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Fortieth Report of Session 2017–19 Contents

Instruments reported

At its meeting on 5 December 2018 the Committee scrutinised a number of Instruments in accordance with Standing Orders. It was agreed that the special attention of both Houses should be drawn to nine of those considered. The Instruments and the grounds for reporting them are given below. The relevant Departmental memoranda are published as appendices to this report.

1Draft S.I.: Reported for doubtful vires and unexpected use of powers

Non-Contentious Probate (Fees) Order 2018

1.1The Committee draws the special attention of both Houses to this draft Order on the grounds that, if it is approved and made, there will be a doubt whether it is intra vires, and that it would in any event make an unexpected use of the power conferred by the enabling Act.

Introduction

1.2Probate fees are payable by executors when they apply for a grant of probate, a formal document needed to administer a deceased person’s estate. Fees must be paid by the executors in advance, but they can recover them from the estate once probate is issued. Applications for probate are made to the Probate Registry, which is part of the High Court of England and Wales. Under existing legislation,1 executors must pay a fee of £155 if the application is made by a solicitor, or £215 if the application is made by the executors in person, regardless of the value of the estate—except that no fee is payable if the estate is valued at less than £5,000.

1.3In February 2017, the Lord Chancellor laid the draft Non-Contentious Probate Fees Order 2017 (“the 2017 Order”) before Parliament for approval by both Houses. The Order would have replaced the current flat fee system with a sliding scale of fees rising with the value of the estate. The amount payable in respect of each valuation band would have been as follows:

Value of estate

Proposed fee

Up to £50,000

£0

£50,000 to £300,000

£300

£300,000 to £500,000

£1,000

£500,000 to £1 million

£4,000

£1 million to £1.6 million

£8,000

£1.6 million to £2 million

£12,000

Over £2 million

£20,000

1.4In its 26th Report of Session 2016–17 (published on 31 March 2017),2 the Committee drew the 2017 Order to the special attention of both Houses. This was on the grounds that: (a) the charges prescribed by it would in substance constitute a tax on estates, rather than probate fees, and may therefore be ultra vires; and (b) the Committee doubted whether Parliament contemplated that the enabling powers would be used in the way proposed by the Lord Chancellor.

1.5The 2017 Order was debated by the Commons Second Delegated Legislation Committee on 19 April 2017,3 but it was not approved by the House of Commons itself or by the House of Lords. The draft Order was eventually withdrawn, without having been made, on 5 November 2018. On the same day, the Lord Chancellor laid before Parliament the draft Non-Contentious Probate (Fees) Order 2018 (“the 2018 Order”). If it is approved by both Houses, the Lord Chancellor may proceed to make the Order, and it will then come into force 21 days later.4

1.6The 2018 Order provides for the same banded fee system linked to the value of the estate proposed in the 2017 Order, although the fees themselves are significantly lower. The amount payable in respect of each band is follows:

Value of estate

Proposed fee

Up to £50,000

£0

£50,000 to £300,000

£250

£300,000 to £500,000

£750

£500,000 to £1 million

£2,500

£1 million to £1.6 million

£4,000

£1.6 million to £2 million

£5,000

Over £2 million

£6,000

1.7These fees are expected to generate substantial revenues, estimated at over £145 million in fee income in 2019–20 above the income from the existing flat fee system5 (which raises £49 million per annum and recovers the full cost of running the Probate Registry). The additional revenues are expected to rise yearly in line with increases in estate values. They are to be used to subsidise parts of H.M. Courts and Tribunals Service other than the Probate Registry.

1.8As the Committee was concerned that the 2018 Order may be flawed for similar reasons to those given in its report on the 2017 Order, it asked the Ministry of Justice to explain, in light of the conclusions reached in that report, why the fees prescribed by the 2018 Order are: (a) considered to be within the Lord Chancellor’s powers; and (b) within the contemplation of Parliament when it conferred those powers. The Ministry of Justice’s response is given in the memorandum printed at Appendix 1.

