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Session 2008 - 09
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Public Bill Committee Debates

The Committee consisted of the following Members:

Chairman: Mr. Eric Martlew
Bellingham, Mr. Henry (North-West Norfolk) (Con)
Beresford, Sir Paul (Mole Valley) (Con)
Brake, Tom (Carshalton and Wallington) (LD)
Hall, Mr. Mike (Weaver Vale) (Lab)
Hemming, John (Birmingham, Yardley) (LD)
Jones, Helen (Vice-Chamberlain of Her Majesty's Household)
MacShane, Mr. Denis (Rotherham) (Lab)
Moon, Mrs. Madeleine (Bridgend) (Lab)
Prentice, Bridget (Parliamentary Under-Secretary of State for Justice)
Smith, Jacqui (Redditch) (Lab)
Strang, Dr. Gavin (Edinburgh, East) (Lab)
Stuart, Mr. Graham (Beverley and Holderness) (Con)
Timpson, Mr. Edward (Crewe and Nantwich) (Con)
Vis, Dr. Rudi (Finchley and Golders Green) (Lab)
Watson, Mr. Tom (West Bromwich, East) (Lab)
Wright, Jeremy (Rugby and Kenilworth) (Con)
Anne-Marie Griffiths, Rhiannon Hollis, Committee Clerks
† attended the Committee

Fourth Delegated Legislation Committee

Tuesday 10 November 2009

[Mr. Eric Martlew in the Chair]

