Courts and tribunals fees Contents

Conclusions and recommendations

Freedom of information

1.We see no reason to disagree with the view of the Independent Commission on Freedom of Information that legislation should be introduced to remove the right of appeal to the First-tier Tribunal against an Information Commissioner decision. (Paragraph 28)

The principle of fees

2.In this Report we are concerned with the principles behind the Government’s policies as well as the practical effects of those policies. Before we look in more detail at those practical effects, we set out here the broad position from which we approach the main questions of principle. First, although it is a legitimate position to object to any court fees being charged to litigants, that is not a position we share. Some degree of financial risk is an important discipline for those contemplating legal action, and a contribution by users of the courts to the costs of operating those courts is not objectionable in principle: the question is what is an acceptable amount to charge taking into account the need to preserve access to justice. The answer to that question will vary from jurisdiction to jurisdiction, and between different types of case. Factors which need to be taken into account include the effectiveness of fee remission, the vulnerability of claimants and their means in comparison with respondents—which may pose particular problems of inequality of arms when individuals or small businesses are seeking to uphold their rights against the state or major companies—and the degree of choice which litigants have in whether to use the courts to resolve their cases and achieve justice. There should be a clear and justifiable relationship in the courts and tribunal fee system between these factors and the degree of financial risk, through the size of fee, that litigants should be asked to bear. (Paragraph 45)

3.We recognize that the principles of cost-recovery and of enhanced fees have been accorded statutory authority by Parliament. There is no doubt that Ministers are empowered, subject to parliamentary approval of the necessary delegated legislation, and subject to other provisions in the relevant primary legislation, to introduce such fees for litigants. However, the introduction of fees set at a level to recover or exceed the full cost of operation of the court requires particular care and strong justification. Where there is conflict between the objectives of achieving cost-recovery and preserving access to justice, the latter objective must prevail. (Paragraph 46)

Evidence base

4.The Minister’s wish to defend the quality of the Ministry’s research is understandable, but we share the view expressed by the senior judiciary and some others who gave evidence to us that the research which was conducted as part of the formulation of the Ministry’s proposals in relation to courts and tribunals fees provides an insufficient basis to justify the Ministry’s proposals. That does not mean that those proposals are unjustifiable; nor does it mean that we are heedless of the financial pressures on Ministers in a Department with unprotected spending. We understand that the Ministry does not always have the luxury to be as rigorous and meticulous in preparing the ground for controversial policies as it might wish. But we do consider it important that in such circumstances the Ministry is frank about that fact and does not represent the quality of its evidence base to be higher than it is (Paragraph 50)

The impact of fees: employment tribunals

5.It will be evident from the chronology in paragraphs 55 to 57 that there are some inconsistencies in the Government’s account of the progress of its review into the impact of employment tribunal fees. It is difficult to see how a Minister can urge his officials to progress a review which they apparently submitted to him 4 months or more previously. And even if Ministers may now be discussing how to proceed on the basis of the review’s findings, and recognizing that Departments other than the Ministry of Justice have an input into this, there can be no compelling reason to withhold from public view the factual information about the impact of the introduction of employment tribunal fees which will have been collated by the review. There is a troubling contrast between the speed with which the Government has brought forward successive proposals for higher fees, and its tardiness in completing an assessment of the impact of the most controversial change it has made. Such assessments are crucial in enabling judgements to be reached on similar proposals, such as those issued in April 2016 on greatly increased fee levels in the Immigration and Asylum Chamber. (Paragraph 58)

6.We find it unacceptable that the Government has not reported the results of its review one year after it began and six months after the Government said it would be completed. On the basis of Mr Vara’s evidence to us on 9 February, we assumed that the review would be published shortly and we put on hold our preparation of this report to enable us to take account of the Government’s review. Following receipt of Mr Raab’s letter of 25 April we decided we could wait no longer to finalise and agree our own report. We have not appreciated being strung along in this fashion; it has been detrimental to our work and occasioned public speculation about the reasons for the delay in production of our own report; and we view this as unhelpful and not good practice. As is often the case in inquiries of this kind, the evidence we have received has been preponderantly critical of the Government’s position. It is impossible for us to gauge whether the case in support of the Government’s policies would be strengthened by the outcome of its review, because they have not yet published it. (Paragraph 59)

7.We consider it is a reasonable objective for the Government to seek to reduce the number of vexatious claims through a degree of financial risk for claimants, although we note the comment of Sir Ernest Ryder, Senior President of Tribunals, that it is too soon after the changes to judge whether that objective is being met. The issue for us has been whether fees have unacceptably impacted on access to justice. (Paragraph 68)