Vires

1.9Any fees which produce an income above the levels to recover costs are termed “enhanced fees”. The Lord Chancellor has power under section 180(1) of the Anti-social Behaviour, Crime and Policing Act 2014 (“the 2014 Act”), with the consent of the Treasury, to “prescribe a fee [under section 92 of the Courts Act 2003 in respect of anything done by the High Court (which includes the Probate Registry)] of an amount which is intended to exceed the cost of anything in respect of which the fee is charged”.

1.10Before prescribing an enhanced fee, the Lord Chancellor must have regard to—

The fees must be used “to finance an efficient and effective system of courts and tribunals”.7

1.11The Ministry of Justice contends in its memorandum that:

1.12These arguments do not dispel the Committee’s doubts about vires expressed in its report on the 2017 Order.

1.13The Committee accepts that section 180 of the 2014 Act allows for a fee to be prescribed which exceeds the cost of the provision of the service—in this context, the cost of issuing a grant of probate in an individual case. However, as it observed in its report on the 2017 Order, the word “fee” has connotations of recovery of costs, direct or indirect, incurred in the provision of the service concerned or in the administration of the process. Although section 180 permits “enhanced fees”, it remains a power to prescribe a “fee”, a concept which is subject to inherent limitations about the relationship to the service for which it is charged—including one of proportionality. The Lord Chancellor is not permitted to impose a tax.

1.14The Committee retains significant doubt that the Lord Chancellor may use a power to prescribe non-contentious probate fees for the purpose of funding services which executors do not seek to use—namely those provided by courts and tribunals dealing with litigation. The Committee observed in its 26th Report of Session 2016–17 that:

“applying for probate is not to be compared with the commencement of proceedings. A person can choose whether to litigate, and therefore whether to incur the fees payable on issuing a claim—which may be recoverable from the defendant if the case succeeds. In contrast, executors have to obtain probate to allow them to administer an estate, and the fee for doing so is not refundable. This is an administrative process, akin to the registration of a life event. Nobody applying for an uncontested probate would think for a moment that they were engaging in litigation. That makes it difficult for the Committee to accept that a power to charge enhanced court fees can be extended naturally to require probate fees to reflect the general costs of the court and tribunal system.”

1.15The Committee is not convinced that section 180(3) of the 2014 Act, which simply requires the Lord Chancellor to have regard to the financial position of courts and tribunals, clearly authorises him to require executors to pay whatever amounts he regards as appropriate for the purpose of providing funds for the courts and tribunals—as opposed to the Probate Registry in particular. The Committee remains of the view that, if Parliament had intended to confer power on the Lord Chancellor to legislate in such a way, it would have included explicit provisions in section 180.

1.16The Committee considers that the charges provided for in the 2018 Order have all the characteristics of taxation rather than fees. This is particularly in view of the amounts that would be payable for larger estates and the scale of the proposed increases (from £155 to as much as £6,000—a rise of 3,770%)—and because (a) the charges bear no proportion at all to any service provided by the Probate Registry, and (b) the revenue generated is to be used to fund completely different services. Moreover, the Government’s justification for the proposed charges given in the Explanatory Memorandum appears to support the Committee’s assessment that this is a taxation measure:

“We believe … it is appropriate and progressive to charge an increased fee for a grant of probate in order to increase the contribution from those users of the court and tribunals services who can afford to do so. This, therefore, goes some way to rebalancing the contribution to the courts and tribunal service between the taxpayer and direct user.”9

1.17It strikes the Committee that the 2018 Order would, in effect, levy a type of stamp duty on grants of probate, although dressed up as “fees”. Indeed, the proposed banded system of fees has much in common with the banded system of Stamp Duty Land Tax payable on transfers of residential property:

Transfer value of property

Stamp duty rate

Up to £125,000

Zero

The next £125,000 (the portion from £125,001 to £250,000)

2%

The next £675,000 (the portion from £250,001 to £925,000)

5%

The next £575,000 (the portion from £925,001 to £1.5 million)

10%

The remaining amount (the portion above £1.5 million)

12%

1.18It is an important constitutional principle that there should be no taxation without the consent of Parliament, which must be embodied in statute and expressed in clear terms.10 In the Committee’s view, the 2018 Order is a measure of taxation for which there is no clear statutory authority.

