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The Parliamentary Under-Secretary of State for Justice (Bridget Prentice): It is a pleasure to serve under your chairmanship, Mr. Martlew. I will try to answer all the questions both hon. Gentlemen have put. I understand their concerns. No one likes an increase in fees or to pay more for any service. It is understandable that people were generally quite negative in response to the consultation. Perhaps I can put the orders into context by discussing what options are available for funding the civil courts.
There are probably just four things that could be done to fund the civil and family courts system. One would be to maintain the concept of full cost recovery, whereby those with sufficient means pay the full cost of litigation. Full cost pricing is probably a more accurate term, given the amount of remission that is allowed. Secondly, we could increase the subsidy that is made available through the Ministry of Justice by taking money from the legal aid budget and putting it towards reducing court fees; however, I doubt that that would receive universal support. Thirdly, we could simply slash court services, closing courts and sacking staff over and above any other routine efficiency savings that we might be making. Fourthly, we could increase taxes so that the fees were met by the taxpayer. None of those four options is particularly palatable, but the first one—to maintain full cost recovery when people have sufficient means—is the most palatable.
The changes in the orders are designed to reflect more of the cost of the service provided in our civil courts. They cover proceedings between private parties—for example, one company taking action against another for breach of contract. At the same time, the fee remission system is available to protect access to justice, which, as the Opposition spokesmen rightly say, is an important part of our judicial system. In that way, the less well-off are protected—for example, those on a low income will be able to enforce child maintenance payments, because they will be able to have the fee remitted.
I understand why some people are uneasy about some of the increases, but, as the hon. Member for North-West Norfolk said, we are in difficult economic times. Without the fees, the Courts Service would require a subsidy in the region of £600 million from the public purse, which is not feasible in the current economic climate. There are about 6 million people in receipt of means-tested benefits or tax credits who would be eligible for automatic remission from court fees. Anyone who would suffer financial hardship if required to pay fees could apply for remission based on their income and expenditure—their disposable income—even if they were not on a specified means-tested benefit, or if their income were not below a specific amount.
In protecting access to justice, in 2008-09 the taxpayer, through the Department’s system of fees remission, in effect paid subsidies of more than £23 million for civil and family proceedings in 170,000 instances of remission. Setting fees generally at levels lower than 100 per cent. cost recovery would mean increasing that taxpayer contribution, which in turn would put pressure on other budgets, such as legal aid.
Public expenditure is obviously a matter of policy for the Government. What the state provides free or at a charge is determined by the terms and priorities of the allocation of the scarce public resources. We recognise that citizens in a democracy under the rule of law have a constitutional right to accessible court systems; however, it is not a constitutional right to have free access. We simply need to ensure that people who cannot afford to pay are protected.
A number of the changes relate to applications to enforce judgments that have already been made in debt claims between private parties and which are recoverable from judgment debtors who can, but will not, pay their debts. The hon. Member for North-West Norfolk made the important point that creditors should be able to recover their debts. At the same time, we have put in place a number of systems that will protect those who are finding it difficult to pay their debts—for example, the mortgage pre-action protocol and other debt management plans that will help people through this turbulent economic time.
The fee for sending a bailiff to collect a debt or to seize a debtor’s goods rises to £100 from £35—the hon. Member for North-West Norfolk mentioned the other fee of £55. The creditor will pay that fee, but it is automatically added to the debt. We believe that creditors should be discouraged from taking enforcement action against vulnerable debtors who genuinely cannot afford to pay. Charging the true cost of enforcement processes will mean that creditors consider carefully whether to pursue the debt in that way and will look at alternatives. Fees are automatically waived for people on means-tested benefits, such as income support, or on low incomes—for example, fees will be waived for a single person earning £13,000 or less. People who do not meet either of those criteria can still apply to the court for a full or partial fee waiver based on an assessment of their disposable income, which will take account of rent and other key household expenditure.