Family Proceedings Fees (Amendment) Order 2009
4.30 pm
Tom Brake (Carshalton and Wallington) (LD): I beg to move,
That the Committee has considered the Family Proceedings Fees (Amendment) Order 2009 (S.I. 2009, No. 1499).
The Chairman: With this it will be convenient to consider the Civil Proceedings Fees (Amendment) Order 2009 (S.I. 2009, No. 1498) and the Magistrates’ Courts Fees (Amendment) Order 2009 (S.I. 2009, No. 1496).
Tom Brake (Carshalton and Wallington) (LD): A couple of minutes ago before the debate started, the Minister asked me whether I had much to say. I assume that that was an entreaty for me to speak at great length on the subject, but she is fortunate that my remarks will be relatively brief, although my hon. Friend the Member for Birmingham, Yardley will also want to intervene—presumably briefly—in the debate this afternoon.
As members of the Committee will know, we are debating the statutory instruments today, which were tabled before the summer recess, as a result of a Liberal Democrat prayer against them. They introduce a change from partial to full recovery of court costs in civil proceedings. It was our view that such changes should not be introduced through the negative resolution procedure without parliamentary scrutiny. We are opposed to the statutory orders in principle, the fundamental reason being that the changes do not recognise that the legal system can be a public good.
The Government insist that research does not support the idea that court fees affect people’s decisions on whether to seek legal redress. However, when the proposals are put in the context of the Government’s other policies, such as the clampdown on legal aid spending, the extension of means-testing and the reduction of legal costs that can be recovered by acquitted defendants, it is clear that the direction of travel on which they have embarked could affect access to justice. It is particularly unfair that the Government’s policy is increasingly telling defendants who are found innocent that they can only recover the proportion of their costs covered by legal aid rates, which simultaneously requires many civil litigants to pay the full costs of court fees involved in bringing their case.
The extent of the savings that the Government state will arise as a result of the changes will be an overall increase in fees income of £38 million a year. To put that in context, I am sure that the Minister will be aware of a recent report by the National Audit Office, which found that legal aid lawyers were overpaid to the tune of £25 million last year. It seems absurd therefore that the Government’s first recourse in making savings in the court system is to hammer the user at the expense of equal access to justice when they have clearly failed to explore other areas where money could be saved.
As for the key points in relation to the statutory instruments, they are moving from partial to full cost recovery of court fees in certain sorts of civil litigation. For civil and family work in magistrates courts, cost recovery levels would increase from about 55 per cent. to 100 per cent., which the Government state would raise about £12 million per year. Civil proceedings in the Supreme Court and the county courts would also be moved towards full cost recovery. Similar amendments are to be made to the family courts to keep them in line with civil equivalents and fees payable for the issue of a warrant of execution against goods no longer depend on the amount for which the warrant is issued. It is interesting to note that 27 responded to the Government’s consultation on the issue, but only three agreed with that particular suggestion.
The Government claim that it is wrong for the taxpayer to subsidise civil litigation and that it is right to expect the users of courts to pay the full costs themselves. However, that assumes that the legal system exists only as a private good for the litigators, and we do not support that view. We believe that the legal system is a public good in the resolution of cases in the public interest, the protection of equal access to justice and the development of case law, and that the court fees system should reflect that fact.
What is also unclear is whether the Government’s proposed increases to the thresholds for means-testing of waivers and remissions of court fees will do enough to protect equal access to justice. Hon. Members will have seen from the briefing that fees will be waived, but only below an income of £13,000 for a single person or just less than £35,000 for a couple with four children, so substantial numbers of people, who earn above those sums, will find it difficult to cope with the proposed increases in fees.
Looking at other responses to the Government’s consultation, the majority of respondents had difficulties with the proposals and many questioned the underlying policy of full cost recovery, saying that it might narrow access to justice—19 out of 52 respondents made that point. We agree with several respondents that the principle of full cost recovery in a democratic society is wrong, meaning that people who have legitimate grievances will be unable to obtain justice.
In the summary of the consultation responses, the Government said:
“The general feeling was that the levels of fees being proposed were too high and disproportionate to the service provided”—
something, clearly, that we agree with. However, in their response, the Government went on:
“The underlying fee policy and the need to raise income to meet financial targets were not in question in the consultation paper”,
prompting the question about the point of a consultation if, during that consultation, respondents criticise the proposed changes to Government policy and the Government then state that the policy is not up for discussion. That negates the purpose of having a consultation in the first place.
I hope that I have set out clearly and succinctly why we do not support the provisions and why we thought it was important to debate the matter before the Committee this afternoon. I shall listen carefully to the Minister’s response, but my present view is that we shall be unlikely to support the statutory instruments before us.
4.37 pm
Mr. Henry Bellingham (North-West Norfolk) (Con): It is a pleasure to serve under your chairmanship , Mr. Martlew. I would like to thank the hon. Member for Carshalton and Wallington for his prayer against the statutory instruments, because it gives us a chance to debate them.
The orders are all about fixing the Ministry of Justice’s financial crisis. If we look at the Government’s Red Book, it is perfectly obvious that the 10 per cent. cut in the MOJ budget over the next three years will have a hugely damaging impact on all its services. [Interruption.] I was going to give way to the hon. Member for Birmingham, Yardley, but he was merely giving me encouragement—I am grateful.
The UK’s financial position is truly awful, and it gets worse by the day. The level of debt is now heading up to £1 trillion, nearly 140 per cent. of gross domestic product, while borrowings, from last year’s estimate of £75 billion, are going up to £200 billion. That is why every Department must bear its share in tackling the crisis, which is what the orders are all about.
