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Lord Pearson of Rannoch: My Lords, the Minister was kind enough to refer to the questions that I asked and admit that the solution would be very difficult. He also answered his noble friend Lord Bruce of Donington by saying that we are indeed net contributors to the whole exercise. Can he say whether the United Kingdom might not have been able to spend all the sums of money that have been spent in this country without the extraordinarily expensive and wasteful filter of the EU and its various bureaucracies and committees? Indeed, could we not simply have spent that money and made a donation, which no doubt would have added another £1 billion or so to our costs, to the European Communities to enable them to do it themselves?

Lord Simon of Highbury: My Lords, I thank the noble Lord for that observation. We have heard that this system works extremely well in Ireland. When challenged earlier about why the Irish system works, the answer showed that it was because the Irish networked so well, talked to their opposite numbers in Brussels and tried to form a partnership. I cannot help commenting that if that had not worked in the past under previous regimes, it is possible that they did not understand what

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networking was about. Had they tackled Brussels in the appropriate way, perhaps we would have spent the funds more effectively.

My summary has done justice neither to the excellent detailed report nor, if I may say so, to the breadth of vision that the noble Lord, Lord Dahrendorf, so strikingly encapsulated in his contribution as to the importance of such funds. The importance is to build a strong and committed Europe and one where we would find a partnership to the advantage of our electorate.

5.50 p.m.

Lord Barnett: My Lords, I shall be brief but, as everyone else has done, I must congratulate the noble Lord, Lord Renton of Mount Harry, on a quite excellent maiden speech. I have a feeling that I shall agree with him more than I shall with others on matters such as economic and monetary union, but we are not debating that today. I also thank members of my committee for their kind and over-generous remarks about my chairmanship; they are much appreciated.

I thank my noble friend Lord Simon for his reply to the debate. On another occasion I shall take up some of the points that he made and did not make. He did not even reply to my direct question about the Barnett formula. I should have loved to have an answer to that. Indeed, he did not answer any of the specific questions I put. However, I was not too surprised at that as he is obviously learning fast! He even managed to use a fair number of DTI cliches. I shall read those again later. I appreciated the contributions of all those who spoke in the debate. I look forward to discussing various matters relating to the European Union on many other occasions.

On Question, Motion agreed to.

Court Fees

5.51 p.m.

Lord Ackner rose to ask Her Majesty's Government what action they have taken or propose to take to protect the constitutional right of access of a litigant of modest means from the impact of new and increased court fees.

The noble and learned Lord said: My Lords, since I have no right of reply at the end of this debate, I thank noble Lords who will take part, and in particular my noble and learned friend the Lord Chancellor, even more so as I believe this is the first debate to which he will reply. He and I have always seen eye to eye in our encounters in this Chamber. I am sure that that tradition will continue to flourish.

The stimulus for this debate arises out of certain court costs orders made at the end of 1996 by the then Lord Chancellor under powers conferred on him by Section 130 of the Supreme Court Act 1981. These orders not only more than doubled fees but added new fees where previously there had been none and removed certain exemption provisions. I have given notice to my noble and learned friend the Lord Chancellor that this debate gives rise not merely to questions of practical concern as to the extent to which access to justice is

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being denied or restricted by the quantum of the increases. It raises a major policy issue, with wide-ranging implications, which has never been the subject of public debate. Historically, it has been government policy for salaries and pensions of judges and the cost of court accommodation in civil litigation to be paid by the state out of public funds, while other administrative costs should be met by litigants. However, in 1982 the Government decided that accommodation costs, such as the notional rent for the Royal Courts of Justice, should be included in the costs borne by litigants, and in 1992 judicial salaries should be included. In short, the civil justice system should become self-financing.

What is quite remarkable is that this radical departure from previous practice, not heralded by any White or Green Paper, has not been the subject of public debate in Parliament or elsewhere. Indeed the previous Government have acted in a way which seems to border upon the arrogant. Let me explain. Last year the Government introduced a Housing Bill. Tucked away in Section 83 was a seemingly harmless provision enabling an application to be made to a leasehold valuation tribunal, instead of the county court, when there was a dispute as to the value or provision of services provided by a landlord.

During the Committee and Report stages it emerged that the applicant to such a tribunal was to pay the entire costs of that tribunal. Indeed the noble Lord, Lord Lucas, cheerfully observed that this would include even the milk for the office cat, assuming such existed. What was distinctly worrying was the concession by the noble Lord, Lord Lucas, that the tribunal's costs could amount to as much as £2,000 per day. This was roundly condemned from all sides of the House and the Government were defeated on Third Reading on an amendment moved by the noble Viscount, Lord Bledisloe, with a majority of 136 to 119. There was more than an hour's debate on that issue.

