Court Fee remission continues to be a common issue raised by the Defendant during costs negotiations – the Defendant’s position being; if you have not sought remission, we are not offering anything for the Court Fee!
Whilst it is always in a receiving party’s interest to apply for remission, it is also important to keep up to date with the rules surrounding fee remission. Below, we will have a brief run through of some of the changes to the eligibility test.
Disposable Capital Test
Eligibility for fee remission is based on the disposable capital test and gross monthly income test. The disposable capital test has been simplified to a three-band structure (as oppose to the previous 10 band structure) and the lower disposable capital threshold has been increased from £3,000.00 to £4,250.00. As per Article 3 of the Courts and Tribunals (Fee Remissions and Miscellaneous Amendments) Order 2023:
a party satisfies the disposable capital test if the fee payable by the party and for which an application for remission is made is—
(a)up to and including £1,420 and the party’s disposable capital is less than £4,250;
(b)£1,421 to £5,000 and the party’s disposal capital is less than three times the amount of the fee payable;
(c)£5,001 or more and the party’s disposable capital is less than £16,000.”.
If a party satisfies the disposable capital test, they will be considered against the gross monthly income test which will thereafter determine if a party will receive full fee remission or pay all or part of the fee.
The “age cap” was also increased from 61 to 66. This section provides that a party or their partner, aged over 66, will satisfy the disposable capital test if they have less than £16,000 as disposable capital.
There were also a number of changes regarding the income test and the appropriate thresholds in respect of the same – the income threshold is based on the composition of a household. The applicable threshold for a single person (living alone) with no children is £1,420, with an additional £710 applied to this threshold if there is a couple. An additional £710 is applied for each child aged 14 and over and £425 for each child 13 or below.
If a party’s gross monthly income falls below the appropriate threshold, they will receive a full fee remission.
It was also amended that a party with a gross monthly income in excess of £3,000 above the applicable threshold, they will not be eligible for fee remission.
In practical terms, the changes to fee remission does not alter the course of action undertaken by a solicitor. Fee remission should always be applied for as failure to do so gives the paying party an easy target.
The fee remission rules can be found here.
Karl Robson can be contacted here.