Business Money talks to City barrister Professor Mark Watson-Gandy about the new rules on court fees

What’s the situation?

The Civil Procedure Rules have been amended to introduce sanctions for non-payment of certain court fees. This has been done by amending CPR Rule 3.7 and adding a new Rule 3.7A1 and 3.7AA.

Sounds dull. Does it matter?

It is likely to provide a very, very nasty and expensive surprise for unwary litigants.

How will this work?

The court will send out a fee notice requiring payment of the court fees by a stipulated deadline – for example, a claimant pays a fee to set the case down for trial.

What happens if the fee is not paid?

If the claimant does not pay the fee, or make an application for full or part remission of the fee, by the date speci?ed in the fee notice, the claimant’s claim will automatically be struck out without further order of the court.

Well, at least they’ll save on the court fee, won’t they?

It will be a false economy. The claimant will also, automatically, be made liable for the costs which the defendant has incurred unless the court orders otherwise.

What if the application for remission of the fee is rejected?

Where an application for full or part remission of a fee is refused, the court will serve a new fee notice on the claimant requiring payment of the full fee by the date specified. The same consequences arise if payment is not then made.

But it only affects claimants?

No. Defendants also have to pay fees when they file a counterclaim or the proceedings continue on the counterclaim alone. If they don’t pay the fee or make an application for full or part remission of it, the court will serve a fee notice on the defendant.

And what if the fee is not paid?

If the defendant does not pay the fee or make an application for full or part remission of it by the date speci?ed, the counterclaim will automatically be struck out without further order of the court.

What if one fobs the court off with a rubber cheque?

They have thought of that. There are separate sanctions under CPR Part 3.7B which apply where any fee is paid by cheque and that cheque is subsequently dishonoured.

Let me guess. You get a fee notice from the court?

Yes. If the fee is not paid by the date speci?ed in the notice, the same sanctions apply. Where the fee is payable by the claimant, the claim will automatically be struck out without further order of the court. Where the fee is payable by the defendant, the defence will automatically be struck out without further order of the court. Either way, the paying party is left liable for the costs which any other party has incurred unless the court orders otherwise.

Can you apply for relief from this sanction?

Yes. A paying party can make an application to have the claim or defence reinstated. It far from inevitable that the order will be granted and you will need a good reason for the failure. Even if you can persuade the court to grant relief, any relief will be conditional on paying the fee within two days if you or your lawyers were in court or seven days from the date of service of the order if you weren’t.

Is this in force?

Yes indeed. It came into force on 6 April this year.

Published in Business Money, April/May 2017