Joint Committee on Statutory Instruments Eighteenth Report

Appendix 3

S.I. 2003/645, S.I. 2003/646, S.I. 2003/648: memorandum from the Lord Chancellor's Department

Family Proceedings Fees (Amendment) Order 2003 (S.I. 2003/645)
Supreme Court Fees (Amendment) Order 2003 (S.I. 2003/646)
County Court Fees (Amendment) Order 2003 (S.I. 2003/648)

13.  The Committee has asked the Lord Chancellor's Department to submit a memorandum to:

Explain the reasons for the increase in fees made by these instruments, with particular reference to the new fees specified in relation to -

(a) items 4.4 (ancillary relief application - from £80 to £120) and 8.4 (detailed assessment appeal - from £50 to £100) in S.I. 2003/645;

(b) items 2.2 (listing for trial - from £400 to £600) and 10.4 (detailed assessment appeal - from £50 to £100) in S.I. 2003/646;

(c) item 3.4 (detailed assessment appeal - from £50 to £100) in S.I. 2003/648

The increase in fees generally

14.  Under Treasury guidelines (paragraph 2.1 of the Treasury's Fees and Charges Guide) departments and agencies are normally expected to meet the full cost of services through fees. However there may be cases in which Ministers agree that a service should recover less than its full cost. This applies to the provision of civil court proceedings, where allowance is made for automatic exemption for those on tax credits; for remission of fees where payment would cause undue financial hardship; and for a public subsidy for certain family proceedings due to their special nature. The balance of cost should then be recovered through the fees charged.

15.  Since fees were last increased in 1999 and 2000, the Court Service has had difficulty in achieving that level of cost recovery. The demand for civil litigation has fallen generally. The total number of writs and originating summonses, or claims, issued in the Supreme Court (excluding those in insolvency proceedings) fell from 124,444 in the calendar year 1998, to 28,895 in the calendar year 2001, a decline of over 76% (source: Judicial Statistics). The civil justice reforms which resulted in the Civil Procedure Rules successfully allocated cases to their most appropriate venue but involved as a by-product a reduction in the number of claims issued in the Supreme Court. Costs have also increased.

16.  For 2000-01 the difficulty was recognised and a lower income target was set. Fees were increased with effect from 25 April 2000 by 12% overall. There have been no further increases since then and the decline in the number of claims has continued. As a result, if no action were taken to increase fees the gap between income and cost would become progressively worse.

17.  The income from court fees needed to achieve the lower income target set for 2003-04 is projected to be £311.551m. This is still well below full cost but called for an increase of 12% in the overall level of income from fees. On an annual basis this is an increase of 4% for the gap of approximately three years since the last increase. Had fees not been increased a budgetary shortfall of some estimated £30.70m was projected. Whilst the exact effect of such a shortfall would be an operational decision when it occurred and we should look to protect front-line services so far as possible it might involve deferring investment or waiting times, reducing the quality of the service provided.

18.  The Court Service is currently examining how to address the problem of reduced demand for civil litigation as part of a longer-term programme which also looks at ways of reducing the costs of the individual services and how best to utilise the court estate. Any fee increases following the wider programme will be the subject of future consultation.

Family Proceedings Fees (Amendment) Order 2003 (S.I.2003/645) - Fee 4.4 Ancillary Relief Application

19.  It was recognised that the general fee of £60 applying to family applications with a hearing was not high enough where the application was for ancillary relief and in April 2000 a fee of £80 was introduced for applications for ancillary relief. The fee would have been set higher but for the shortage of data on judicial time and because of concern as to the size of the percentage increase. A survey of hearings in all county courts in England and Wales subsequently revealed an average hearing time of 85 minutes. As the cost of an hour of district judge time is in excess of £200 even the new fee of £120 is still well below cost based on judicial time alone. This fee is not one of those benefiting from the 'family subsidy' referred to above and the Department intends to review it over the next 12 months. Overall, family fees are expected to recover 53% of cost after allowing credit for agreed subsidies.

Supreme Court Fees (Amendment) Order 2003 (S.I. 2003/646) - Fee 2.2 Listing for Trial

20.  There is no trial fee as such and this fee is intended to make a contribution towards recovering the cost of the trial and preparation for trial. The average trial length in the Supreme Court is 11 hours 4 minutes and at £600 the fee recovers only a relatively small proportion of cost. Those paying this fee will also have paid a fee on issue of proceedings and a fee on allocation to track. However the overall level of cost recovery in the Supreme Court after the increases and after allowing credit for subsidies is expected to be only 23%.

Family Proceedings Fees (Amendment) Order 2003 (S.I.2003/645)- Fee 8.4 (detailed assessment appeal)

Supreme Court Fees (Amendment) Order 2003 (S.I. 2003/646) - Fee 10.4 (detailed assessment appeal)

County Court Fees (Amendment) Order 2003 (S.I 2003/648) - Fee 3.4 (detailed assessment appeal)

21.  The general fee on an application is now £60. In a county court the hearing of such an application would typically be expected to last 10 minutes. However as with the fee on ancillary relief it became clear that hearing times for appeals in detailed assessment were longer and that a higher fee was needed. Hearing times on appeals in detailed assessment proceedings are likely to last at least twice a long as those on applications generally and can last several hours.

22.  The complex fees on appeals generally (outside the Court of Appeal) ranging from £50 to £150 were replaced by a single fee of £100 (except small claims track £80) and the opportunity was taken to bring appeals in detailed assessment into line. County court non-family work (excluding insolvency) is expected to recover its cost in full and the overall level of cost recovery in respect of the above fees orders, after allowing credit for agreed subsidies, is expected to be 75% following the increases.

April 2003

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