Litigation costs rise: a further nudge towards ADR

From the beginning of last month the cost of taking civil action in the County and Crown courts has risen by around 10% and leading Cheltenham law firm BPE is recommending that companies and individuals think carefully before starting formal court action.

The increase in court fees should come as a renewed incentive to those with a commercial dispute to think twice before seeking remedy through the courts. BPE has always championed the use of Alternative Dispute Resolution (or ADR) and this increase in costs is only likely to increase the attractiveness of such methods to settle disputes. "Serious thought should always be given to alternative dispute resolution before proceedings are issued. ADR encompasses perhaps one of the most effective and increasingly popular methods of dispute resolution: mediation," believes William Charlesworth, litigation solicitor. "When used correctly, mediation can be a very efficient method of resolving disputes."

Charlesworth also points out that further court costs can also occur once the claim has been issued. "As the claim progresses further costs arise, and the fee increases will continue to be felt until the case is concluded."

The Courts are taking an increasing interest in encouraging both sides in a legal dispute to use ADR and if one party unreasonably refuses, then they can be penalised by the Court in respect of their costs, even if they are eventually successful at trial.

"The advantages of seeking a commercial resolution outside of the courts are obvious: you will invariably save costs and you can often secure a swifter resolution to the dispute. A claim pursued through the courts can take months or potentially years to be determined," explained Charlesworth

"It is also important to be aware that the Courts are coming under increasing pressure following cuts to public sector funding: limited resources are being stretched even thinner with the result that each Court will often suffer backlogs in dealing with its workload. With the planned closure of numerous County Courts across the country, further strain will inevitably be placed on those remaining courts.

Those seeking ‘justice’ through the courts should therefore approach with caution."

So the message from the courts seems to increasingly be that, whilst it is advisable to obtain legal advice at an early stage in a dispute, they will increasingly be expecting businesses and individuals to have been through mediation or another form of ADR, before someone utters the immortal words "I’ll see you in court!"

BPE’s Commercial Dispute Resolution team has extensive experience in mediation services and team leader and Partner Philip Radford is a qualified mediator.

These notes have been prepared for the purpose of an article only. They should not be regarded as a substitute for taking legal advice.