"Court fees and justice in claims" [της Νάντιας Ζορμπά, δικηγόρου]

Justice and legal procedures have always been in a complex conjunction, with many attempts throughout the years by authorities to balance and fill the gaps in their dynamic relationship. However, with the recent introduction of updated Court fees, that have been announced in United Kingdom earlier this year,  the legal costs are raising significantly for any claim brought in English jurisdiction.

The effect is not insignificant, especially for low-cost claims in the marine and trade field. It has been expressed that the effects are already visible for those who pursue a low-value marine claim, as the disproportion discourages the claimants from accessing legal procedures.

It has been claimed that the rise of the legal expenses in marine disputes enables the defendants to put the claimants’ determination at test, rather than actually encourage them to reach an amicable settlement during the negotiations. The initial purpose, to encourage the amicable settlement at an early stage, is not served in fact.

A simple example is a non-payment of freight of the amount of £150,000. With the previous regime, the Court fees would have been around £1,120, while with the recently introduced Court fees the same expense would raise up to £7,500. The difference is not negligible and for many shipowners (perhaps with a singleton fleet) this can constitute a catalytic factor in their decision to proceed with the claim or not, especially when the prospects for a successful result may be around 60%-65%. It is no news that the market is in distress and many shipowners have found themselves in financial hardship lately. When the defendant knows that the claimant is facing financial difficulties, this can be used against the innocent shipowner, who may be forced to quit the claim, in view of the high legal costs and the reluctance of the defendant to reach a settlement.

Of course, in case the claimant wins the case the Court fees will be paid by the defendant and this comes as a counterbalance to the high rates. This may encourage the defendants to settle the claim before the legal proceedings, when they are aware or convinced that the claimant shipowner can afford the higher legal expenses and he would not hesitate to proceed to litigation.  Therefore, the real dispute may be transformed into a dispute on who will have the financial depth to support its position further.

On the other hand, the same issue can be noted in the practice of security costs in the arbitration proceedings, where the defendants try to exhaust tactically the claimant by demanding high security costs from the claimant shipowner. At times the claimants, not being able to respond to an additional security costs order, they jeopardize the status and the outcome of the claim. Furthermore, there was an inquiry by the House of Commons Justice Committee regarding the impact of the raise of Court fees. It will be interesting to see what the outcome will be.