Counting the cost of a new civil approach
16 April 1997
12 November 2013
Timely forwarding of the notice of convocation of the shareholders’ meeting of a limited liability company: presumption of receipt
31 May 2013
23 September 2013
2 May 2013
21 October 2013
The Lord Chancellor's policy of recovering the full cost of the civil courts through fees is wrong in principle, because it assumes the civil courts only operate for the benefit of court users, and wrong in practice, because it erects barriers to justice for people on low or modest incomes.
Civil litigation, particularly in a common law jurisdiction, takes place not only for the benefit of the litigants concerned, but also to set precedents by which unknown numbers of non-litigants then regulate their affairs.
Historically, the costs of the civil courts have been divided between the state and court users, with the state paying the judges' salaries and the cost of court accommodation out of public funds, while other administrative costs were met by litigants. The decision that the full cost of the civil courts should be met solely by users was reached without any public consultation or parliamentary debate.
This approach has been specifically rejected in the US, and also in Australia, where a government-appointed committee recommended "that fees should neither encourage nor be perceived as encouraging decisions by court administrators which are designed to maximise revenue".
Accordingly, we are firmly of the view that there should be no budgetary link between revenue raised by the collection of fees... and the appropriate use of monies".
The substantial increase in civil court fees in January 1997, together with the introduction of a number of new fees, has created a new obstruction for many litigants and potential litigants, despite the recent concession from the Lord Chancellor following his defeat in the High Court.
In response to the decision in ex p Witham, the Lord Chancellor reintroduced automatic fee exemption for litigants in receipt of income support (and family credit in family cases), and remission in cases of undue financial hardship.
While good news for those in receipt of income support, for other low income households the requirement to apply for remission remains unsatisfactory. As evidence submitted on behalf of the Lord Chancellor in the Witham case stated: "The lack of clear criteria in the area of remission led to a potential lack of standardisation between courts and the loss of predictability for litigants."
Accepting his own evidence, the Lord Chancellor should now extend automatic fee exemption to job seeker's allowance, disability working allowance and family credit in all cases, because people in receipt of these means-tested benefits will not be in a position to afford court fees. This would remove uncertainty and save court staff time.
The increases in fees, some by as much as 150 per cent, are bound to lead to a significant increase in the number of applications for remission as people on modest incomes find that they can no longer afford the charge.
In addition, new fees introduced in the county court for an application to set aside or vary a judgment are having a particularly harsh impact on debtors. Legal aid is not available, and the standard nature of the cases will mean that litigants will be unlikely to fulfil the test for fee remission: that payment of the fee "would involve undue financial hardship because of the exceptional circumstances of the particular case".
These new fees will raise less than £1m of the estimated £50m additional fee income. The hardship caused by them is out of all proportion to the income that will be raised and they should be repealed as a matter of urgency.
The costs of civil litigation are likely to rise substantially as the reforms proposed by Lord Woolf are introduced. The Conservative manifesto makes it clear that the cost will be met not by the state, but by current court users.
It states: "We will push ahead with the major reforms now under way... without imposing additional burdens on the taxpayer."
Labour's spokesperson Paul Boateng has said that a Labour government would not reverse the recent increases. Whether a future Labour government would carry on the policy of full cost recovery is unclear, but Boateng's comment that Labour does not regard the court service as a business but "as a public service" is a hopeful sign that an incoming Labour administration would restore the position of state funding for the civil courts.