In the debate, to the surprise of those present, the Government revealed that they intended that full costs were to be applied to all courts. To this the noble Viscount, Lord Bledisloe--who is on the speakers' list but who may be impeded from attending--observed,

    "So be it. If that is what they"--

that is the Government--

    "want, let them introduce a Bill to that effect. Let us see and debate the various consequences and safeguards; and let us hear the considered views of judges, lawyers, litigants, etc. Let us tackle the problem face on, in its entirety".--[official Report, 17/7/96; col. 861.]

Those sentiments were, I believe, shared by all those who spoke in favour of his amendment.

But not a bit of it--there was not even prior discussion with the senior judiciary. When the heads of division queried the necessity for these drastic fee increases they were told that the increases were essential to enable the Lord Chancellor to balance his departmental budget. It was on this occasion that the heads of division, whose concurrence to these new fees was required, were told that it had for some years been the established government policy that the civil justice system should be self-financing. The annual subvention

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from public funds for the Lord Chancellor's Department is apparently nowadays calculated on the footing that nothing need be allowed for the civil justice system as its costs will be met by litigants. Thus without these recent increases in fees and the imposition of new fees the Lord Chancellor could not have--having regard to the annual sum allowed his department by the Treasury--met the expenses of the system for which he is responsible. Not surprisingly the heads of division felt obliged to give their concurrence to the orders, which I understand are expected to raise in excess of £50 million and a further £50 million by orders to be made this year.

In regard to the above facts I am indebted to the vice chancellor, Sir Richard Scott, who is also head of civil justice, for a transcript of a highly critical speech given by him on 13th March 1997 to the Kent Law Society in the Keith Tucker lecture. I agree with the views expressed by the Vice Chancellor in that lecture; namely,

    "that the civil justice system is an integral and indispensable part of the structure of administration of justice that must be put in place by every State in which public and private affairs are to be conducted in accordance with the rule of law; and that a policy which treats the civil justice system merely as a service to be offered at cost in the market place, and to be paid for by those who choose to use it, profoundly and dangerously mistakes the nature of the system and its constitutional function".

In my remaining few minutes, I turn to issues of practical concern, hoping that others may develop the matter fully. The previous orders were made in 1980 and contained provisions relieving litigants on income support from the obligation to pay fees, and, in addition, giving the Lord Chancellor a discretion to reduce or omit a fee where,

    "it appears to the Lord Chancellor that payment by a party ... would involve undue financial hardship because of exceptional circumstances of the particular case".

Article 3 of the 1996 orders removed those provisions. I fear that I can spare no time on the humiliating decision suffered by the previous Government as a result of the application made by Mr. Witham to the divisional court within weeks of the orders coming into force. It declared that Article 3, to which I made reference, was unlawful. The value of the case for present purposes lies in the recognition by the court of the constitutional importance of access to the civil courts.

The House will recall from the recent debates on the provisions of the Crime (Sentences) Bill, in particular those provisions dealing with mandatory life sentences and minimum sentences, that those words "exceptional circumstances" are inevitably interpreted in a very restrictive manner. Although they do not amount to once in a blue moon, they get very close to that situation. There are clearly many litigants unable to obtain legal aid who cannot afford to pay court fees and whose circumstances are therefore not only unexceptional but extremely common. In regard to those persons, if access to justice is not to be entirely illusory, then the limitation on the exercise of the discretion must be changed. I would have thought it far more appropriate for the discretion to be exercised by the district judge and the words "exceptional circumstances" deleted.

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Perhaps I may take the comfort of ending with three short quotations from brother Law Lords. First, in the case of ex parte Lwch in 1994, in Queen's Bench 198, Lord Justice Steyn said:

    "It is a principle of our law that every citizen has a right of unimpeded access to a court".

In Raymond v. Honey, 1983, 1 Appeal Cases 13, my noble and learned friend Lord Wilberforce described it as a basic right. He said:

    "Even in our unwritten constitution it must rank as a constitutional right".

Finally, in his interim report on civil justice reforms, the noble and learned Lord, Lord Woolf, said at page 205:

    "Court fees can have an adverse effect on access to justice if the litigant regards them as putting the cost of litigation out of proportion to the remedy sought. As part of the review of courts' fees I would therefore wish to see the position of the litigant of modest means being protected from the undue impact of increased court fees".

I await with, I hope, justifiable confidence the reply of my noble and learned friend the Lord Chancellor.

