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6.23 p.m.

Earl Russell: My Lords, in thanking the noble and learned Lord, Lord Ackner, for introducing this Question, I am not merely making a conventional remark. It seemed that this debate was originally going to fall to me. I persuaded the noble and learned Lord to introduce it on the ground that he would do it better. I should like to thank him not only for doing so but also for proving me right.

I should also like to congratulate the noble and learned Lord on the Woolsack. I think that this is the first time that we have exchanged words in a debate since his arrival there. We have so far tended to have the good fortune to agree and I hope that that will continue.

I appreciate that I am criticising measures which the noble and learned Lord was not responsible for introducing. I hope he will not reply with the words used about Parliament by King James VI of Scotland and I of England in an unguarded moment of bad temper: "I found it here when I arrived so I am obliged to put up with what I cannot get rid of".

I hope that the noble and learned Lord will take a rather wider view of the subject. If his right honourable friend the Chancellor of the Exchequer should say to him that he cannot afford the cost of changing this measure, I hope that the noble and learned Lord will ask him to consider the cost of not changing it. This Government have so far been much better than their predecessor in considering the cost of not spending money as well as the cost of spending it. I hope that the noble and learned Lord will not allow the first exception to that improvement to arise in his own department.

A long time ago, when I was an undergraduate, I took part in a large protest march. We passed through a medium-sized county town where the town council decided to forbid the marchers to use the town's public lavatories on the ground that, if they did so, they would cause a mess. Fortunately, the council was at the last moment persuaded that it would cause a great deal more mess if they were not allowed to use them. Similarly, I believe that, if the Government do not change the policy on these fees, it will cost a great deal more than if they do.

The noble Lord, Lord Mishcon, quoted to us the words of Mr. Justice Laws, in which the learned judge spoke for his predecessors and our ancestors. When our medieval predecessors fought so strongly for the principle of access to the courts, they did so because they knew very well what people would do if they did not.

When John Lilburne's father was the last man but one to claim trial by battle in English law, he did so because his opponent had burned down his house with his evidence inside it. I recall the right reverend Prelate the Bishop of Liverpool making precisely the same point in a memorable plea for the law centre in Liverpool, Toxteth. We must encourage access to the courts because we know what people will do if they do not have it. It is a live tradition and it deserves a hearing.

I have had experience of the introduction of full cost fees in another context, in the photographic service in the Public Record Office. It caused such astonishment

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among the customers of that office that those managing it were finally reduced to displaying a Hansard page reporting a Starred Question in your Lordships' House, in reply to which the then Lord Chancellor explained that the costs covered the whole costs of the office. That was done because the office was becoming extremely unpopular as a result of collecting those costs. It is not in the public interests that our courts should become unpopular in that way.

It is clear as far back as records go that the maintenance of the courts is one of the Crown's basic responsibilities. Judges' salaries have been paid out of the Exchequer even at moments of greatest poverty in the Crown's experience. Nothing like the present proposal has been carried out, even in the reign of King Richard I, who, according to his critics, would sell his grandmother if he could be sure to get a good enough price.

This is a tax increase. The noble and learned Lord should perhaps portray it as the twenty-third increase introduced by the previous government.

It applies to all sorts of things. It is said that worse will happen if there is not this increase. There is a Treasury guideline to the effect that any Minister of the Crown proposing a saving on his departmental budget must consider the resource implications for other departments. I do not know whether the noble and learned Lord can discover how far that was done in the introduction of this measure, but I am a little curious as to how the calculations might have been carried out.

Civil disputes easily turn to fighting if there is no resolution in the courts. People notoriously do not obtain a divorce if it is too expensive, which leads to a confusion of matrimonial relationships, differing from partnerships. Noble Lords will understand what I mean if I say that this could almost be described as Sadducean legislation.

As regards debt, the remarks of the noble Lord, Lord Mishcon, about bankruptcy are well taken. His remarks about compensation bear on actual cases. There are people who are entitled to large sums of compensation who, for the lack of a few pounds to begin proceedings, will never get it.

