Slump in business CCJs on back of court fee hike

Fears that a rise in fees on £10,000-plus commercial disputes could price many small firms and contractors “out of the courts” appear to have been well-founded.

In fact, data by the Registry Trust show that the number of County Court Judgments against companies in England and Wales in 2016’s first six months slumped 19% year-on-year.

The total worth of those 42,091 CCJs was also down, representing the biggest drops in both value and volume that the Bar Council has witnessed since before the financial crisis in 2008.

The declines follow a decision last year by the Ministry of Justice to attach a fee of five per cent of the claim’s value to all disputes over £10,000, in order for them to be heard in court.

While only small-sounding, the percentage equates to a fee rise of 622% for a £190,000 claim, meaning such a case attracts a fee of £9,500, versus just £1,315 before March 2015.

The calculation helps explain why, speaking before the latest figures from the Registry Trust, Bar Council chair Chantal-Aimée Doerries QC described the fee rise as ‘a very real issue.’

Generally this year, smaller businesses which were not incorporated have fared much worse than their ‘limited’ counterparts, with the value of their business CCJ (now an average of £3,550 for all firms) rising rather than falling.

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Written by Simon Moore

Simon writes impartial news and engaging features for the contractor industry, covering, IR35, the loan charge and general tax and legislation.
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