6.4 p.m.

Lord Mishcon: My Lords, the House will be indebted, as it often is, to the noble and learned Lord, Lord Ackner, for raising an important public matter. I am indebted to him for the comprehensive way in which he has dealt with the question, thus leaving me comparatively little to say.

I have always loved that chapter in possibly the most eloquent of the Old Testament prophets, Isaiah, which commences with the Almighty, through the prophet, having a discussion with us mortals. The chapter begins with the expression, "Come, let us reason together". I use the phrase not because I wish in any way to deify my noble and learned friend the Lord Chancellor (even though he may have as part of his traditional duty to be the conscience of Her Majesty the Queen) but because it is the right note to sound when one recognises the fact that, before the noble and learned Lord commenced to grace the Woolsack, all the matters of which the noble and learned Lord, Lord Ackner, complained had been completed. Therefore, knowing well the breadth of the Lord Chancellor's mind, I ask that certain considerations be uppermost in the noble and learned Lord's mind when reviewing the matter.

The noble and learned Lord, Lord Ackner, had limited time in which comprehensively to deal with the subject. He started by saying that there were some practical considerations but that he would talk about principles of grave concern. Perhaps I may therefore deal with some of those practical matters.

Fees were altered--the noble and learned Lord, Lord Ackner, said that it was without any public debate or discussion, and without full consultation, as I understand it, with the Bar Council, the Law Society or the judiciary--on the following scale. On purpose I take examples which I believe will appeal to your Lordships as being of grave social concern. In 1995 and 1996, one had to pay a fee of between £20 and £50 for wardship applications. Those are often applications to protect the physical well-being of youngsters, or to ensure that they

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remain within our jurisdiction, and are cared for in a proper way. From January 1997 the fee to commence the application was £100.

I turn to a debtor's petition in bankruptcy. Your Lordships will appreciate that when a debtor files his own petition, one takes it for granted, if he is an honest man, that he has literally nothing in his pocket; otherwise he would make an offer to his creditors, however small that may be. The fee used to be £20. In order that the debtor can file his own petition, from January 1997 the fee was increased to £50.

Lastly, as an example, would your Lordships take it for granted--noble Lords will have become familiar with this type of case having read the newspapers, if not from having followed it as lawyers would--that someone has been grievously injured for the rest of his or her life by the negligence of a doctor? Will noble Lords take it for granted--let me bear the pain of saying this--that a client of a lawyer has suffered immeasurable damage as a result of that lawyer's negligence? Will your Lordships take it for granted that, when the matter is as serious as I have tried to explain, the damages claimed may well be £100,000 or more? Before a writ could be issued, in October 1995 the fee payable was £100; in 1995-96 it became £120. Before the writ can be issued, since January 1997 a fee has now to be paid of £500.

The people whom I know the noble and learned Lord the Lord Chancellor will have in mind as much as anybody are those who fall just outside the net for legal aid. They are always the people who have the gravest difficulty in using our courts as they are intended to be used. They are the ones in the middle. The very poor are looked after; the very rich can afford it. The people in the middle are those who suffer most. It is in regard to them that I believe your Lordships will be especially sympathetic.

Perhaps I may make a plea to the noble and learned Lord following upon the remarks of the noble and learned Lord, Lord Ackner, in relation to those on income support. They are now exempt. But there are means-tested classes within our community whom I want to mention in particular. They are those in receipt of jobseeker's allowance, disability working allowance, and family credit in those cases which are not family cases by way of the type of jurisdiction that the person concerned is trying to have exercised. If they are family cases, there is an exemption. I want to plead with the noble and learned Lord--although in his case I do not need to be of an unnecessarily pleading mind, because he will have these considerations very much in his concern. I ask that urgent consideration be given to exempting those who, I repeat, are means-tested from the increases that have taken place. Indeed, I want them, as I believe will your Lordships, to be completely exempted. Very apposite quotations were made by the noble and learned Lord. Since he referred to the case of in re Witham, I wish to quote Mr. Justice Laws, who delivered the main judgment in that case. He said:

    "The right to a fair trial which of necessity imports the right of access to the court is as near to an absolute right to any which I can envisage".

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Perhaps I may repeat, very humbly, the words of that very learned judge and hope that the House will endorse that judgment and that the noble and learned Lord will act within its spirit.

6.14 p.m.