It applies also to eviction. In one case it was avoided because the citizens advice bureau in North Yorkshire paid the court fee out of a charitable fund of its own. But that cannot be a regular policy. Does anyone really suppose that the cost to the Government of eviction is ever as low as £10 per case? The arithmetic is a little curious, especially when we take into account the £14 million increase in the legal aid budget. That is what the noble Baroness, Lady Thatcher, used to describe as "churning". It is an exhausting and expensive activity.

We should also consider the effects on the benefits system. I am extremely surprised that income-based jobseeker's allowance has not been included under the terms of Mr. Justice Laws's judgment. The court which decided that did so on the ground, mistaken in point of fact, that it was more than income support. It makes my point that no appeal was possible because the fees could not be afforded. That creates injustice to other people as well as the particular litigant.

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It is also a great concern to the Chancellor of the Exchequer and the Department of Social Security to eliminate poverty traps from the benefit system. There are far too many cases in which people who get into work are worse off than when they were on benefit because of the loss of a whole series of means-tested privileges. These fees add just one more to those privileges. I do not see why they do not apply to family credit or to disability working allowance.

If the Government do not intend to scrap those fees--as I believe, with proper costing, they probably would--I hope they will refer to Mr. Martin Taylor's review of poverty traps in the benefit system, which I welcome. The reason why it should go to such a review is that what is important is that the steps in costs as a person comes off benefit should not all happen at the same place. Otherwise there is a mountain. So they should be considered by somebody who is considering the other poverty traps. Instead of having steep steps, they should be spaced out, like a ramp for wheelchair users. Then people can come up a little further. I think that is something which only Mr. Martin Taylor can do.

We are told that it is difficult to deal with anything of this kind. But the Government do have certain basic duties. Doing justice is one of them; defending the realm is another. The noble and learned Lord was in the House at Question Time when the noble Lord, Lord Gilbert, answered the noble and gallant Lord, Lord Craig. Speaking on the Eurofighter, he said that the defence of the realm was one of "the" basic duties of government. Doing justice is the only duty which comes on a level with that.

In 1637 in the Ship Money case, Lord Fynch, Chief Justice of the Common Pleas, said that if an Act of Parliament were to enact that the King should not defend his kingdom it would be void. That never came to judgment. It was not tried. I do not know, if there were an Act to say that the Queen should not do justice, whether it would equally be void. I should rather not find out.

6.34 p.m.

Lord Meston: My Lords, the starting point and the governing principle for this debate must be the maintenance of effective access to justice. That is a basic right which is provided and guarded with equal force, both by the common law and by the European Convention for the Protection of Human Rights.

In the Witham case, the divisional court held that the 1996 amendment order impeded that right. Even without that trenchant decision of the divisional court, fee increases of that kind of level would have caused uproar, if they had been applied to, say, car tax or prescription charges. Today's debate has given an opportunity for the new Government to indicate whether matters are to remain in the unsatisfactory state left by the Witham case or whether there has been--or, at least, whether there will be--a more thoughtful review of the structure of court fees and the underlying policies and targets for any such structure. That is a review which should take place against a background of developing civil justice reform. In that context I am very glad that the noble and

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learned Lord, Lord Ackner, quoted what the noble and learned Lord, Lord Woolf, said in his interim report about court fees.

The noble Lord, Lord Mishcon, characteristically selected an appropriate quotation from the Old Testament about reasoning together. Like many noble Lords participating in this debate I have been trying to grapple with what is the underlying rationale for any structure of court fees, particularly as it is a subject about which I suspect that most of us have not had to think very profoundly until, all of a sudden, there was this enormous uplift and an adverse decision, from the then Government's point of view, of the divisional court.

I am by no means sure that it is possible to reconcile effective access to justice with a full cost recovery, which was the policy of the last government. I suspect that, among other noble Lords, I am not the only one who has received the useful briefing material provided by the Legal Action Group which tells us something of what happens in other countries. It says:

    "The proposal to raise the full cost of the courts through fees has been rejected in both the United States of America and Australia. The Judicial Conference of the United States discussed whether court fees should be raised to meet the running costs of the courts and rejected the idea. In Australia, a Government-appointed committee recommended: 'that fees should neither encourage nor be perceived as encouraging decisions by court administrators designed to maximise revenue. Accordingly, we are firmly of the view that there should be no budgetary link between revenue raised by the collection of fees .... and the appropriate use of monies'".

