Joint Committee on Statutory Instruments Nineteenth Report


Memorandum by the Lord Chancellor's Department




  1. The Lord Chancellor's Department submits this memorandum in response to the request dated 19 April 2000 on the following points:

    Explain the reasons for the increases -

    (a)  in relation to each instrument, in the fees payable on filing a request for a detailed assessment hearing;

    (b)  in the fees for commencing proceedings to recover a sum of money (fee 1.1 (a) and (b) [ S.I. 2000/937] and fee 1.1 and 1.2 [S.I. 2000/939]).

Fee payable on filing a request for a detailed assessment hearing

  2. As part of the new civil litigation framework introduced by the Civil Procedure Rules on 26 April 1999, simpler, unified procedures for the assessment of costs were introduced in the Supreme Court and the county courts, replacing procedures for the 'taxation' of costs.

  3. A detailed assessment hearing is held where one party has been ordered to pay another's costs, but disputes specific items in the bill. In accordance with the principles adopted by the Lord Chancellor for the new fee structure introduced to support the new civil litigation framework, a flat rate fee was introduced in both the Supreme Court and the county courts to cover the average costs of the work involved. It replaced a very different charging system based on the value of the bill being taxed.

  4. Prior to 26 April 1999 two percentage-based fees were payable in the 'taxation' process. A fee was payable on lodging the bill of costs and another fee was payable on completion of the taxing or detailed assessment hearing. The combined fee was effectively 7.5% of the amount allowed. A survey of fees taken prior to 26 April 1999 showed that the average fees taken (lodging + taxing) were £720 (Supreme Court), £300 (county court), and £286 (family proceedings).

  5. Historical data could not provide clear guidance on, for example, the average length of a hearing, and the amount of judicial and administrative work that might be involved in dealing with assessment of costs under the new simpler procedure. The fees were therefore set at a 'best estimate' from 26 April 1999: £160 (Supreme Court) and £120 (county court). A single composite fee of £80 was set for all family detailed assessments, whether at hearings or not because at the time that the 1999 Fees Orders were laid it was not certain that the new procedure for detailed assessment hearings would apply to family cases. The procedure for dealing with family detailed assessments was only brought into line with assessments of costs in non-civil family cases after the fees had been set and the 1999 Orders laid.

  6. Since 26 April 1999, surveys have been conducted on the length of detailed assessment hearings. As a consequence the fees have been revised upwards to reflect more fairly the average cost of the procedure. In addition the opportunity has been taken to bring the charging points in Family Proceedings in line with those in Supreme Court and County Court proceedings by defining a separate fee for a detailed assessment hearing. The new fees are therefore £180 (Supreme Court), £150 (county court), and £130 (Family Proceedings).

Fees payable on issue of proceedings

  7. As a general principle, fees are set to recover the costs of the civil justice system in full from litigants. Exemption and remission provisions, funded from the public purse, protect the position of less well-off litigants. Fees for allocation and listing for trial recover only a proportion of the cost of defended hearings and the work leading up to them. The balance is recovered through the fees payable on issue of proceedings. Issue fees for money claims (fees 1.1(a) and (b) [S.I. 2000/937] and fee 1.1 and 1.2 [S.I. 2000/939])are set in a graduated scale based on the value of the claim but also taking account in some measure of the statistical risk of a defended hearing and the length of that hearing in relation to claim size.

  8. Fee increases have been necessary because projections have indicated that the Court Service is likely to fall some £18m short of its recovery target in 2000-2001. This is due to a greater than anticipated reduction in the volume of claims issued. This may be the result of the successful achievement of one of the main objectives of the reforms to reduce delay in resolving the disputes by encouraging early settlement of claims.

  9. Overall issue fees have increased by an average of 12%, although this has been tailored so that fees are increased slightly less at the lower end of the scale and more at the top end, reflecting the fact that higher value claims usually involve the court in more work than lower value claims. While it was already known that claims over £50,000 were more expensive for the Court Service to deal with than smaller claims, data collected after the implementation of the Civil Justice Reforms showed that claims over £50,000 were more expensive for the Court Service than previously thought. The percentage increases are therefore lower for fees 1.1(a)-(e) and 1.2(a)-(e) [S.I. 2000/939] and higher for fees 1.1(f)-(i) and 1.2(f)-(i) [S.I. 2000/939] and 1.1(a) and (b) [ S.I. 2000/937].

  10. A second element of increase applies to claims of £1,000 or less (fee 1.1(a)-(e) and 1.2(a)-(e) [S.I. 2000/939]). The Lord Chancellor decided to abolish the flat rate £80 allocation fee for defended claims up to £1,000. He was concerned that litigants might be deterred from seeking access to justice. To ensure that litigants issuing higher value claims did not have to subsidise lower value claims unfairly, an extra £5 has been added to the issue fees for claims under £1,000, making the abolition of the allocation fee for claims of this value cost neutral.

  11. Finally, fee 1.2 [S.I. 2000/939] applies to users of the Court Service's centralised computerised claims production centre, a facility it has offered since 1990 to businesses which issue a high volume of claims, to reduce costs and improve service. To encourage bulk issuers to take advantage of this service, a discount of £5 was offered. This has been increased this year to £7 to reflect better the savings resulting from the automated production of claims.

26th April 2000

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