Lord Hacking: My Lords, we are all grateful to the noble and learned Lord, Lord Ackner, for introducing this timely debate. It is timely not only because of the vast recent increase--in January this year--in court fees; but also because of the speech that the noble and learned Lord made at the annual conference of the Bar of England and Wales on 28th September last year, a speech to which he referred in his remarks during the Second Reading debate on the Civil Procedure Bill on 5th November last year. Perhaps I may remind the noble and learned Lord of what he said:

    "an incoming [Labour] government would immediately undertake a wide-ranging review both of the reform of the civil justice system and of civil legal aid. That review would include the noble and learned Lord's reports"--

that is, the reports of the noble and learned Lord, Lord Woolf.

    "That remains the position of the Opposition. A rigorous cost-benefit analysis there must be ".--[Official Report, 5/11/96; col. 611.]

Before I go any further, I should declare an interest. I am President of the Civil Court Users' Association, formerly the County Court Users' Association, which is chiefly concerned with consumer judgments and debts. I therefore much look forward to hearing where the noble and learned Lord is on this immediate, wide-ranging review of the civil justice system.

I believe that the noble and learned Lord, Lord Woolf, and his colleagues have put their finger on the right button. In its interim report, the Woolf Committee stated:

    "The problem of cost is the most serious problem besetting our litigation system".

In Chapter 7, on page 78 of the final report, the noble and learned Lord, Lord Woolf, and his colleagues said:

    "Fear of costs deters some litigants from litigating when they would otherwise be entitled to do so and compels other litigants to settle their claims when they have no wish to do so. It enables the more powerful litigant to take an unfair advantage of the weaker litigant. The scale of cost per case has an adverse effect on the scope of the legal aid system. It also adversely affects the reputation of our civil justice system abroad".

The cost of litigation has therefore been a subject of increasing concern since I began practising some 34 years ago, and in recent years it has been of escalating concern.

The noble Lord, Lord Mishcon, referred to some of the increases. I should also like to point with some particularity to them. Prior to October 1995, the fee for a divorce petition was £40; from January 1997 it is £150. Then there is a new fee for amending that divorce petition of a further £50. Prior to October 1995, the fee for a county court summons was £80; it can now go up to £500. As the noble Lord, Lord Mishcon, said, a High Court writ prior to October 1995 was £100; it is now up to £500. The fee for the debtor's petition, a point also mentioned by the noble and learned Lord, Lord Mishcon, has risen from £20 to £50.

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This increase in fees also has a cumulative effect. Let us take as an example a summons in the county court for a claim of between £50,000 and £100,000. Prior to October 1995 there would have been a fee on that summons of £80; then, perhaps if the litigant wanted to have some interlocutary hearings before the district judge, the cost would have been £10 per hearing; if there were three of them the cost would have been £30; and with the hearing before the judge the total would have been £210. From January 1997 the cost of the summons has risen from £80 to £300; the fee for the three interlocutary hearings has risen from £30 to £90; the hearing before the judge has gone up to £150; and the setting down for a trial, which is a new fee, is £100. The total is £640.

What is therefore the impact? It might be said that a litigant is in the big business of litigation if he is claiming something between £50,000 and £100,000, which carries a court fee of £300. It might also be said that a litigant is in the big business of litigation if he has a claim in excess of £100,000. That is not necessarily the case. As the noble Lord, Lord Mishcon, pointed out, someone with personal injuries--a quadriplegic or someone with brain damage--may have injuries valued at well over £100,000.

Take another example of a lorry which crashes into a village shop whose owners are either not insured or under-insured. The damages to the fabric of the building, to the business and perhaps for personal injuries can amount to well over £100,000.

Let us also look a little more precisely at the cost of divorce proceedings. The cost is £150 and another £50 for amending the petition, on top of all the other costs that rain on a person going through divorce proceedings, including the cost of running two households. These court fees are hardly an inducement to litigants to end unhappy marriages.

Not only were these increased fees announced in January this year, but there were rumours last year of daily hearing fees, of £800 in the county court and £2,000 in the High Court. If those fees were introduced and passed into pensions and salaries for judges, the noble and learned Lord, Lord Ackner, would never need to raise again in your Lordships' House his well known concerns over judicial salaries and pensions. An enormous increase in court fees would result.

I hope, therefore, that the noble and learned Lord the Lord Chancellor will be able to tell your Lordships' House that there are no such plans for daily hearing fees.

As the noble and learned Lord, Lord Ackner, said, the great importance of this debate--whether the litigant should pay the full cost of the administration of justice in our courts--is that it has never been considered and debated in Parliament. If the litigant does not undertake the full cost, then the taxpayer to some extent subsidises access to justice. But he and we should do so, particularly if to do otherwise would be a deterrent or a denial of access to justice.

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