4 March 2014Print This Post

Commercial barristers and Law Society join chorus of opposition to court fee changes

MoJ: court fees proposals roundly condemned

The Ministry of Justice’s (MoJ) proposals to increase court fees for litigants above cost price have been roundly condemned once again, with the Law Society and commercial barristers adding their voices to what has become a chorus of disapproval.

The Commercial Bar Association (COMBAR) poured cold water on government research which in a consultation paper, published in December, it claimed showed an “untapped willingness” among those pursuing commercial litigation to pay more than in standard money claims.

The Law Society opposed each proposed increase and raised a fundamental objection on the grounds that if claimants cannot pay court fees and resolve disputes in the courts, it would have “profound social consequences”, such as people “taking the law physically into their own hands”.

The MoJ’s claim that cost was no barrier to commercial litigants was “almost certainly wrong”, said COMBAR. On the contrary, it continued: “The proposed changes are likely to have an adverse impact on the competitiveness of the UK legal market, and may cause long-term damage to the UK’s reputation as a world-leading provider of high-quality legal services.”

The MoJ’s “good work” in promoting the UK as a litigation centre would be undermined by a “dangerous step backwards”, which the consultation represented, said COMBAR. If fees were regarded as excessive in high-value commercial proceedings, parties would “simply litigate or arbitrate elsewhere”.

It added that the changes would hit not just those already paying significant fees, “but also individuals and SMEs involved in modest disputes”. In any case, an increase in fee income would be “more than offset” by the loss of tax income from a contraction in legal work.

COMBAR produced a table showing the percentage increases of the enhanced issue fees proposed by the MoJ. All claims with a value of more than £400,000 faced fee increases of 1,098% and those of £50,000-£350,000 increases of between 265% and 938%.

The Law Society’s response was no less damning, but argued that on principle the state should fund “a substantial proportion of the cost of the civil justice system” rather than litigants. Charging ‘enhanced fees’ over and above the cost of providing the services was “not acceptable”, Chancery Lane said, and amounted “to the state seeking to make a profit from its citizens’ misfortunes”.

The fee remission policy which the MoJ has created to assist impoverished litigants required too low a level of income to help the majority of individuals and the process of applying for it was too complicated, the society went on. It observed that service standards in the courts had fallen since the last increase in court fees and facilities closed or diminished.

The society challenged the government “to demonstrate where the income derived from the courts is being expended” and added that it suspected it was being diverted to the Exchequer “when it should be devoted to improving the service offered to the public”.

The fee reforms have been criticised by a variety of organisations so far. The Civil Justice Council – whose chair is the Master of the Rolls, Lord Dyson – has warned of the “chilling effect” they could have on claims. Solicitor litigators have warned that claimants could face a fee demand greater than their legal costs, and the independent regulations impact watchdog, the Regulatory Policy Committee, has said the impact assessment accompanying the MoJ’s court user fees consultation was not fit for purpose.

By Dan Bindman

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