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Andrew, The Law Society has called on solicitors to campaign against the imminent introduction of increased civil court fees. Can you briefly summarise the proposals?
The government has announced it will proceed with court fee increases for some civil cases from this April and is consulting on further court fee increases. The new fees, which affect money claims, will come into effect in April. Money claims include debt such as loans, utility bills and business debts owed under contracts for goods or services delivered. ‘Unspecified’ claims – for example personal injury where specific amounts of claims are unknown – are also affected. Claims between £10,000 and £200,000 will be charged at 5 per cent of the claim. Those over £200,000 will be fixed at £10,000.
Why is The Society against them?
We have surveyed our members. The overwhelming advice they gave us is that the impact will be threefold. First, small businesses will not be able to recover debts from larger organisations that could take advantage of the new fees, knowing that smaller businesses will not have the funds to take them to court. This will leave some businesses with no option other than insolvency. Second, many ordinary people – both low-income and middle-income earners – will be priced out of the courts, for example when bringing a negligence claim. Finally, there is the impact on solicitor firms. As with other businesses, cash flow can be problematic. Turning to payment on account will mean many individuals and businesses simply cannot afford to seek redress through the courts. Access to justice through the courts is the hallmark of a civilised society.
The Ministry of Justice says they will raise an extra £120m a year to help fund the running of the court system. Surely that’s a good thing?
Being able to seek justice through the courts is a basic right. It is reasonable that some costs should be recovered. However, hikes of more than 600 per cent are simply not palatable, particularly when so many of our members complain of the poor service they already receive from the courts service. Some of our members feel the balance is wrong and more emphasis should be put on trial or hearing fees, rather than cases that never make it to court paying extortionate amounts to prop up the poorly run courts service.
What specific initiatives has The Society launched to engage the legal community in the campaign?
We wanted to find out what impact the government’s fee hikes would have on the ground, so we surveyed our members. Nearly 200 of our members took part, with a further 50 sending us additional feedback. We have written to the Ministry of Justice to ask them to release the data on which they made their proposals. We will also be responding to the government’s consultation on further increases. That consultation closes towards the end of the month and we are urging members who are affected by the increases to respond directly to the government.
What kind of work do you think will most likely be affected if the fees go ahead?
The areas most likely to be affected are personal injury or clinical negligence claims, contract disputes, small and medium-sized businesses, private client work and firms with clients using England and Wales as a jurisdiction of choice, for example international contract disputes.
Our members have told us that people with personal injury claims or clinical negligence claims are already pressed. Often their injury has left them unable to work. The prospect of losing what little they do have in court fees means they are unlikely to pursue claims. Insurance companies and other defendants will know that the fees will be a factor and will therefore deny liability where they may previously have resolved their cases.
Does The Society also have concerns about potential unintended consequences of front-loading court fees?
Our concern is that people with legitimate claims will not pursue their rights through the judicial system because they cannot afford the upfront fees. If disputes are not being heard in the courts then parties to those disputes may well seek to take matters into their own hands in an attempt to resolve the issue. That should be of grave concern to the government and the community as a whole.
What do you think about the claims that the punitive effect of the fees could undermine the Jackson reforms?
We have strong reservations about how successful the reforms, as implemented by government, will be and consider that they may inhibit good claims from being brought. The fee increases will place a significant additional burden on claimants as they will be unable to afford the fees. Furthermore, as a significant number of claims are successful, a heavy burden will also be placed upon compensators who will be liable to pay those increased fees at the conclusion of the case. This is likely to have a detrimental impact on insurance premiums, and is therefore at odds with government policy to reduce insurance premiums.
Do you think there’s an alternative to the introduction of the fees?
We believe that there is a continuing societal good in having the civil court system partially funded by the government. Court users already contribute around 75 per cent of the costs of the civil court system. While proceedings are directly beneficial to the parties in sorting out their dispute, we as a community benefit from the order and stability provided by an accessible judicial system.
There’s also a further consultation open on extra charges for possession claims and general applications in civil proceedings. What’s The Society’s view on that?
We are similarly concerned that the extra charges for possession claims will make the bad position of parties to a dispute even worse. Landlords including local authorities and social housing groups who need to take action to recover a property from an indebted tenant will face additional upfront costs and the indebted tenant, already without the means for paying rent, will face an even larger bill. As costs increase, more litigants in person will appear, placing further strain on the judicial system as court staff assist those unfamiliar with correct procedure and processes resulting in further delays.