1.19The Committee accordingly reports paragraph 1 of Schedule 1 to the draft Order on the ground that there appears to be doubt as to whether it would be intra vires.

Use of powers

1.20The Committee also asked whether the Ministry of Justice considered that, in prescribing the proposed new probate fees, the Lord Chancellor would be acting in a way contemplated by Parliament when it enacted section 180 of the 2014 Act. The Ministry of Justice responds to this question in the affirmative, for essentially the following reasons:11

1.21As indicated above, the Committee acknowledges that section 180 allows the Lord Chancellor to prescribe enhanced probate fees, and that it is drafted in broad terms. Nonetheless, the Committee doubts whether Parliament intended to confer a power on the Lord Chancellor to exercise the power in the way now proposed. The Committee’s report on the 2017 Order said that there appeared to be “no evidence that the Government suggested to Parliament that the section 180 power would be used to prescribe probate fees in order to fund the operation of the courts and tribunals service generally, or to provide for such large and immediate increases of fees in the way now proposed”.12 The Ministry of Justice has provided no new evidence or arguments that would cause the Committee to change that assessment.

1.22The Committee’s view that the Lord Chancellor proposes to exercise the section 180 power in an unexpected way is reinforced by the recent report of the House of Lords Secondary Legislation Scrutiny Committee (“the SLSC”) on the 2018 Order.13 The SLSC pointed out that the proposed fees appear not to conform with Managing Public Money, the standard guidance issued to Government departments by HM Treasury. Paragraph 6.3.6 of that document states: “different groups of customers should not be charged different amounts for a service costing the same, e.g. charging firms more than individuals. Similarly, cross subsidies are not standard practice, e.g. charging large businesses more than small ones where the cost of supply is the same”.

1.23The Committee therefore reports paragraph 1 of Schedule 1 to the draft Order on the ground that it would appear to make an unexpected use of the power conferred by section 180 of the Anti-social Behaviour, Crime and Policing Act 2014.

2S.I. 2018/1106; S.I. 2018/1107; S.I. 2018/1108: Reported for defective drafting

Merchant Shipping (Work in Fishing Convention) Regulations 2018; Merchant Shipping (Work in Fishing Convention) (Survey and Certification) Regulations 2018; Merchant Shipping (Work in Fishing Convention) (Medical Certification) Regulations 2018

2.1The Committee draws the special attention of both Houses to these Regulations on the ground that each of them is defectively drafted in the same one respect.

2.2These three Regulations are part of a package of instruments designed to bring UK law into line with the Work in Fishing Convention 2007 (which came in to force internationally on 16 November 2017).

2.3In relation to non-UK fishing vessels S.I. 2018/1108 (regulation 3(1)(b)) states that certain regulations apply to those vessels while they are in a “United Kingdom port” or “United Kingdom waters” whereas S.I.s 2018/1107 (regulation 3(2)) and 2018/1106 (regulation 3(b)) apply to non-UK fishing vessels while they are in “United Kingdom waters” only. The Committee asked the Department for Transport to explain the difference of language.

2.4In a memorandum printed at Appendix 2, the Department explains that as UK waters include the waters within UK ports, there is no substantive difference between the two provisions. The Department acknowledges that the wording could be misconstrued as signifying a different scope of application for the three instruments and undertakes to address this in guidance. It is an important principle of statutory interpretation that a change of language implies a change of meaning, and drafters of an instrument or package of instruments should ensure that consistent language is used. The Committee accordingly reports regulation 3(1)(b) of S.I. 2018/1108, regulation 3(2) of S.I. 2018/1107 and regulation 3(b) of S.I. 2018/1106 for defective drafting, acknowledged by the Department.

3S.I. 2018/1107: Reported for defective drafting and for requiring elucidation

Merchant Shipping (Work in Fishing Convention) (Survey and Certification) Regulations 2018

3.1The Committee draws the special attention of both Houses to these Regulations on the ground that they are defectively drafted in two respects and require elucidation in one respect.

3.2These Regulations implement the parts of the Work in Fishing Convention 2007 relating to the survey and inspection of fishing vessels.

