APPLYING FOR DISPENSATION FROM COURT FEES: TWO DIFFERENT CASES

I am grateful to my colleague Paul Hughes for sending me a copy of the judgment of District Judge Jenkinson in the case of Stone -v- Allianz Insurance PLC where Paul acted for the defendant.  This, and the case of Cook, discussed below,  relate to the defendant’s ability to challenge payment of the court fee when the claimant may have been able to obtain dispensation.  It can readily be seen that there are, at least,  two different judicial views.    This dilemma provides a useful opportunity to revisit the useful guidance on the remission of court fees.

THE CASE

In Stoney the defendant argued on assessment of costs that the court fee should not be payable on the grounds that the claimant should have sought remission. Stoney v Allianz – judgment (1)

THE CLAIMANT’S STANCE

The claimant’s stance appears to be a bold one (in fact it was more nuanced as we shall see below).

“The Claimant’s solicitors have been aware of this argument throughout. They accept that no application for fee remission was ever made, or, it would appear, discussed or considered. For these purposes they have not adduced any evidence to suggest that the Claimant would not have been entitled to court fee remission, and, as I indicated at the outset, this being an assessment on the standard basis, and in which the benefit of the doubt is effectively afforded to the Paying Party, I propose to approach this issue on the basis that the Claimant would have been entitled to fee remission had such an application been made. “

THE DEFENDANT’S ARGUMENT

The defendant’s position was simple:

“It was unreasonable to incur a disbursement that could have been avoided in its entirety by the completion of a simple application form.”

THE CLAIMANT’S ARGUMENTS

The claimant’s argument was developed and was based on the funding arrangement.

“7. The Claimant’s position is more nuanced. Mr Learmonth refers to his firm’s individual business model. His firm will act for Claimants, including the present Claimant, on the basis that the firm will fund all disbursements (including the court fee) on behalf of the Claimant, and will not seek recovery from the client regardless of the outcome of the case, provided that the client purchases an ATE policy, which reimburses disbursements including the court fee in the event that the claim is unsuccessful.
8. Mr Learmonth makes reference to paragraph 66 of the judgment of the Court of Appeal in the case of Herbert v H H Law Ltd [2019] EWCA Civ 527, which makes it clear that the court fee is a solicitors’ disbursement, which accordingly his firm is required to pay whether or not they are put in funds by the client. He contends that the fee exemption regime exists so as to facilitate access to justice for Claimants who could not otherwise afford to pay the court fee and not, in that context, to effectively ease the cash flow of solicitors in that situation. In fact, he says that he would be misleading the court by completing a form predicated upon a financial inability to meet the court fee, when the fee was effectively funded on the Claimant’s behalf by this arrangement.”

THE JUDGE’S DECISION: BACK TO BASIC PRINCIPLES

The judge did not go into the policy arguments, but rather basic principles as to the assessment of costs.
“11. In my judgment, it is necessary to approach this issue by reference to basic well-established principles, and without imputing policy considerations which I do not consider are a matter for me here. I can fully understand that it is perhaps an unpalatable submission on behalf of a Defendant’s insurance company that the court fee which has been necessarily incurred as a consequence of the negligence of their insured, should be borne not by them but by the state. However, if that position is felt to be wrong as a matter of principle, it is in my judgment a matter for the rules committee or for Parliament to address.
12. On an application of the rules as they stand, therefore, I make the following findings:-
a) The Claimant was entitled to a full remission of the court fee of £455;
b) To achieve this, he would simply have been required to complete a form setting out his means and details of any benefits that he was in receipt of. There has been no evidence adduced on behalf of the Claimant that this would have been an overly onerous or disproportionate exercise;
c) The fees remission application form (as I am told) simply asks financial questions. It does not, for example, enquire as to whether or not the Claimant has alternative means of funding the court fee, such as legal expense insurance, or whether or not he had a solicitor acting, and if so whether they were in a position to fund the court fee. It seems to me that this reflects the basic principle that the costs, including the court fee, are the Claimant’s costs, and are not complicated by the involvement of solicitors or the business model summarised at paragraph 8 (above).
13. It follows on that basis, that I am not persuaded (reminding myself that the burden in this regard rests with the Receiving Party) that the court fee is a disbursement that was reasonably incurred, and in those circumstances, it is not recoverable by reference to CPR 44.3″

AND NOW – A DIFFERENT DISTRICT JUDGE – DIFFERENT DECISION

I am equally grateful to Lee Kipling from Winns Solicitors for sending me a copy of the judgment of Deputy District Judge Jones in Cook -v- Malcolm Nicholls Services. Cook v Malcolm Nicholls Limited (Judgment) (11.04.19) (1)

THE FACTS IN COOK

The defendant sought to overturn a decision on a provisional assessment that the defendant should pay the court fees of £10,000.  The defendant argued that the claimant should have sought remission.  The judge rejected the defendant’s submissions.

“I am not convinced that it is open to the defendant to question the terms of the retainer between a solicitor and his client, nor am I convinced that it is open to them to question the advice that a solicitor provides to his client. They are not part and parcel of the contract of a retainer between the two and, of course, they do raise these matters on the basis that they wish to avoid payment of the court fee of £10,000. What they say is that it was not reasonable or in the interests of the client to incur that fee but I am not convinced that that is the correct matter for the defendant to raise as between the solicitor and its client.
11 Going on to the other and I think finally the last issue: was the fee a disproportionate expense and the case which I have been referred to here is Kazakhstan Kagazy Plc & Ors v Zhunus & Ors [2015] EWHC 404 (Comm). I take the view that the fee is actually set by the Court Service. It is a fee that is more a question of challenging in this regard as to whether or not it was proportionate and whilst I understand the argument put forward by the defendant that it should be at the lowest amount that can reasonably be spent, I do not think that that applies to the imposition of a fee by a third party upon the litigant when they apply to the court where those fees are actually set by Parliament or others.
12 I also have been referred, particularly by the defendant, to the case of Peters v East Midlands Strategic Health Authority & Ors [2009] EWCA Civ 145. I have found that this is helpful. I distinguish that as pointed out to me again by the defendant that that involved a case whereby a public body was being asked to pay for care and accommodation and that is not exactly the same as being asked to pay for a court fee with the prospect of any remission. However, I do and have been referred to paragraph 89 of that judgment where it says Lord Justice Dyson, as he then was, considered the view that it was reasonable for the claimant choosing to be self-funding and damages from the wrongdoer in tort rather than burdening the taxpayer.”

USEFUL HELP ON COURT FEES

 

OFFICIAL GUIDANCE

GUIDANCE FOR PRACTITIONERS

I have done a webinar with APIL – Court Fees: Avoiding the Pitfalls – fees, fee remission, abuse of process and striking out, which is available on demand (for a period), details area available here. 

There is a (now somewhat dated) post on this blog  MITIGATING THE IMPACT OF THE COURT FEE INCREASE 2: FEE REMISSION – EVERY LITIGATOR HAS TO KNOW THIS NOW