Before the increases, there was a large general subsidy from the taxpayer for some areas of court business from which all court users in those areas benefited, regardless of their ability to pay. For example, in magistrates courts, civil fees covered only 55 per cent. of the cost of the work. Fees for enforcement processes in particular did not reflect the full cost of the process, so they were, in effect, subsidised by fees paid in cases in which enforcement was not required, which was unfair to the creditors and debtors.
Of course we are keen that those who can but will not pay their debts are pursued effectively through the courts. We are also keen to help people with debt problems to avoid court in the first place. The legal process provides ample opportunity before and during court proceedings for debtors to come to payment agreements with those to whom they owe money. Equally, creditors should be discouraged from taking enforcement measures against vulnerable debtors who genuinely cannot afford to pay. Charging the true full cost of enforcement processes—for example, warrants or charging orders—will encourage creditors to think more carefully before choosing to resolve cases through the courts. When they do so, it is right that they should pay for the service. The key changes help those in financial difficulties by discouraging inappropriate or premature enforcement action against them.
The hon. Member for Carshalton and Wallington asked what the point of consultation was if the policy was not up for discussion. In fact, the policy was up for discussion and we made changes as a result of the consultation—for example, instead of the proposed single fee in the magistrates courts, we introduced two stages: one at the point of application and one if the case was contested. He also asked about the single fee for warrants. I understand what he is getting at, but the problem is that the process is the same, regardless of the amount that the warrant might be issued for.
The orders must also be seen in the context of the long-term strategy of reviewing and reforming the court fees system. Our key objectives are to ensure that the system meets the cost recovery targets set for civil, family and probate business, protects access to justice through a well targeted system of remissions and ensures that the taxpayers’ contribution to the system’s cost remains affordable. I welcome the debate because it is important to look at such matters in detail.
The hon. Member for North-West Norfolk asked whether the rates allowed in remission applications have increased or decreased. They have increased in line with those applied by other Government Departments. The hon. Member for Carshalton and Wallington made an important point about the overpayment of legal aid fees to solicitors last year. I assure him that the Legal Services Commission is taking robust action in recovering those fees.
I understand that this is a difficult matter. We are well aware that we need to ensure that an appropriate balance is struck between financial sustainability and access to justice; however, it is right that those who use the civil courts to resolve private disputes make some contribution to the cost of the service, according to their ability to pay.
Mr. Edward Timpson (Crewe and Nantwich) (Con): The Minister talks about proportionality of access to justice and the financial ability to access justice. That is the backdrop to the orders. Under the magistrates courts fees order, a flat fee is proposed for other civil proceedings and committal proceedings, which assumes that debtors will go through each stage of all processes within any one case, whereas before there was a separate fee on each occasion. Does she think that is proportionate, or is it disproportionate in cases where not every stage of the processes is gone through?
Bridget Prentice: I think it is proportionate. We made those changes as a result of the consultation in order to give people, whether creditors or debtors, the opportunity at each stage to think about whether they wanted to continue in the action that they were taking. Often, debtors will feel that, having got to that stage, it would be appropriate to pay. I am very conscious of the fact that, in some cases, the creditor may well also be at the margins financially. That is why remissions are so important. The principle still applies: debts should be paid. We want to ensure that creditors are not put in difficulty. Many creditors have larger pockets than others and can sustain themselves during these processes, but we are conscious of those who do not.
I hope that my final remarks will give some comfort to the Opposition Members. Although we think that the provisions strike a proper balance, I am keeping the matter under review and I will assess their appropriateness in the light of everyday experience. I am not saying that this is the end of the matter. For the moment, however, I think we have struck the right balance. I ask the hon. Member for Carshalton and Wallington not to press his objection.
5.2 pm
John Hemming (Birmingham, Yardley) (LD): I declare my interest as chair of Justice for Families, a network of advisers who work mainly in the family courts, but also in other courts, as McKenzie friends. When one watches what goes on, one sees all sorts of problems with access to justice. In essence, the orders are all about access to justice. To that extent, we should not be too worried about how much the local council has to pay to get somebody sent to jail, because the local council has a lot of resources. We should be concerned about individual access to justice.
