2Changes to courts and tribunals fees
Changes considered in this Report
Employment tribunal fees
8.Following a consultation which took place from December 2011 to March 2012, the Government introduced employment tribunal fees in July 2013.5 For the purposes of fees, employment tribunal claims are divided into ‘Type A’ and ‘Type B’ claims.6 Type B claims attract higher fees because they are, generally speaking, more complex and consuming of tribunal resources than Type A claims. Fees are also higher for claims involving more than one claimant. While there are a number of fees payable during employment tribunal proceedings, including for appeals, the fees which have been the subject of most controversy are the issue and hearing fees for single claims. The following table sets out the fee levels for single employment tribunal claims:
|
Type of fee |
Type A claims |
Type B claims |
|
Issue fee |
£160 |
£250 |
|
Hearing fee |
£230 |
£950 |
|
Total fees (issue fee + hearing fee) |
£390 |
£1,200 |
9.Employment tribunals have been a reserved matter and the fees have applied in Scotland since their introduction. In September 2015 the Scottish Government announced that it would abolish the fees following the transfer of the tribunals to the Scottish Courts and Tribunals Service in accordance with the provisions of the then Scotland Bill (now section 39 of the Scotland Act 2016).
Civil and family courts and other tribunals
10.The wider programme of changes to court fees in England and Wales which is also considered in this Report began when the Ministry of Justice launched a two-part consultation which ran from 3 December 2013 to 21 January 2014.7 The consultation document noted that fees had been charged to court users in the civil, family and probate divisions for a number of years, and that, although the Government had a policy of seeking full cost-recovery through fees, this was not being achieved. The Government’s December 2013 proposals were intended to achieve close to full cost-recovery by charging fees reflecting, or in some cases exceeding, costs incurred for those who could afford them, while maintaining the principle of access to justice through a system of fee remission. To that end, one part of the consultation concerned setting fees in civil proceedings to meet the cost of the proceedings to which they relate (cost-recovery). The second part of the consultation concerned the introduction of fees exceeding the cost of the proceedings to which they relate (enhanced fees). The Government published its response to the first part of the consultation in April 2014. The response confirmed both the introduction of various new court fees and increases to some existing fees. These new fees came into force on 22 April 2014. 8
Enhanced fees
11.A basic principle set out in the HM Treasury handbook, Managing Public Money,9 is that fees for public services should be set at a level to recover the full cost of the service, and no more. However, under section 180 of the Anti-social Behaviour, Crime and Policing Act 2014 (“the 2014 Act”), the Lord Chancellor may, with the consent of the Treasury, set fees under certain enactments at a level greater than the expected costs of the proceedings to which fees relate. The enactments concerned are: section 92 of the Courts Act 2003 (senior courts, county courts and magistrates’ courts fees), under which the Lord Chancellor must have regard to the principle that access to the courts is not denied; section 54 of the Mental Capacity Act 2005 (Court of Protection fees); section 58(4)(b) of the Mental Capacity Act 2005 (Public Guardian fees); and section 42 of the Tribunals, Courts and Enforcement Act 2007 (tribunal fees).
12.Section 180 of the 2014 Act states that when setting enhanced fees, the Lord Chancellor must have regard to:
- the financial position of the courts and tribunals for which the Lord Chancellor is responsible, including in particular any costs incurred by those courts and tribunals that are not being met by current fee income, and
- the competitiveness of the legal services market.
Section 180(6) says that enhanced fees must be used to finance an efficient and effective system of courts and tribunals: they may therefore entail cross-subsidisation within HMCTS, with a proportion of fees paid by users of certain courts going to meet the costs of operating others.
13.Section 180 was not in the Anti-social Behaviour, Crime and Policing Bill as introduced in the Commons, although the Bill did have a “placeholder” clause on court and tribunal fees and Government declared in the Explanatory Notes accompanying the Bill:
The Ministry of Justice is considering the detailed mechanism by which court and tribunal fees may be set beyond full cost-recovery and therefore at a level which exceeds the cost of the activities for which the fees are charged. Clause 136 is designed as a placeholder to allow the Lord Chancellor to bring forward substantive provisions by amendment in the light of this further work.10
The provision was contained in a New Clause (NC 28) tabled by the government for report stage in the Commons, and added without debate. The clause was debated in the Lords at committee stage on an amendment moved by Lord Beecham.11
14.As noted above, the second part of the Ministry’s 2013 consultation on court fee reform concerned enhanced fees for some court proceedings. The proposals included enhanced fees for money claims over £10,000, increasing the fee for divorce proceedings to £750 and enhanced fees for commercial proceedings. The Government published its response to the second part of the consultation in January 2015,12 confirming it would not go ahead with the proposals for increased fees for divorce or commercial proceedings but would proceed with the proposal for enhanced fees for money claims over £10,000. The Government response also put forward for consultation proposals for increases in fees for possession claims and for general applications in civil proceedings.