8.In coming to a judgement about the impact on access to justice of employment tribunal fees, we consider, on the weight of the evidence given to us, that Mr Vara’s heavy reliance on the figure of 83,000 cases dealt with at ACAS early conciliation to support his contention that access to justice has not been adversely affected by employment tribunal fees was, even on the most favourable construction, superficial. Those cases cannot be simplistically assumed to represent displaced cases which were settled satisfactorily otherwise than by being taken to tribunal. In many cases the existence of fees erects a disincentive for employers to resolve disputes at an early stage. The arguments presented to us by the Government in this inquiry, limited as they are for the reasons we have previously set out, have not swayed us from our conclusion, on the evidence, that the regime of employment tribunal fees has had a significant adverse impact on access to justice for meritorious claims. (Paragraph 69)

9.We agree with the assessment of Sir Ernest Ryder, Senior President of Tribunals, that the Type A and Type B categorisation of employment tribunal claims is too simplistic. (Paragraph 73)

10.We do not have the benefit of seeing the factual basis of the Government’s review of implementation of the fees; nor do we have the resources or data to undertake economic modelling of the impact of potential changes to the fees regime. The status of our recommendations, as set out below, is therefore that they should be taken as indicating options for achieving the overall magnitude of change necessary to reinstate an acceptable level of access to justice to the employment tribunals system. (Paragraph 78)

11.We recommend that the Government publish forthwith the factual information which they have collated as part of their post-implementation review of employment tribunal fees. We further recommend that –

We cannot conclusively judge if such changes would adequately address the constraints upon access to justice in employment tribunals which have been identified. Any changes brought in should therefore be subject to further review and modification as necessary. (Paragraph 79)

12.We recognize that the above recommendations would have cost implications for the Ministry of Justice, but note that an increase in the number of legitimate claims would in itself bring in additional fee income, and, secondly, we stress again that if there were to be a binary choice between income from fees and preservation of access to justice, the latter must prevail as a matter of broader public policy. (Paragraph 80)

The impact of fees: money claims

13.The Government has not ruled out returning to its previous proposal of increasing the cap on fees for money claims from £10,000 to £20,000. It would be unsatisfactory if it were to bring forward this proposal again before undertaking an analysis of the impact of the increase which has already taken place, to 5% of the value of a claim up to a cap of £10,000. (Paragraph 85)

14.We recommend that the Government review the impact of the April 2015 increase in fees for money claims on the international competitiveness of London as a litigation centre when sufficient time has elapsed, possibly 2 or 3 years, to enable that impact to be assessed. The Government should not resurrect its proposal to double the £10,000 cap, or remove it altogether, unless such a review has been undertaken. (Paragraph 85)

The impact of fees: divorce petitions

15.We share the concerns which have been expressed to us about the increase in the fee for bringing a divorce petition. £410 is already an enhanced fee: a further increase to £550, which is approximately double the cost to the courts of providing the service, is unjustified. It cannot be right that a person bringing a divorce petition, in most cases a woman, is subject to what has been characterised in evidence to us as effectively a divorce tax. (Paragraph 89)

16.We recommend that the increase in the divorce petition fee to £550 be rescinded. (Paragraph 89)

The impact of fees: immigration and asylum

17.The evidence which we received in our inquiry on the likely impact of the proposed doubling of fees in the Immigration and Asylum Chamber caused us considerable concern. That concern has been magnified by the more recent publication of the Government’s proposals to set fees at a cost-recovery level, involving a six-fold increase in the fees currently charged. Neither do we believe that significant cost-recovery is ever likely to be realistic given the circumstances of most people who come through the immigration and asylum system. If these proposals are proceeded with, there is a danger that they will deny vulnerable people the means to challenge the lawfulness of decisions taken by the state about their immigration and asylum status. Given the experience with employment tribunal fees, we think it is unwise for the Government to have brought forward proposals for fees set at a level to achieve full-cost recovery in the Immigration and Asylum Chamber before having published its review of the implementation of employment tribunal fees. (Paragraph 92)

Fee structure and fee remission

18.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. (Paragraph 95)

19.We do not have sufficient evidence to come to a firm conclusion on whether the standard courts and tribunals fee remission system should be applied in the Immigration and Asylum Chamber, 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. (Paragraph 96)

20.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. (Paragraph 97)

© Parliamentary copyright 2015

16 June 2016