House of Commons - Explanatory Note
Courts Bill [HL] - continued          House of Commons

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309.     The provisions in the Bill on inspection provide for the establishment of a new courts inspectorate. The Inspectorate of Court Administration will replace but build upon the work currently undertaken by the Magistrates' Courts Service Inspectorate (approximate cost £2m per annum). The new Inspectorate, as well as continuing with the inspection of magistrates' courts and the Children and Family Court Advisory and Support Service (CAFCASS), will also begin inspections of the Crown Court. It is estimated that the additional costs for extending inspections into the Crown Court will be approximately £0.4m per annum. The Inspectorate's work of annual inspections and the identification of best practice will lead to continued improvements in the efficiency and effectiveness of the magistrates' courts and the Children and Family Court Advisory and Support Service and, for the first time, bring undoubted benefits to the management and performance of the Crown Court. Further extension of the inspection regime to other parts of the courts system will be subject to phasing. The new inspectorate will contribute to whatever new arrangements are set in place following the current review of cross-criminal justice inspection.

     Fine enforcement

      310.     The Regulatory Impact Assessment calculates that, using 2000-01 as a base year, each 1% improvement in the payment rate yields a benefit to society of c£4m per annum. On the assumption (which can only be fully tested through the pilot schemes) that implementation of the fine enforcement package achieves a 10 percentage point increase in the payment rate, the benefit to the Exchequer could be around £40m per annum. In addition, there would be further (albeit unquantifiable) benefits arising from the increased credibility of the fine as a sanction for criminal behaviour.

311.     A decision on national implementation of each element of the fine enforcement package would only be taken once the pilots had been evaluated, and on the basis of much firmer cost/benefit projections. Clause 36 of the Bill contains provisions enabling the Lord Chancellor to modify the provisions set out in Schedule 3 in the light of the pilot schemes, so that the enforcement measures which are implemented across England and Wales are both practicable and effective in reducing arrears. Should any of the proposed measures not prove cost-effective, they will not be pursued.

Periodical payments for damages

312.     The Bill provides for a new system of periodical payments for personal injury damages. The financial effects of these provisions on the public sector will affect primarily the National Health Service, which is by far the largest single public sector defendant required to fund damages awards for personal injury. The provisions would create savings for the NHS in that damages awarded by way of periodical payments would not need to include the claimant's costs for investing a lump sum and liability for income tax. Short to medium term cash savings will be gained as streams of periodical payments are put in place instead of immediate lump sums. These savings on damages will reduce the resources diverted from patient care. The RIA tests the effect of different levels of uptake of periodical payments. These demonstrate potential ongoing annual savings of between £22m and £32m, and an initial reduction in annual cash requirement of between £126m and £245m, reducing to a neutral effect and ultimately a smaller negative cash flow impact after 24 to 32 years.

Criminal Procedure Rule Committee

313.     The Bill provides for the establishment of a new Criminal Procedure Rule Committee. This will require the establishment of a new secretariat. It is anticipated that this will eventually consist of six members of staff, at a cost of approximately £0.35m per annum.

314.     In the longer term, the reform of criminal procedure should result in streamlined processes for the criminal courts, with incidental savings for the administration and consequential benefits for the wider criminal justice system.


315.     As a result of the establishment of the new unified courts agency, 10,100 staff will transfer from the employment of the Magistrates' Courts Committees and the Greater London Magistrates' Courts Authority to the Lord Chancellor.

316.     The security clauses have no immediate effect upon the levels of public service manpower. If the decision is taken to provide additional court security officers, then levels will rise.

317.     Fines officers for the unified courts administration would be appointed in every area under provisions in the Bill, after the initial pilot schemes. Existing staff in MCCs (or after abolition of MCCs, in the new courts agency) would become designated fines officers, with statutory powers. The introduction of this post is likely to require some re-organisation of the existing responsibility of administrative staff, but it is not expected to increase the overall salary bill. Any additional manpower costs would be offset by a reduction in enforcement court hearings and a corresponding decrease in warrant tracking by court staff.