3.3Regulation 4(1)(b) states that a renewal survey for vessels that require a Work in Convention Certificate must be completed at specified intervals as set out in Merchant Shipping Notice 1885(F) (that is, every four years (for vessels over 24 metres in length) otherwise every five years). Regulation 4(2) repeats this information but suggests that a renewal survey is only required at a specified interval after the “initial” survey rather than the previous survey. The Committee asked the Department for Transport to explain. In a memorandum printed at Appendix 3, the Department acknowledges that there is duplication in regulations 4(1)(b) and 4(2) and that the drafting could have been better expressed. The Committee believes that the drafting of regulation 4 is defective as it is inconsistent and confusing; renewal surveys are required at specified intervals (in accordance with Merchant Shipping Notice 1885(F) as applied by regulation 4(1)(b)) but the language of regulation 4(2) only works correctly for the first renewal. The Committee accordingly reports regulation 4(2) for defective drafting.

3.4Regulation 4(3) states that a fishing vessel which does not fall within regulation 4(2) is subject to a renewal survey every five years. Given that regulation 4(2) appears to cover all fishing vessels, the Committee asked the Department to explain how a fishing vessel could not fall within that regulation. In its memorandum, the Department explains that regulation 4(3) is intended to make provision for fishing vessels that are not subject to regulation 4(1) (that is, vessels which do not require a Work in Fishing Convention Certificate). The Committee accepts that the courts and other readers will be forced to this conclusion, but the language is again confusing, and regulation 4(3) should have been made subject to regulation 4(1). The Committee accordingly reports regulation 4(3) for defective drafting.

3.5Regulations 11(1) and 14(1) state that a fishing vessel is liable to be detained where a relevant inspector has “clear grounds” for believing that the vessel does not comply with these Regulations (regulation 11(1)) or the Work in Fishing Convention (regulation 14(1)). The Committee asked the Department to explain the meaning of “clear grounds”. In its memorandum, the Department explains the derivation of the expression “clear grounds” and sets out the definition. The Department further explains that although the term does not appear in the text of the Work in Fishing Convention, it is a well-established concept in Port State Control. The Committee accordingly reports regulations 11 and 14 for requiring the elucidation provided in the Department’s memorandum.

4S.I. 2018/1114: Reported for defective drafting

National Health Service (Pharmaceutical Services, Charges and Prescribing) (Amendment) Regulations 2018

4.1The Committee draws the special attention of both Houses to these Regulations on the ground that they are defectively drafted in one respect.

4.2These Regulations amend existing regulations to provide, among other things, a statutory gateway for the sharing of prescription data between NHS contractors, commissioners and the NHS Business Services Authority (NHS BSA) which is a Special Health Authority.

4.3One of the enabling powers cited is section 7(1C) of the National Health Services Act 2006 (power to confer additional functions on Special Health Authorities). Section 272(6) of the Act states that a statutory instrument containing regulations under section 7(1C) is subject to affirmative resolution. The Committee asked the Department of Health and Social Care to explain why the affirmative procedure was not used.

4.4In a memorandum printed at Appendix 4, the Department states that section 7(1C) was cited in the preamble in error and the relevant regulation (regulation 15, which inserts regulation 18A in to the National Health Service (Charges for Drugs and Appliances) Regulations 2015) was in fact made under section 272(8)(a) of the 2006 Act. Section 272(8)(a) relates to the making of incidental, supplementary or consequential provision. The Department explains that new regulation 18A makes provision facilitating the discharge of existing data handling functions of the NHS BSA which is properly characterised as an incidental measure made under section 272(8)(a) and contains no “additional functions” for the NHS BSA within the meaning of section 7(1C). The decision of the Court of Appeal in Vibixa Ltd and Polestar Jowetts Ltd v. Komori UK Ltd and others [2006] EWCA Civ 536 gives preambles a particular importance, and they were never a light matter; since the Department acknowledges that this instrument would be ineffective (not having been subjected to the correct procedure) if it were treated as having been made in reliance on each of the provisions stated in the preamble, the Department may wish to consider whether merely asserting that it did not need or intend to rely on section 7(1C) is sufficient to resolve any difficulty in relation to the lawfulness of the instrument. The Committee accordingly reports the preamble for defective drafting.