15.The power to set enhanced fees was used in March 2015 in relation to money claims.13 The fee-band system for claims between £10,000 and £200,000 was replaced by a fee set at 5% of the value being claimed (4.5% for claims initiated online.) For claims greater than £200,000, or where the sum is not limited, the fee is capped at £10,000. The following table shows the old and new fees for claims worth £10,000 or more:
|
Claim value |
Old fee |
New fee (since 9 March 2015) |
|
£10,000-£15,000 |
£455 |
5% of the value (£500-750) |
|
£15,000-£50,000 |
£610 |
5% of the value (£750-2,500) |
|
£50,000-£100,000 |
£910 |
5% of the value (£2,500-5,000) |
|
£100,000-£150,000 |
£1,115 |
5% of the value (£5,000-7,500) |
|
£150,000-£200,000 |
£1,315 |
5% of the value (£7,500-10,000) |
|
£200,000-£250,000 |
£1,515 |
£10,000 |
|
£250,000-£300,000 |
£1,720 |
£10,000 |
|
>£300,000 |
£1,920 |
£10,000 |
16.The Ministry of Justice concedes that, for the types of cases affected, there was a significant increase in the volume of claims issued in the period before the fee increases, followed by a significant fall after their introduction. In oral evidence Shailesh Vara MP, the Minister for Courts and Legal Aid, said that the significant dip in the number of cases brought after the introduction of the fee had subsequently risen, but it was not back to the level it was before.14 The Ministry argued in its written evidence that not enough time had passed to draw conclusions about any long-term effects on case volumes.15
17.In July 2015, through Cm. 9124, the Ministry confirmed the following fee increases would be introduced:
|
Claim |
Current fee |
Fee to be introduced |
|
Possession claim (County Court) |
280 250 (initiated online) |
355 325 (initiated online) |
|
General application in civil proceeding (by consent or without notice) |
50 |
100 |
|
General application in civil proceeding (contested) |
155 |
255 |
|
Divorce proceedings |
410 |
550 |
18.Following approval by both Houses of Parliament of the relevant secondary legislation, the increases came into force on 21 March 2016. The same legislation also increased fees for judicial review claims in the Immigration and Asylum Chamber of the Upper Tribunal.
19.The decision to increase the fee for a divorce petition to £550 represented a partial reversal of the January 2015 announcement that the Government would not proceed with the proposed increase from £410 to £750. It should be noted that the £410 fee already represented an enhanced fee for such proceedings, the cost of which is estimated to average £270 for an uncontested divorce.16
Further proposals in Cm. 9124, July 2015
20.Cm. 9124 consulted on other proposals for further fee increases. These included: an increase in the cap on fees for money claims from £10,000 to £20,000; a general 10% uplift in civil fees (excluding those already set at enhanced levels); and the introduction or modification of fees across the First-tier tribunal and Upper Tribunal.
Money claims
21.The proposals concerning fees for money claims included, at a minimum, increasing the cap on money claims to £20,000, but the Government also asked for views on whether the cap should be higher, or should be removed altogether. The Government proposed to exempt personal injury claims from these increases, so the maximum fee a personal injury claim could attract would remain at £10,000. It also proposed that the disposable capital test for the fee remission system should be increased so the threshold for a fee of £10,000 would be £20,000 and for a fee of £20,000 the threshold would be £25,000.17 In the event, in its December 2015 response to the consultation, Cm. 9181, the Government announced that it would not be raising the cap on fees for money claims “at this time”. In making this decision, the Government cited the case made by respondents that insufficient time had passed since the fee increases in March 2015. The Government did state that it would not rule out returning to the proposal, once more time had passed to properly assess the introduction of the 5% fee with a £10,000 cap. 18
General 10% uplift in civil fees
22.The proposals in Cm. 9124 also included a general uplift of 10% to other fees for civil proceedings that are set at or below cost recovery levels. The fees would affect:
- judicial review proceedings
- proceedings for the assessment of costs
- enforcement proceedings
- all civil proceedings in the High Court, County Court and Magistrates’ Court and fees in the Court of Appeal (Civil Division).