318.     The only provisions in the Bill which will result in a significant cost to business, charities or the voluntary sector are those in respect of periodical payments for personal injury damages, and enforcement of financial and non-custodial penalties. The two Regulatory Impact Assessments are being placed in the Library of the House and on the Department's website as accompanying documentation.

     Periodical Payments

319.     The Regulatory Impact Assessment (RIA) on periodical payments shows that the provisions will affect a range of personal injury claims, including claims for clinical negligence, public and employers liability, and motor accidents. The overall impact on claimants will be that, where periodical payments are awarded, they will be relieved of the risks associated with large scale investment of the award and will not have the risk that they will outlive the award. It is anticipated that the net effect for claimants will be positive. The impact on private sector defendants covered by general insurance policies will depend upon whether the liabilities of insurers are raised or lowered, and thus what impact there is on insurance premiums. It is estimated that, subject to changes in annuity rates, insurers could achieve savings of around 4% by purchasing annuities compared to paying a lump sum. However, given the uncertainties involved, the safest conclusion to draw is that the value of claims against liability insurers will not be materially affected. (Details of the impact on public sector defendants is given above).

320.     It is likely that the market for financial advice and management of investment portfolios will shrink as a result of a move to periodical payments, although there may be the opportunity for additional business as a result of the increased use of annuities. The taxpayer will benefit from the savings to the NHS and other public sector defendants of staging payments over a number of years, and also potentially from the removal of the risk that claimants will exhaust their awards and fall back on the State. However, it is not possible to quantify these benefits with any certainty. The overall impact on the courts and lawyers is assessed as neutral.

Fine enforcement

321.     The Regulatory Impact Assessment on fine enforcement shows significant potential benefits in enabling the courts to set fines at an appropriate level, removing the need for some court hearings and providing greater powers to manage and enforce collection of fines - with the overall aim of improving payment of fines and improving confidence in the effectiveness of the fine as a punishment. These benefits outweigh the potential impact on advice agencies who are likely to be involved in advising people (to assist them in completing forms), bailiffs (who would have a role in enforcement) and the organisation maintaining the register of fines. A decision on national implementation of each element of the fine enforcement package will only be taken once the pilots had been evaluated, and on the basis of much firmer cost/benefit projections.

322.     Prior to piloting the measures, it is not possible to say what the effect the proposed measures will have on the payment rate of fines. However, it can be said that the benefit to society from having a financial penalty paid in full is represented by the level of that fine. Therefore, using 2000-01 as a base year, each 1% improvement in the payment rate yields a benefit to society of £4 million.


323.     The provisions in the Bill will come into force on days appointed by the Lord Chancellor by order.

324.     Clause 42, effect of Act of Settlement on existing justices of the peace will come into effect as soon as is practicable after Royal Assent.

325.     It is anticipated that the provisions in the Bill on unified administration and bringing the courts closer together will be brought into force on a day appointed by the Lord Chancellor, not before April 2005.

326.     Provisions on fine enforcement will be piloted as soon as possible after Royal Assent, with national implementation proceeding according to the effectiveness of the measures.


327.     Convention issues arise in relation to a number of provisions in the Courts Bill.

328.     Under clause 6 and Schedule 2, local authorities will be deprived of their property (some of which takes the form of liabilities). The Government considers that any deprivation is in the public interest and that a fair balance has been struck. Central Government already makes grants in the sum of 80% of the costs to local authorities of fulfilling the functions of which they are being relieved under the Bill. Given the relative contribution of Central Government to the acquisition of any relevant property, the measure is proportionate.

329.     Clause 11 deals with the circumstances in which the Lord Chancellor may remove a justice of the peace from office. The Government is satisfied that the specified grounds and the applicable procedures (including the possibility of judicial review) protect against procedural impropriety or arbitrariness, and that there is no interference with the Article 6 rights of litigants to a hearing by an independent tribunal.

330.     Clause 27 provides that justices' clerks will in future be employed by the Lord Chancellor. Clause 28 (1) makes provision whereby justices' clerks may do things which can be done by a justice of the peace. Clause 29 contains a statutory guarantee of the independence of any clerk exercising a judicial or advisory role. The Government therefore considers that these clauses are compatible with the Article 6 rights of anyone appearing before a justices' clerk.