5S.I. 2018/1116: Reported for defective drafting

Childcare (Miscellaneous Amendments) (EU Exit) (England) Regulations 2018

5.1The Committee draws the special attention of both Houses to these Regulations on the ground that they are defectively drafted in one respect.

5.2These Regulations make minor drafting changes to three existing sets of regulations to ensure that information-sharing provisions between England and national childcare regulators in the European Economic Area are retained after the UK’s withdrawal from the European Union. The instrument is made using powers conferred by the Childcare Act 2006 and not those under the European Union (Withdrawal) Act 2018 (EU(W)A). Regulation 1 states that the instrument comes in to force at 11pm on 29th March 2019. Instruments made under the EU(W)A usually come in to force on “exit day” to allow for any change in exit day under section 20(4) of that Act. The Committee asked the Department for Education to confirm whether it is intended that this instrument comes in to force at 11pm on 29 March 2019 in any event. In a memorandum printed at Appendix 5, the Department states that if the definition of exit day is amended the intention is that these regulations should come into force on that day and undertakes to amend the Regulations to that effect when a suitable opportunity arises. The Committee accordingly reports regulation 1 for defective drafting, acknowledged by the Department.

6S.I. 2018/1119: Reported for requiring elucidation

Ministry of Defence Police (Conduct and Appeals Tribunals) (Amendment) Regulations 2018

6.1The Committee draws the special attention of both Houses to these Regulations on the ground that they require elucidation.

6.2These Regulations allow disciplinary proceedings to be bought against former Ministry of Defence police officers in certain circumstances. They achieve this by applying modifications to the existing conduct regulations, which only allowed such proceedings while an individual remained employed by the Ministry. Due to the large number of modifications, many of them technical, that will need to be read into the conduct regulations for proceedings against former officers, the Committee asked whether the Ministry of Defence intended to produce a text showing the regulations as modified by this instrument, and if so, how that text would be published (having regard to the importance of accessibility to legislation, as set out in the Committee’s First Special Report of 2017–19 on Transparency and Accountability in Subordinate Legislation). In a memorandum printed at Appendix 6, the Department agrees that it is important for legislation to be accessible to those it might affect and confirms that it intends to place a version of the text setting out the modified procedures on the gov.uk website, and to make hard copies available on request. The Committee finds this undertaking helpful and accordingly reports this instrument for requiring elucidation, provided by the Department’s memorandum.

7S.I. 2018/1137: Reported for defective drafting and for requiring elucidation

Non-Contentious Probate (Amendment) Rules 2018

7.1The Committee draws the special attention of both Houses to these Rules on the grounds that they are defectively drafted in one respect and that they require elucidation in one respect.

7.2These Rules amend the Non-Contentious Probate Rules 1987 to simplify the process of applying for probate by, inter alia, allowing applications to be made online by applicants who are not represented by a solicitor (personal applicants).

7.3There are standard and alternative procedures for personal applications, as set out in rules 5 and 5A of the 1987 Rules. For online personal applications, the standard procedure is set out in a new rule 5ZA and the alternative procedure is in rule 5A, as amended by this instrument. Rule 6(2) amends the heading of 5A to reflect this change, but the amendment is made by reference to a word (“online”) that does not appear in the original heading, so it cannot have effect. This has repercussions for other amendments to the 1987 rules which cite the heading of 5A as amended (the version in new rule 5ZA contains a separate, unrelated error as it refers to “alternative online applications” in place of “alternative online procedure”). The Committee asked the Ministry of Justice to explain what it will do to correct these errors and to ensure that references to the heading of rule 5A are consistent throughout the 1987 Rules. In a memorandum printed at Appendix 7, the Department acknowledges the error in rule 6 and undertakes to correct it at the earliest available opportunity. The Committee is grateful for this undertaking and hopes the Department will use that opportunity to correct the error in rule 5ZA. The Committee accordingly reports rule 6 for defective drafting, acknowledged by the Department.