The specific proceedings affected by this set of proposals were set out in a lengthy annex to the Command Paper.19 The fees for Court of Appeal proceedings are expected to still be well below cost, which is estimated by the Ministry of Justice to be around £10,000.
Tribunals
23.Cm. 9124 in July 2015 also included further proposals for fees in tribunals.20 Specifically, these proposals were for the introduction or modification of fees in the Property Chamber, General Regulatory Chamber, Tax Chamber and Immigration and Asylum Chamber of the First-tier Tribunal and Tax and Chancery Chamber, Immigration and Asylum Chamber and Land Chamber (Upper Tribunal).
Immigration and Asylum Chamber (First-tier and Upper Tribunal)
24.In Cm. 912421 the Ministry proposed increases to fees payable to bring an appeal to the Immigration and Asylum Chamber of the First-tier Tribunal. The proposal was to double the fees for application to the Immigration and Asylum Chamber of the First-tier Tribunal. It was further proposed that applications submitted online would benefit from a 10% discount. The initial introduction of fees in the Chamber had been intended to achieve cost recovery of 25% but, according to the Government’s consultation, it had only succeeded in recouping 11%. The increases proposed in Cm. 9124, as set out in the table below were intended to bring about the original intention of 25% recovery.22
|
Application Type |
Current fee |
Proposed fee |
|
Application for paper determination |
£80 |
£160 |
|
Application for oral hearing |
£140 |
£280 |
|
Application for paper determination (submitted online) |
£80 |
£140 |
|
Application for oral hearing (submitted online) |
£140 |
£250 |
25.In December 2015 the Government announced its intention to proceed with all these increases; then in April 2016 it published a further consultation, Cm. 9261, with a deadline of 3 June 2016.23 In this consultation document the Government said that it had “reconsidered its decision” to proceed with a proposal to achieve 25% cost recovery; it no longer thought it reasonable to expect the taxpayer to contribute 75% of the cost of the First-tier Tribunal and it was proposing to move to full cost-recovery. The proposed increases are now of the order of 600%:
- Application for a decision on the papers, from £80 to £490
- Application for an oral hearing, from £140 to £800.
There will no longer be a reduction of 10% for online applications: the consultation paper explains that, given the financial imperative to deliver additional income to fund the First-tier Tribunal, “we do not believe that differential pricing as a means to incentivise behaviour continues to be justified”.24 A new fee of £455 is proposed for an application to the First-tier Tribunal for permission to appeal to the Upper Tribunal, and fees are to be introduced in the Upper Tribunal at full-cost recovery levels: a fee of £350 for an application for permission to appeal where such an application has been refused by the First-tier Tribunal, and a fee of £510 for an appeal hearing.
Property, Tax and General Regulatory Chambers (First-tier Tribunal), and Tax and Chancery Chamber and Lands Chamber (Upper Tribunal)
26.The Government proposed the introduction or increasing of fees for the Property, Tax and General Regulatory Chambers of the First-tier Tribunal and the Tax and Chancery Chamber of the Upper Tribunal. The General Regulatory Chamber hears appeals against decisions made by various Government regulatory bodies (for example, they hear appeals against the Information Commissioner’s Office about decisions on freedom of information.) The Upper Tribunal of the Lands Chamber is subject to the general 10% uplift in fees and the proposed changes are detailed on pages 35 and 36 of the Command Paper.
Government response to consultation in Cm. 9124
27.Except for the changes to the proposals specified in the following table, all fees proposed in Cm. 9124 were confirmed by the Government’s response to the consultation, Cm. 9181.
