Raising court fees would be a bad move

Justice minister Chis Grayling has hinted that foreign litigants will have to pay more to use UK courts than domestic litigants, but Jeremy Winter isn’t sure this is a good idea

A statement to parliament made by minister for justice Chris Grayling last Tuesday (26 March) has been interpreted in some quarters as a hint that he plans to introduce higher court fees for foreign businessmen – including the famous and in some cases late, lamented Russian oligarchs – who pursue disputes in British courts. If that is indeed what he does intend, then it is important to try to scotch the idea as early as possible.

Without doubt, any possible short term gain in court revenue through higher court fees would be rapidly outweighed by the loss of tax revenue that the Treasury would suffer as a result of discouraging overseas litigants from using the British courts, and so British lawyers.

Jeremy Winter
Jeremy Winter

The relevant part of what the minister actually said was:

“Our courts and judiciary command great respect around the world and we should be proud of their international reputation and the contribution they already make to our economy. This country is a major centre for legal services and dispute resolution.

“I want to explore how we can further enhance the position of the UK at the centre of the international legal market and the revenue it can generate. I also want to ensure that those who litigate in our courts pay their fair share, and that it is possible to raise the revenue and investment necessary to modernise the infrastructure and deliver a better and more flexible service to court users.

“I have therefore asked my department to consider appropriate vehicles to achieve these aims, and the organisational structures that might best support this. I am clear that any new model must support the administration of justice as a core pillar of our constitution and its effective delivery will remain an important responsibility of the state.”

The reference to “that those who litigate in our courts pay their fair share,” followed immediately by talk about raising revenue, is certainly enough to give good grounds for concern that he does intend to hit foreign litigants harder than domestic ones. As well as depressing demand for English litigation, he also needs to be sure that any measures he introduces do not discriminate against non-UK EU nationals and so breach EU law.

The President of the Law Society has said that “in a time of fiscal austerity, it is right that the MoJ [Ministry of Justice] seeks to find new and innovative ways of funding and updating the courts service. The MoJ’s review should have at its heart the principles of ensuring that justice is accessible to all, maintaining the rule of law through an effective impartial courts service, and enhancing the international competiveness of the jurisdiction”.

That could be seen as an endorsement for the minister’s plans. But the president does recognise the importance of “enhancing the international competitiveness of the jurisdiction”.
Raising court fees to a degree that makes any difference is likely to have a depressing effect on our competitiveness.

Jeremy Winter is a partner at Baker & McKenzie