Rising Court Fees Stop Small Businesses Suing Their Debtors

Figures Show A Fall In Court Judgements Against Businesses After Court Fees Increase

23.08.2016

Saffron Otter, Press Officer | 0114 276 4666

Debt experts at law firm Ascent say court fees are a rising barrier to the cash flow of small businesses after figures show they are being priced out of taking legal action against businesses which owe them money after a rise in court fees.

In the first six months of the year, there were 42,091 county court judgements against businesses in England and Wales, which is a 19 per cent fall compared with this period in 2015, according to data from the Registry Trust.  

The fall in figures comes after the Ministry of Justice increased court fees last year for money claims, which include late payments, debt, and compensation. 

There is now a five per cent fee on those bringing claims worth between £10,000 and £20,0000. 

The changes came as a policy to make the civil justice system self-financing. 

Ascent has developed a low cost, self-service debt recovery scheme which is specifically aimed at micro, small and medium-sized enterprises (SMEs).

Mark Higgins, Chairman of Ascent – a member of the Irwin Mitchell Group - said: 

Expert Opinion
“The rising court fees are a barrier to the cash flow of small businesses.

“The system is in place to help small businesses get the money back from debtors that is rightfully theirs, but when the businesses can’t afford this service, they’re left with cash flow issues which may threaten their very survival, which in turn may cause a decline in the performance of Britain’s SMEs. These small and medium sized businesses play a huge part in our economy and in driving industry and represent a key area the government has promised to help.

“We’re unable to do anything about the court fee requirements but our Debt Guard service offers an alternative method for small businesses to help recover their debt in an efficient, low cost, self-service manner which keeps the cost of pursuing debts as low as possible.”
Mark Higgins, Chairman of Ascent & Partner