayer, and protect access to justice, I am convinced that there is no alternative but to look to those who use the courts to contribute more, where they can afford to do so.’

The minister said he did not accept the concerns expressed by many consultation respondents that London’s competitive position as a forum for commercial dispute resolution would be weakened by the new fees.

However, the government opted to ditch proposed fees paid by parties in commercial disputes rising to up to £20,000 and the introduction of a daily hearing fee of £1,000.

In a statement, the Bar Council said the latest proposed increases are deliberately designed to raise significantly more money from claimants than the cost incurred by the courts in handling money claims.  It noted the maximum fee is to be increased by 420%, from £1,920 to £10,000.  

The fee payable for a claim of £200,000 is to be increased by 660%, from £1,315 to £10,000.

Alistair MacDonald QC, Bar Council chairman, said: ‘Cash-flow is the life blood of small businesses and many end up having to pursue late payments and other debts through the court system. Imposing a 5% fee may well make many small businesses think twice before making that claim, and will certainly strengthen the hand of late payers.’