For a client with a legal case it may, understandably, not cause any concern that the Ministry of Justice is seeking to hike Court Fees
Disbursements and fees such as court hearing fees, listing fees and all the applications in between are part of the reason why a claimant will instruct solicitors; not only to handle their case with the benefit of high quality legal services and the breadth and depth of experience within the firm, but to arrange the coverage and insurance that allows for the no win – no fee case.
The costs of the case are covered in the background and the Claimant will turn their thoughts towards what their award might be.
In the same way these issues sit in the background for a claimant’s concerns, the detrimental effect of these fee hikes to the client creeps in unbeknownst to them, and all too obviously to their solicitors.
An ‘enhancement’ denoting some form of improvement whereas ‘Hiked’, which is what the proposals are, betrays the proposals’ true callings.
The Civil Proceedings and Family Proceedings Fees (Amendment) Order 2015, or the “enhanced court fees” proposals, are named perhaps to make them sound a more palatable proposition. An ‘enhancement’ denoting some form of improvement whereas ‘Hiked’, which is what the proposals are, betrays the proposals’ true callings.
These are stated by the Ministry of Justice as due to come in to force in April 2015, however a different story is told on the court floor. Notices are already going up to give warning that the proposed changes may come in to force as soon as early March, attesting to the pace at which the government has sought to get these proposals through Parliament despite the Law Society’s judicial review challenge.
The fee hikes will impact both claimant and defendant solicitors alike (the government is proposing measures across various areas of legal practice; however this article will focus on civil cases). The measures, currently being debated by Parliament, include amending of court hearing fees for money claims of more than £10,000 by increasing to 5% of the total sum claimed, and capped at a maximum of £10,000.
So for example, a case worth £10,000 would have previously attracted a fee of £455, and now under the new proposals £500. For cases worth up to £15,000, fees will now go up from £455 to £750.
For a claim valued at £20,000 the fee will rise to £1,000 from £610, increasing by 64%. At the £150,000 level, the fee will rise to £7,500 from £1,315, an increase of 470% and for £250,000; an increase of 481% from £1,720 to £10,000.
Other proposals include increasing possession claims from £75 to £355, and general applications from £100 to £255.
As a parallel example as to why these fees are disproportionate, consider New York, a highly litigious state: The New York fees, when compared to those as proposed in England, are in the range of 25 to 100 times smaller; and the proposed increases in England remain without what appears to be any practical foundation.
More crucially what that same declaration fails to address is the proposal to abolish the refund of hearing fees when early notice is given that a hearing is not required.
The Government proposals claim that those cases with value under £10,000 will not be affected, and further that 90% of all money claims fall under this bracket. Thus, the implication being that the majority of Claimants need not be concerned by these changes. This statement ignores that cases, as evidence and symptoms develop, will move from this bracket to over the £10,000 threshold. More crucially what that same declaration fails to address is the proposal to abolish the refund of hearing fees when early notice is given that a hearing is not required.
Or, in other words, once the fee is paid the defendant solicitors are going to be paying this disbursement no matter whether they settle or go to trial. So where a defendant in the past may have settled a close call case rather than running the risk of a trial, and the potential costs consequences, surely what will follow is the defendant taking more of these cases to trial on the basis that they may end up paying no costs at all – and all for the cost of Junior Counsel appearing.
The majority of declarative responses to element this part of the proposals agree that it is flawed, considering the proposal are neither ‘just or equitable’, having a ‘perceived unfairness that the public pays for something they don’t get’; most telling that ‘this is another bar to encourage settlement and seems inequitable when the applicant has not had the benefit of the Court time he is charged for’. Worse, some say that the proposals are pure “profiteering” by the Ministry of Justice, and would end any incentive to mediate or settle cases.
So where are we left? With the claimant, who comes to the legal market in a culture of repeated government cost cutting and recurrent price hiking?
So where are we left? With the claimant, who comes to the legal market in a culture of repeated government cost cutting and recurrent price hiking? With solicitors firms expected to work more for less and maintain their standard of service? And with a potential and consequential rise in defendant firms increasing the number of cases taken to Court – the cost advantage of early settlement having been removed?
The court then sees an increase in cases, with an ever reducing budget to afford them, and fewer staff to manage them – currently estimated by the Ministry of Justice to be a reduction in the thousands (see page 9 section 8 response to consultation). The time taken for a case to be heard therefore increases, causing parliamentary concern as to ‘problems in the courts’ (caused by them), who in turn and propose changes and overhauls in the form of yet another round of costs measures.
This leaves the Lord Chancellor’s aim of protecting access to Justice in tatters, having managed the direct opposite.
Criticism for these changes has come from all quarters of the legal sector. Senior Judiciary, headed by Lord Chief Justice Thomas of Cwmgiedd, have decried the entire basis of evidence produced by the Government as “far too insubstantial for reforms and increases of this level”, attacking not only the proposal but the foundation from which they arise.
The Civil Justice Council has come out on the matter as well, stating the significant reforms “carries with it far – reaching and damaging consequences for access to justice” on what they describe as a “poor evidence-base”.
To his credit, the Lord Chancellor is not hiding his aim, and his own proposals are to generate £120 million for the Ministry of Justice. The proposals run contrary to the Jackson reforms which sought to encourage fewer cases coming to trial, cause nothing but a detriment and, it is sad to say, works to the sole advantage of the Ministry of Justice coffers.
Access to justice should never be treated as a revenue source, but in my opinion that is exactly what the proposed hike to fees will achieve.