I am concerned about a number of points in the Family Proceedings Fees (Amendment) Order 2009 and the Civil Proceedings Fees (Amendment) Order 2009. Article 11 of the Family Proceedings Fees Order 2008, which the order before us amended, covers fees paid for the issue of a warrant of execution against goods, but it no longer depends on the amount for which the warrant is executed, which seems somewhat unfair to me. I accept that the existing cost of the service is the same regardless of the amount of the warrant, but the change could have a pernicious effect for those creditors who are using the courts for slightly smaller sums of money. They may well say that it is not worth their while levying the debts through the courts process, which could have a number of unintended consequences, with debts not being paid and recovered. We accept the need for action, but what the Government have put in the orders will not be palatable.
In passing, it is also worth touching on another statutory instrument around at the moment, which the hon. Member for Carshalton and Wallington mentioned. The Costs in Criminal Cases (General) (Amendment) Regulations 2009 (S.I. 2009, No. 2720) breach the well-established tradition in our legal system that someone acquitted in a criminal case will have the costs paid.
The Chairman: Order. That is not under consideration.
Mr. Bellingham: I appreciate that, Mr. Martlew, and I entirely agree. I want only to try and put the orders in context. Not only are we seeing changes made to the civil side of our legal system, but major changes are afoot to the criminal side. That means that users of our courts will have to pay more and more for those services. It is extraordinary that if someone wins a criminal case, they will not be able to recover their costs, except at the legal aid rate.
I have some questions for the Minister. According to the explanatory memorandum, in 2007-08, the court fees covered 78 per cent. of the total cost of the service. The Minister obviously plans to get that figure to 100 per cent., but will she tell the Committee over what period of time and at what rate that will take place? I note that in previous years,
“civil fees in the county courts recovered significantly more than the cost of those proceedings.”
An explanation is required as to why that over-recovery has been eliminated. Is it because the fees have not kept pace with inflation, or can the Minister give us some other explanation? Why were enforcement fees not increased in the last round of civil charge increases?
Some of these increases are very stiff indeed, and there is no question but that they will lead to a number of serious hardships. Let us look, for example, at the increase in the fee for a warrant of execution that is not issued using the county court bulk centre. The figure rises from £35 to £55 up to £100. That is a huge increase—the fee has more than doubled. For an application to set aside a default costs certificate, again, the fee increases from £65 to £100. The figure for an application for service by bailiff of any document in family proceedings rises from £30 to £100.
My concern is about those who are trying to enforce debts in our courts. We have a culture in this country of ever-increasing debt levels. Of course, debtors need protection; it is fair that bailiffs are properly regulated and that debts are enforced in a fair and balanced way. However, if creditors cannot enforce their debts, that will only encourage the debt spiral. I am concerned that for smaller debts, creditors will have a disincentive to go to the courts because of the fees. Perhaps the Minister can comment on that, as we do not want court users to be put off using the courts for that reason.
On the magistrates courts, paragraph 2 of the explanatory memorandum needs clarification. It states that
“the figures for gross annual income and deductions for living expenses...have changed in line with Her Majesty’s Revenue and Customs allowance for working tax credit”.
However, the notes do not tell us whether that change is up or down, and perhaps the Minister will clarify that.
As the hon. Member for Carshalton and Wallington pointed out, cost recovery levels for the magistrates courts will rise from 55 per cent. to 100 per cent. That strikes me as an extremely steep increase. Why did the Government not look at phasing-in that increase over a reasonable period of time? Would that not have been fairer on court users, than going from a 55 per cent. cost recovery level to one of 100 per cent? That seems excessive and hard.
I will not trouble members of the Committee with this, as they can read the explanatory memorandum where they will find examples of steep increases in fees, but one that particularly struck me was the new fee for proceedings under the Council Tax (Administration and Enforcement) Regulations 1992, and similar proceedings under the Child Support Act 1991, regarding an application for a warrant for commitment. The new fee is £240. I appreciate that no fee was previously in place, as this is a new procedure. However, if one looks at similar procedures for similar circumstances, the fee is about £50. The Government are bringing in an exorbitant fee for a process that in the past would probably have cost a fifth of that.
I am concerned at the costs that magistrates courts have to bear. The Minister was a junior Minister when the unified court service was brought in to replace the local magistrates courts committees. The old system may have had many disadvantages but it was quite cost-effective to run. In the past, the magistrates courts service was self-financing and most magistrates courts committees pride themselves on running a tight ship. What analysis has been made of the cost of the extra staff, overheads and new systems that are in place as part of Her Majesty’s Courts Service? Has any comparison been made between the pre-Auld frameworks for magistrates courts and the post-Auld HMCS unified framework that is in place? Ministers would argue that it works well because there is central control but there is a cost to that. Is the magistrates courts order not part of paying the extra cost of increased bureaucracy and staff numbers? I hope the Minister will enlighten the Committee on those extra costs, the burden and whether that is the main driver behind the order.
I do not welcome these statutory instruments, Mr. Martlew, although I am a realist. If one is in Opposition preparing for Government—a luxury that the minor Opposition parties do not have to indulge in—one has to be responsible. I appreciate the pressures that the MOJ budgets are under. The hon. Gentleman made a good point about the overwhelming opposition to these proposals. I find it depressing that the explanatory notes gloss over the consultation process and refer one to the website, Perhaps the Government might look at that practice in future. The explanatory notes are sanitised because that link shows that there was overwhelming opposition to these proposals, not just from individual solicitors and litigants but from every organisation representing lawyers, barristers and other court users up and down the country. The very people whom the Government keep telling us they want to protect and look after will be penalised. Those people who just miss out on the means-testing arrangements and whose income is just above that level will have to pay more. They will be discouraged from using the courts to enforce their rights and sort out their problems. They are being penalised and will pay the price for the Government’s decision to cut the MOJ budget.
I make such remarks with regret, because we are realists and cannot pledge to overturn these arrangements if we win the next election. I am sorry that the Government have not found other ways to make these savings. We would accept a small, gradual increase in these fees, maybe above inflation, over a number of years, but cannot accept increases way, way above the level of inflation. That is why I endorse what was said by the hon. Gentleman.
4.49 pm
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