Case Stayed Over Failure to Pay Correct Court Fee

The government (relatively) recently (April 2015) introduced large increases to fees for issuing a claim in the civil courts. As a result, the issue fee for a claim that may be in excess of £200,000 would be £10,000. This can cause complexities in intellectual property (IP) claims where it is hard to know the true value of a claim until liability has been decided and accounts provided. It also potentially creates a problem for companies who may not have the cash flow to afford such an upfront cost. In a current IP related claim, the High Court ruled that a claim must be stayed until the correct fee is paid.

The case of Lifestyles Equities CV & Anor v Sportsdirect.com Retail Ltd involves allegations of trade mark infringement and inducement of a breach of contract. The Claimant initially submitted a court issue fee of £480, which is the amount payable for a non-money claim in the High Court. They said that they were unable to quantify damages at that stage but expected them to be substantial and undertook to pay the appropriate court fee for the level of damages eventually sought if they were successful in the claim.

The Defendants challenged the Claimant's approach on the basis that in addition to the trade mark claim (which the Claimants had said they could not quantify at that stage) the Claimant had also brought a free standing claim for inducing breach of contract. It argued that the existence of this claim meant that the claim as a whole could not be classed as a non-monetary claim.

The Court agreed with the Defendants and has now stayed the claim until the correct fee is paid by the Claimant. The Court said that the existence of a claim for an inquiry as to damages for inducing breach of contract was fatal to the argument that this matter was a non-money claim, as a claim for damages was by extension a claim for money.

Though it is arguable either way as to whether the Court has reached the correct decision in this matter, this case does demonstrate the difficulties caused by the increase in civil court fees. For many small companies it is perfectly foreseeable that a dispute with a major supplier or customer could be worth a substantial sum of money but it does not necessarily follow that those companies have the resources to pay such a large court fee. The court fee can be recovered from a Defendant but only if the Claimant is successful in the claim.

Companies are used to factoring in the cost of legal representation when weighing up the benefits of bringing a claim but this case demonstrates that they will now also have to include the level of the Court fee payable in any consideration of legal action.

If you have any questions on the above, please do not hesitate to contact the team at McDaniel & Co. on 0191 281 4000 or legal@mcdanielslaw.com.