7.4The Committee also asked the Department to explain why the statement of authority to sign on behalf of the Lord Chancellor, which appears in three previous instruments that amended the 1987 Rules, does not appear in this instrument. The Department states that it has updated its internal drafting practice to better align with that of other Government departments. This practice treats such wording as superfluous when the power is exercised by a junior Minister, who has clear authority under the Carltona principle to sign statutory instruments falling within his or her area of responsibility. The Committee is grateful for this explanation of the change to the Department’s practice and accordingly reports the instrument for requiring elucidation, provided by the Department’s memorandum.

8S.I. 2018/1138: Reported for requiring elucidation

Social Security (Scotland) Act 2018 (Best Start Grants) (Consequential Modifications and Saving) Order 2018

8.1The Committee draws the special attention of both Houses to this Order on the grounds that it requires elucidation in one respect.

8.2The Order amends the Sure Start Maternity Grant (SSMG) scheme to reflect the creation of a parallel scheme that applies only in Scotland, so that payments are not made under both schemes in respect of the same child.

8.3To be eligible for payments under the Scottish scheme, a person must be “ordinarily resident in Scotland” or fall into a specified category, such as being a refugee or under humanitarian protection. This Order creates a corresponding residence test for the SSMG scheme to require that “the claimant lives in England or Wales,” which is not defined in the relevant legislation. The Committee therefore asked the Office of the Secretary of State for Scotland to explain what “the claimant lives in England or Wales” means for the purposes of the SSMG scheme, and whether there may be individuals who currently qualify for SSMG but would not meet the residence test.

8.4In a memorandum printed at Appendix 8, the Department explains that the residence test for England and Wales is intended to bear a natural-language meaning. It will be satisfied if the claimant lives at an address in England or Wales, which the Department will ascertain by checking the claimant’s address and postcode when they make their SSMG claim. The Department took this approach to avoid creating a “double test” for residence, as a claimant can only be entitled to SSMG if they have already been awarded a qualifying benefit with its own residence test. The Department considers that everyone living in England and Wales who would currently qualify for SSMG will still do so once the residence test is in force. The Committee hopes that the Department will keep that matter under review. The Scottish Government also confirms that all those in Scotland who would have qualified for SSMG will qualify under the Scottish scheme, as it makes wider provision than its predecessor. The Committee is grateful for these clarifications from the Department for Work and Pensions and the Scottish Government and accordingly reports this instrument for requiring elucidation, provided by the Department’s memorandum.

1 See the Non-Contentious Probate (Fees) Order 2004 (S.I. 2004/3120) as amended by S.I. 2014/876.

2 See: https://publications.parliament.uk/pa/jt201617/jtselect/jtstatin/152/15203.htm#_idTextAnchor003

3 See: https://hansard.parliament.uk/commons/2017–04–19/debates/984a6b12-abdf-4b35-bf18-ff88bb11fb28/DraftNon-ContentiousProbateFeesOrder2017

4 See article 1 of the 2018 Order.

5 See paragraph 12.2 of the Explanatory Memorandum: http://www.legislation.gov.uk/ukdsi/2018/9780111174319/pdfs/ukdsiem_9780111174319_en.pdf

6 Section 180(3) of the 2014 Act.

7 Section 180(6) of the 2014 Act.

8 See, for example, the Civil Proceedings Fees (Amendment) Order 2015 (S.I. 2015/576) which set enhanced fees for the issuing of a money claim by reference to the value of a claim—from £35 for a claim not exceeding £300 to £10,000 for a claim not exceeding £200,000.

9 See paragraph 7.5 of the Explanatory Memorandum.

10 See the Court of Appeal’s judgment in Attorney-General v Wilts United Dairies Ltd (1921) TLR 884.

11 See paragraphs 12 to 16 of the memorandum printed at Appendix 1 to this report.

12 Appendix 1A to the Committee’s report on the 2017 Order set out relevant extracts from Parliamentary debates and explanatory material relating to the clause which became section 180 of the 2014 Act: https://publications.parliament.uk/pa/jt201617/jtselect/jtstatin/152/15206.htm#_idTextAnchor029

13 Secondary Legislation Scrutiny Committee (Sub-Committee A), 6th Report of Session 2017–19, HL paper 235, paragraphs 16 and 20: https://publications.parliament.uk/pa/ld201719/ldselect/ldseclega/235/23504.htm



Published: 7 December 2018