The Magna Carta of 1215 states in clause 40:
“To no one will we sell, to no one deny or delay right or justice.”
That is not in force now, but the Magna Carta of 1297 is—well, only three clauses are. Clause 29 states:
“We will sell to no man, we will not deny or defer to any man either Justice or Right.”
I presume that that includes women, it being written a long, long time ago.
The essence of my point is that we are now proposing to sell justice to people and make a profit out of it, because the objective behind full cost recovery is to charge so much in cases where there is no fee remission that we make enough profit to pay for fee remission. I do not have a particular problem with the council paying more money, but there is a serious problem with regard to individuals facing the justice system. We talk about public good. The rule of law is a public good, to the extent that it affects those people who do not go to court because, hopefully, they follow the rule of law, as well as those who do go to court. If people feel that justice in this country is only available to people on benefits and those with lots of money, we are cutting out a lot of people from the rule of law. Whether it is lawful for a statutory instrument to change clause 29 of the 1297 Magna Carta is a question that someone else should look at.
The Chairman: Order. I am not qualified to do that.
John Hemming: The courts could look at that at a later stage, when people try to charge the fees. I checked the statute law database and the clause was in force a few minutes ago. It has not been repealed as yet. I presume that the doctrine of implied repeal does not apply to secondary legislation, whereas it does apply to primary legislation. However, underlying all that is the principle for which my hon. Friend the Member for Carshalton and Wallington argued: the matter is not one to be dealt with quickly in a statutory instrument Committee. The fundamental point is that it is wrong to do so, regardless of whether it is lawful or not. The issues are complex. There are circumstances, such as charging the council more to get somebody locked up, to which I do not object, because that is one arm of the state against another. However, I am worried that we are gradually squeezing people out of justice in this country, to the extent that it is only available to the wealthy and those with very little resources.
5.5 pm
Tom Brake: I seek guidance from you, Mr. Martlew, on where we go from here. I have stated that we object to the order, and I assume that I am now summing up, and responding to the Minister’s comments.
The Chairman: Obviously, if the Minister feels the need to respond, she can. Members can speak as many times as they wish.
Tom Brake: The Minister has stated that the statutory instrument will ensure that those who cannot afford to pay are protected; the Government are well aware of the need to do that. However, she has not reassured me that that is what will happen. I welcome the fact that she is trying to secure savings in other areas, in relation to the £25 million overpaid to legal aid lawyers. I also congratulate my hon. Friend the Member for Birmingham, Yardley, on citing the Magna Carta and on giving his experience of family courts, which are an area of concern. There are particular concerns about the way in which their fees are to increase and about the impact that that could have on vulnerable children. In conclusion, I have listened carefully to what the Minister said, and I understand that she will keep the matter under review. However, we remain concerned that the statutory instrument will in fact reduce access to justice. I would therefore like to vote against it.
Question put.
The Committee divided: Ayes 7, Noes 4.
Division No. 1]
Hall, Mr. Mike
Jones, Helen
Moon, Mrs. Madeleine
Prentice, Bridget
Smith, Jacqui
Vis, Dr. Rudi
Watson, Mr. Tom
Bellingham, Mr. Henry
Brake, Tom
Hemming, John
Timpson, Mr. Edward
Question accordingly agreed to.
That the Committee has considered the Family Proceedings Fees (Amendment) Order 2009 (S.I. 2009, No. 1499).

civil proceedings fees (amendment) order 2009

That the Committee has considered the Civil Proceedings Fees (Amendment) Order 2009 (S.I. 2009 No. 1498).—(Tom Brake.)

magistrates’ courts fees (amendment) order 2009

That the Committee has considered the Magistrates’ Courts Fees (Amendment) Order 2009 (S.I. 2009, No. 1496).—(Tom Brake.)
5.9 pm
Committee rose.
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