331.     Clauses 31 and 32 restrict the personal liability of justices, but the Government is satisfied that the provisions are compatible with Article 5.5. This is because they do not affect the possibility of seeking compensation against the Crown.

332.     Clause 36 and Schedule 3 deal with new functions for "fines officers". The fines officer has powers relating to the recovery of what is owed to the court. He does not impose punishment. In the Government's view, no fines officer will determine any criminal charge within the meaning of Article 6.1. A fines officer may, however, make a determination in connection with a civil obligation. The Government considers the provisions for rights of appeal from the fines officer to the court render the scheme compatible with Article 6.

333.     Clause 42 validates the appointment of, and acts of, certain lay magistrates born outside the UK. The Government is satisfied that the clause is compatible with Convention rights because it simply restates (in relation to these particular magistrates) a pre-existing rule of common law that the acts of a judge are valid in law if there is no reason to suppose that the judge's appointment was invalid ("the de facto doctrine").

334.     Clause 45 and Schedule 4 make provision for a magistrates' court to make rulings at pre-trial hearings. The Government is satisfied that all Article 6 issues are addressed. In addition, it is satisfied that any interference with Article 10 rights, by the insertion of new section 8C into the Magistrates' Courts Act 1980 Act and the imposition of reporting restrictions, is proportionate to the legitimate aim of protecting a defendant from prejudicial publicity which could influence future jurors.

335.     Clause 52 gives court security officers powers of search and clause 55 gives such officers power to retain articles. These provisions engage the subject's Article 8 rights but are clear and precise and are justified by the need to prevent disorder and crime and protect the rights of others, namely court users, staff and judges. Clause 53 gives powers of restraint, removal and exclusion, which engage Article 8 rights. They are justified on the same basis. In each case, the powers are proportionate to the legitimate aim.

336.     Clause 54 gives court security officers the power to surrender and seize articles and this engages rights under Article 1 of the First Protocol. The aim is to protect the safety of other court users and the order of the court and the Government considers any deprivation of property justified in the public interest and proportionate to the legitimate aim.

337.     Section 19 of the Human Rights Act 1998 requires the Minister in charge of a Bill in either House of Parliament to make a statement about the compatibility of the provisions of the Bill with the Convention rights (as defined in section 1 of that Act). The statement has to be made before second reading. On 19 May 2003, Yvette Cooper made the following statement:

    "In my view, the provisions of the Courts Bill are compatible with the Convention rights."


     AJA 1999           Access to Justice Act

     BJDCs                Branch Training and Development Committee

     CA (1971)          Courts Act

     CAA 1968           Court of Appeal Act 1968

     CAFCASS          Children and Family Court Advisory and Support Services

     CCA 1984           County Courts Act 1984

     CJA 1991           Criminal Justice Act

     CJS                Criminal Justice System

     Civil PRC          Civil Procedure Rule Committee

     CM (A)A 1968           Courts Martial Appeals Act 1968

     CPA 1997           Civil Procedure Act 1997

     Crim PRC           Criminal Procedure Rule Committee

     DA 1996           Damages Act

     EFH                Early first Hearing

     EAH                Early Administrative Hearing

     FRPC                Family Procedure Rule Committee

     FSCS               Financial Services Compensation Act

     GLMCA           Greater London Magistrates Court Committee

     ICTA 1988           Income Tax and Corporation Taxes Act 1988

     JCE                Justices Chief Executive

     J (NI) Act 2002           Justice (Northern IrelandI) Act 2002

     JPA 1997           Justice of the Peace Act

     MCA 1980          Magistrates Courts Act 1980

     MCCs                Magistrates' Courts Committees

     POA 1985           Prosecution of Offences 1985

     RIA                Regulatory Impact Assessment

     RPI                Retail Prices Index

     SA 1887          Sheriffs Act

     SCA 1981           Supreme Court Act

     TUPE                Transfer of Undertakings (Protection of Employment)

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Prepared: 21 May 2003