93.In the preceding sections of this Report we have made certain recommendations about the quantum of fees applicable in respect of certain cases. We think it is important those recommendations are adopted if very significant concerns about access to justice as raised with us are to be allayed. Equally important, however, is a general fee structure and fee remission system which does not exclude a significant proportion of people from the realistic possibility of defending or enforcing their legal rights through the courts. In this final Chapter, therefore, we consider other proposals which have been put to us for changes to the structure of payment of fees, and fee remission, which could be adopted in the courts and tribunals system. The Ministry has argued that other safeguards for access to justice are available for claimants, particularly conditional fee agreements and after the event insurance. We found minimal agreement in other evidence we received that these were substantive safeguards. Conditional fee agreements are not applicable in tribunals.
94.Each court or tribunal fee, where no exemption or partial exemption applies, is payable in full and up-front. One suggestion put forward to alleviate the deterrent effect of fees was to enable them to be met in a series of staged payments throughout the course of a case. Alice Hardy, representing the Police Action Lawyers Group, said that the new fee system for civil litigation had front-loaded the payment of fees to the issue stage; and Sarah Crowther, a barrister on the South Eastern Circuit, thought that a staged fee structure would mitigate the impact of fees for the majority of cases, and would chime with an approach to encourage early settlement. Both the Master of the Rolls and the President of the Family Division, however, expressed doubts. Lord Dyson, perhaps surprisingly, was concerned that if meritorious claims were not deterred but then reached settlement without going to court, under a staged fee structure there would be a reduction in fee income for the Ministry, though he agreed that it would be better from a justice point of view. Lord Dyson also saw administrative difficulties and costs in a staged payment system. Sir James Munby saw “very real conceptual problems and practical problems in translating the seemingly rather attractive idea of staged payments into a system that reflects what you are trying to do.” One difficulty would be if the court had been set up to deal with the next stage of a case and the fee had not been paid, which could generate “a vast amount of satellite litigation.”
95.Sir Ernest Ryder told us that the perspective from tribunals was different, because most litigants had cash-flow problems, “so there is a general acceptance that the graduated or sequential fee is better”, but even then there were adverse behavioural consequences in that respondents tended not to engage in conciliation in order to push claimants into paying the next fee. His solution to that was to adopt the Scottish civil justice model of requiring a respondent’s fee to be paid, alongside sequential fees: this would “make the playing field more level and place a risk on both parties”. We can see distinct attractions in a system in which there is a graduated or sequential schedule of fee payments whenever there are substantial fees payable in total in respect of a case in the civil or family courts or tribunals, allied with a requirement for the respondent to pay a fee, but we do not feel that we have sufficient evidence to recommend adoption of such a system. We do however recommend that a pilot scheme take place to enable an evaluation to take place of such a system.
96.We have described in paragraphs 33 and 34 above the separate system for exemption from fees which pertains in the Immigration and Asylum Chamber. The Ministry say that historically this has been “as a result of the difficulty in assessing the income of individuals who may be based outside the United Kingdom in many cases”. This argument was contested in our inquiry. Carita Thomas of ILPA said these things could be got round: and when she was making a legal aid application she had to evidence income which people had overseas. For her as a legal representative it was still not clear how the fee remission system was meant to work; and it was “completely unfair”, especially when many exceptional circumstances cases were human rights cases. In principle it must be right as far as possible that the fee remission system across the courts and tribunals is standardised, but we recognize the real difficulties which can apply in immigration and asylum cases. We do not have sufficient evidence to come to a firm conclusion, but it is important that the matter should be reviewed, to ensure a proper balance between the desirability of a standardised system and the difficulties this could cause in immigration and asylum cases.
97.We have already expressed our view that the fee remission thresholds for employment tribunal claimants are too low, both in relation to disposable capital assets and monthly income, and recommended that they be approximately doubled. Outside the area of employment tribunals we received less copious evidence. We asked the Law Society for their views on whether the threshold should be increased, and they told us that
Even before the most recent fee increases, the fee remission system was overly complicated and the eligibility cut-off threshold set too low. Following the substantial fee increases in 2015, the fee remission arrangements have become still less fit for purpose.
The Law Society called for the Ministry to introduce a system for regular rerating of remission thresholds to take account of inflation, and to conduct a further review of the affordability of civil court fees and the remission system, considering means of simplification, for example through automatic remission for all basic rate taxpayers. We recommend that the Ministry adopt the Law Society’s suggestion as a matter of urgency.
122 para 37
16 June 2016