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Lovetts Lambasts 97% Increase In Court Fees

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Businesses face massive increase in cost of recovering debt, in Government ‘own goal’

This week, the Government has confirmed the implementation of its planned increase in Court Fees following a consultation process at the start of the year.  With just 4 week’s notice, many businesses will face a 97% hike in the cost of pursuing over half of their claims for commercial debt.  Lovetts, the commercial debt recovery solicitors is warning that increasing fees for debts between £1500 and £15,000 will damage the cashflow of small and medium sized firms in the midst of recovery, citing the move as a spectacular ‘own goal’ for the Government.As part of a set of measures to increase revenue from the Courts from £490m to £625m, Court Fees for small commercial claims between £3,000 and £10,000 are rising by over 100%.  For example, a claim for £3,500 will attract an increase from £85 to £180.  A claim for £6,000 will attract an increase from £190 to £400.

Charles Wilson, CEO of Lovetts says: “From the outset, the Government has failed to distinguish between the claimants that specialise in consumer collections, or debt purchase, and the heart of UK business which is mid-range bulk debt dealt which will see Court Fees almost double overnight. Essentially, the heartland of commerce will, for at least 50% of its claims from £1500 to £15,000, be paying an increase of 97%.”

Of course, we are actively advising our clients be vigilant in recovering all Late Payment compensation, interest and costs possible, but it is the risk of non-payment that may deter creditors from seeking redress through legal channels. It is the most vulnerable businesses that will not wish to take this risk.

“These proposals therefore make a mockery of the Government’s initiatives to combat late payment – it’s a classic own goal.  The very real danger is that businesses will be tempted to just give up and write-off the debt. Poor payers gamble on the reluctance by SMEs in particular to risk court fees on modest claims of up to £10,000.  This combined with the fact that most firms set policies based on risk and cost-effectiveness points to a situation where late payers will know they have nothing to fear and the whole system of commercial redress will fall into serious disuse and disrepute.”

23 April 14 9:00:10 Europe/London
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