|
Proposal (Cm 9124) |
Decision announced (Cm 9181) |
|
Civil money claims - Increase the cap on civil money claims from £10,000 to “at least £20,000” |
The cap on money claims will remain at £10,000 |
|
General Regulatory Chamber (First-tier Tribunal) - All proceedings in the General Regulatory Chamber of the First-tier Tribunal to be subject to an issuing fee of £100. Electing for an oral hearing would incur a further fee of £500. (Excludes fees for gambling cases). |
Fees for cases brought against the Information Commissioner (freedom of information) are to be exempt from fees pending the outcome of the review of the cross-party Commission. All other cases in the Chamber are to be subject to the fees consulted on. |
|
Property Chamber (First-tier Tribunal)–All proceedings except leasehold enfranchisement to be subject to an issuing fee of £100 and a hearing fee of £200. Proceedings for leasehold enfranchisement to be subject to an issuing fee of £400 and a hearing fee of £2,000 |
Proposal confirmed, except all rent and park home pitch fee application cases are to be subject to a single fee of £20, and proceedings for leasehold enfranchisement to be subject to an issue fee of £100 and a hearing fee of £200, as for other proceedings. |
|
Tax Chamber (First-tier Tribunal)–The following fees to be introduced: Issue fees: Paper and basic cases - £50 Standard and complex - £200 Hearing fees: Basic - £200 Standard - £500 Complex - £1,000 |
Proposal confirmed, but in the case of appeals against fixed penalty notices of £100 or less, there is to be a fee of £20. |
Freedom of information
28.Given that the Government’s decision in December 2015 was not to impose fees for bringing freedom of information cases in the Regulatory Chamber pending the outcome of the review of the Independent Commission on Freedom of Information, it is worth noting that the report of that Commission did not explicitly address the question of whether fees should be introduced for such cases. The Commission did, however, express the view that there was an abundance of bodies effectively hearing appeals (the public authority subject to the original request, the Information Commissioner, and then the First-tier Tribunal) and said that “considerable resources and judicial time are being taken up by unmeritorious appeals”. It recommended that legislation should be introduced to remove the right of appeal to the First-tier Tribunal against an Information Commissioner decision (a right of appeal to the Upper Tribunal would remain on a point of law).25 This recommendation is under consideration by the Government. We see no reason to disagree with the Commission’s view.
Fee remission
Standard fee remission system
29.The cornerstone of efforts to mitigate the impact of courts and tribunal fees on access to justice is fee remission. A standard fee remission system for claimants in civil court and tribunal proceedings was introduced in October 2013, except in the Immigration and Asylum Chamber, which operates a different system (see paras 33 and 34 below). Fee remission is only available to individuals, including those who conduct their business as sole traders. It is not available to companies, charities or other organisations. Claimants must submit separate applications for remission of each fee, and to be successful, they must first pass the disposable capital test and then the gross monthly income test in respect of each fee. It is worth noting that this has the effect in accordance with the table below, that the disposable capital threshold for remission for a person paying an issue and hearing fee for an employment tribunal is £3,000, not £4,000 as it would be if the two fees were considered as one.
30.The relevant secondary legislation defines disposable capital as the value of every resource of a capital nature, such as savings, belonging to a claimant and (if applicable) their partner on the date the application is made. If an applicant exceeds the threshold, they are not entitled to any remission. The following table shows the thresholds for the disposable capital test relating to each level of fee:
|
Court or tribunal fee is: |
Disposable capital threshold: |
|
Up to £1,000 |
£3,000 |
|
Between £1,001 - £1,335 |
£4,000 |
|
Between £1,336 - £1,665 |
£5,000 |
|
Between £1,666 - £2,000 |
£6,000 |
|
Between £2,001 - £2,330 |
£7,000 |
|
Between £2,331 - £4,000 |
£8,000 |
|
Between £4,001 - £5,000 |
£10,000 |
|
Between £5,001 - £6,000 |
£12,000 |
|
Between £6,001 - £7,000 |
£14,000 |
|
£7,001 or over |
£16,000 |
31.If successful under the disposable capital test, the applicant must then also qualify for remission under the gross monthly income test. An applicant, assuming they are successful under the first test, is entitled to full remission if they receive any of the following means-tested benefits: Income-based Jobseeker’s Allowance; Income-related Employment and Support Allowance; Income Support; Universal Credit with gross annual earnings of less than £6,000; State Pension Credit guarantee credit; Scottish Civil Legal Aid (not Advice and Assistance or Advice by Way of Representation). They are also entitled to full fee remission if they and their partner’s gross monthly income is below the amount set out in the table below:
|
Gross monthly income with: |
Single |
Couple |
|
No Children |
£1,085 |
£1,245 |
|
One Child |
£1,330 |
£1,490 |
|
Two Children |
£1,575 |
£1,735 |
|
£245 for every additional child |
||
If the applicant does not meet these thresholds, they may still be entitled to partial fee remission if they are within the following thresholds:
|
Gross monthly income with: |
Single |
Couple |
|
No Children |
£5,085 |
£5,245 |
|
One Child |
£5,330 |
£5,490 |
|
Two Children |
£5,575 |
£5,735 |
|
£245 for each additional child |
||
32.In response to criticism concerning the complexity of the fee remission system, the Ministry of Justice changed the application procedure. It is now known as “help with fees” (“fee remission” was seen as too technical and unclear for the general public). The thresholds are the same as before, but the process has been simplified for people to apply for remission. The changes include simplifying the application form, simplifying the guidance accompanying the form, and no longer requiring applicants to send proof of income or benefits for their application. HMCTS will instead check directly with the Department of Work and Pensions as to whether an applicant is on qualifying benefits, or if their income qualifies them for remission. Some applicants may, however, need to send proof.
