Higher court fees and disclosure costs are threatening the Capital’s status as an international legal hub, according to the latest Litigation Trends Survey from the London Solicitors Litigation Association (LSLA) and NLJ, published this week.
The London Solicitors Litigation Association (LSLA) members who took part in this year’s survey expressed concern that the hike in court fees now stood in the way of access to justice for smaller businesses, and was undermining the major international work which is seen as such a strong contributor to the Treasury.
More than 60% of respondents said higher court fees have already affected clients’ decisions on whether or not to commence proceedings, while 87% predicted they would affect future decision-making by clients.
They warned that businesses of all sizes are feeling the impact—the front-loading of fees proportionate to the value of the case in dispute making justice unaffordable for small businesses and troubling to big business.
More than 80% said costs budgeting has driven up litigation costs, with 82% predicting costs will continue to increase in the next five years. The rising costs of disclosure was another source of concern for respondents.
There was a 50/50 split on views about whether the courts’ approach to e-disclosure is working.
Ed Crosse, LSLA president and partner at Simmons & Simmons, said: “Front-loading of the increased court fees has delivered a heavy blow to commercial litigation, especially to smaller businesses which now feel deterred from pursuing legitimate claims.
"It’s also leading to more shopping around by larger businesses who are baulking at the increasing cost of litigating here. It would have been fairer to have sought to generate this increased income during different phases of the litigation thus better aligning fees with the status of the case.
“There are positives to come out of our survey too with summary assessment of costs by trial judges seen as welcome, subject to a proper examination of its relationship with budgeting. The recent Pyrrho Investments ruling [at [2016] EWHC 256 (Ch)] around the use of predictive coding in e-disclosure is also seen as a progressive move.”
In Pyrrho, for the first time an English court expressly endorsed the use of predictive coding software to provide disclosure. Last year, court fees rose to 5% of the value of the claim for cases worth more than £100,000, up to a maximum of £10,000.
142 LSLA members completed the online survey in spring 2016.
