On April 6 2017, the Civil Procedure Rules were amended to introduce a sanction whereby failure of the Claimant to pay the Trial fee (or Hearing fee as it is also known) by the appropriate date would see the Claimant’s claim be automatically struck out.  This also applies where an application for remission has been refused or granted in part.

The first place to start is another change made to the Trial fee.  The payment of the Trial fee is now non-refundable if the matter settles prior to Trial, but to counter that, the date by which the fee has to be paid is closer to the date of the Trial.  The payment is now due 28 days before Trial if notice is given more than 36 days before Trial, or within 7 days of the notice if less than 36 days before Trial.  These dates are known as the “Trial fee payment date.”

As we now know what is meant by the Trial fee payment date we need to consider the relevant rules.  The new CPR 3.7A1(7) states as follows:-

“(7) If –

  • The Claimant has had notice in accordance with this rule to pay the Trial fee;
  • The Claimant has not applied to have the Trial fee remitted in whole or part; and
  • The Trial fee has not been paid on or before the Trial fee payment date,

The claim will automatically be struck out without further order of the Court, and unless the Court orders otherwise, the Claimant will be liable for the costs which the Defendant has incurred.”

The order for costs is also dealt with at CPR 44.9(1) which states that a costs order will be deemed to have been made on the standard basis where CPR 3.7A1 applies.

What can be seen from the above is that the strike-out of the claim and the subsequent cost order is automatic and occurs without any need for judicial discretion or involvement.

Where the Trial fee has not been paid but there is a counterclaim, then the counterclaim will still stand.  However, the same rule applies to counterclaims in that they will be automatically struck out should their Trial fee not be paid on time.

How to avoid falling foul of the rule and what happens if I do? 

The most obvious way is to be aware of the deadlines and make sure payment is made promptly.  However, this is not always as straightforward as it seems.  With the Court now not providing refunds of fees for settled cases, and with firms cash-flow always prevalent, some Solicitors try to wait as long as possible before paying in an attempt to negotiate a settlement before the need to pay, and sometimes it can be missed.  It could also not be received by the Court which makes no difference as to whether the claim is struck out or not.

The reality is that it is almost impossible to imagine that Solicitors would not fall foul of this rule on occasion.  The penalty for this is strict.  If a Solicitor does forget to make the payment then they must make an application to reinstate immediately, and within 7 days of the Order.  Any application must be conditional on payment of the fee being made.  The speed of the Application is of utmost importance.

All seems black and white – any areas of grey?

It is not yet known the position with regards Disposal Hearings.  When Judgment has been entered and the matter has been listed for a Disposal Hearing, it is not known whether a Trial fee is payable at that point.  The case of Bird v Acorn Group Limited [2016] EWCA Civ 1096 concluded that a Disposal Hearing was to be treated as a Trial for the purposes of costs and so should in theory attract a Trial fee with the same consequences.  However, there are no provisions within the CPR or practice directions to that effect.