Immigration and Asylum Chamber fee remission
33.The standard fee remission system is not applicable to the Immigration and Asylum Chamber. Rather, the system provides for fee waivers for certain types of appeal and exemptions for individuals meeting certain financial criteria, as well as a power for the Lord Chancellor to remit fees in exceptional circumstances where their payment would cause undue financial or other hardship. Waivers apply to appeals concerning deprivation of citizenship and decisions to remove an EEA national or an EEA national’s family member. In December 2015 the Government said it would add a new exemption for appeals against the revocation of refugee or humanitarian protection status. For other cases, remission of fees may take place if the applicant is being provided with asylum support funding by the Home Office; is in receipt of legal aid; or is being provided with support by a local authority under section 17 of the Children Act 1989. The Ministry told us that in the period April to September 2015 41,000 appeals were lodged with the tribunal, and 5,600 fee remissions granted, either under the financial criteria or the Lord Chancellor’s power. The Ministry said that 445 out of 452 appellants recorded as being unrepresented who potentially met the financial criteria for remission or who applied for the Lord Chancellor to remit the fees received a remission.26
34.The Government’s current consultation on increasing fees in the Immigration and Asylum Chamber27 repeats the commitment it has given to establish an exemption for appeals against revocation of refugee or humanitarian protection status; and also repeats its intention to extend exemption from fees to parents of children receiving support under s.17 of the Children Act 1989, and to children being housed by a local authority under s.20 of that Act. In addition, the Government proposes to add an exemption for people appealing against a refusal to grant a visa who have already been assessed by the Home Office as being unable to pay the original visa application fees. The Government is also seeking views as part of its consultation on alternative approaches for fee exemptions for those who may be unable to pay the increased fees.28
7 Court fees: proposals for reform, Cm.8751, December 2013
8 Through The Civil Proceedings Fees (Amendment) Order 2014, The Family Proceedings Fees (Amendment) Order 2014, The Magistrates’ Courts Fees (Amendment) Order 2014, and The Non-Contentious Probate Fees (Amendment) Order 2014
9 Managing Public Money, HM Treasury, 2015
10 Explanatory Notes to the Anti-Social Behaviour, Crime and Policing Bill, Bill 7-EN, 2013-14, para 82
11 HL Deb 11 December 2013 cols 862-866
12 Enhanced Court Fees: The Government Response to Part 2 of the Consultation on Reform of Court Fees and Further Proposals for Consultation, Cm. 8971, January 2015
14 Q416
16 Court Fees: Proposals for reform Cm 8751, para 188. In evidence Resolution gave a figure of £270 as at January 2015 (FEE 0031, para 5).
17 See para 31 below for explanation of the disposable capital definitions and levels
18 The Government response to consultation on further fees proposals, Cm. 9181, December 2015
19 Annex C, page 43
20 The Tribunal, Courts and Enforcement Act 2007 established a two-tier tribunal system: a First-tier Tribunal and an Upper Tribunal.Both of these tribunals are comprised of several Chambers with similar jurisdictions. The primary work of the Upper Tribunal is the review and deciding of appeals from the First-tier Tribunal. The Chambers in the First-tier Tribunal are: General Regulatory Chamber; Social Entitlement Chamber; Health, Education and Social Care Chamber; Tax Chamber; War Pensions and Armed Forces Compensation Chamber; Immigration and Asylum Chamber; and the Property Chamber. The Upper Tribunal comprises the Administrative Appeals Chamber; Tax and Chancery Chamber; Lands Chamber; and the Immigration and Asylum Chamber. The Employment Tribunal and Employment Appeal Tribunal are separate.
22 Court and Tribunal Fees; The Government response to consultation on further fees proposals, Cm 9181
23 Tribunal Fees: Consultation on proposals for the First-tier Tribunal (Immigration and Asylum Chamber) and Upper Tribunal (Immigration and Asylum Chamber), Cm. 9261, April 2016
25 Independent Commission on Freedom of Information Report, March 2016, Recommendation 17
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16 June 2016