Reduced court fees for insolvent legal entities

When a legal dispute is brought to court, court fees are payable. Court fee is the fee levied by the judicial authority for handling the case. The amount of these fees depends, for example, on the nature of the case, a litigant’s income, and whether a natural person or legal entity is litigating. Under these circumstances, a (legal) person may qualify for the reduced court fee for insolvent persons.

Reduced court fee for insolvent persons

Pursuant to the Civil Cases Fees Act, the reduced court fee for the insolvent may be levied in the following two cases:

1. by submitting a so-called addition; or
2. by submitting an income declaration from the Legal Aid Board.

Natural persons with a low income are eligible for added legal aid, as a result of which the reduced court fee rate of usually €87 (‘court fee for the insolvent’) applies to them. This differs significantly from the normal court fee for civil claims at first instance, which can amount to around €2,600.

It is often overlooked that under certain circumstances, legal persons may also be entitled to the court fee for insolvent persons. Although legal entities are not eligible for added legal aid, they can obtain an income declaration.

Income declaration

With an income declaration, a request can be made to the registry of the relevant court to reduce court fees. This declaration is issued by the Legal Aid Board, which determines the financial capacity of a (legal) person.

When levying court fees – unlike with added legal aid – only a certain income limit is taken into account. A (legal) person’s assets are not taken into account. This may provide relief for companies that suffered income losses as a result of the corona crisis and have not yet completely overcome them.

Importance of income declaration

Furthermore, an income declaration offers the possibility of reducing court fees in civil cases. This is relevant when an entrepreneur wants to file a case himself.  And when an entrepreneur is being sued by another party. If a company has faced substantial turnover losses, the legal entity may be eligible for the reduced court fee for insolvent persons.

In civil cases at first instance, the reduced court fee usually amounts to €87, while the court fee for legal entities can normally be as high as €9,825. For insolvent legal entities, a reduction in court fees of up to 99% can thus be achieved.

Get advice

Do you have any questions? Then contact one of our lawyers by mail, telephone or fill in the contact form for a free initial consultation. We will be happy to think along with you.