I suggest that it is necessary to ask whether full cost recovery is the policy of this Government and, if so, how that will operate in practice. For example, how will it operate as between the charges for issuing formal pieces of paper--which is what we have been discussing today--and charges for subsequent use of the court facilities once the necessary pieces of paper have been issued? That was a point raised by the noble Lord, Lord Hacking.

If full cost recovery is still the policy, what practical account is to be taken in the future of the impact on potential litigants of negligible or modest means? If full cost recovery is not the objective of the present Government, what is their policy and its rationale as between different categories of case and different categories of litigant; and what future uprating can be expected?

The present situation is unsatisfactory for a number of reasons: first, it does not give automatic exemption to those in receipt of benefits, apart from income support--a point made by my noble friend Lord Russell, and the noble Lord, Lord Mishcon; secondly, the undue financial hardship test creates uncertainty and takes time; and, thirdly, it bears hardest on those who are poorest, even if just above income support and legal aid limits.

In the Witham case, Mr. Justice Laws said:

    "It is clear on the evidence before us that there is a wide ranging variety of situations in which persons on very low incomes are in practice denied access to the courts to prosecute claims, or, in some circumstances, to take steps to resist the effects of claims brought against them".

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It may be said that the right of access to justice is not an absolute right. Nor is it; yet for most people, litigation is a last resort and, for many people, it is not a choice. Statistics show a decline in the number of civil cases being started. There is, quite properly, a growing emphasis on mediation and alternative dispute resolution. Apart from that, responsible lawyers always try hard to keep their clients away from the court, pushing them sometimes reluctantly to compromise and impressing upon them with firm advice the costs and hazards of litigation. Yet there will always be cases which need quick and easy access to the courts, sometimes urgently, and there will always be other cases in which a negotiated settlement can only be achieved in practice with litigation concurrently progressing to trial and concentrating minds.

Because some proper rationale for court fees is required, it perhaps does not help to focus the argument on particular categories of case, nor to try to compare or rationalise the different categories of case--for example, the fee for a bankruptcy petition, or that for a road accident claim, although, very properly, attention has been drawn to the enormous increases in those particular types of case. However, the public, and the court service itself, have an interest in compromising disputes. So why does there have to be a fee for amending a divorce petition? That usually reflects the fact of a compromise to enable a civilised end to a marriage on an agreed basis. Why does there have to be a fee for a consent application for ancillary relief following divorce? Likewise, that would normally reflect a cost-effective compromise rather than hostile litigation.

Finally, access to the courts for the protection of children should be the least impeded part of our system. Obviously children need to be protected--a point well made by the noble Lord, Lord Mishcon--but it is also the form of litigation least likely to be covered by any form of insurance on either side, and in which it is least likely that the costs will be recouped from the other parties to the litigation. Surely a nominal fee, if any, is all that is appropriate.

Another category upon which I focus briefly is adoption. There is, as we have heard, an increased fee for an adoption application. Surely adopters, or prospective adopters, have more than enough hurdles already to overcome before they reach court, and once they get to court after the court process has been initiated. It is wrong to have a substantial fee for an adoption application, whether that bears upon the pocket of the individual adopters or upon that of the limited funds of the adoption agencies which support them.

Those cases are of course about access to justice, but they are about something much more. They are examples of situations in which the court is providing a public service, which any decent society would afford to its citizens for no more than a nominal charge.

6.43 p.m.

Lord Kingsland: My Lords, I regret that my noble and learned friend Lord Mackay of Clashfern is unable to speak in the debate. I am sure that he will take an

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early opportunity to bring his immense intellectual and moral authority to bear on this topic. I thank the noble and learned Lord, Lord Ackner, for bringing this subject to the attention of the House. Perhaps I may suggest a few principles upon which the noble and learned Lord the Lord Chancellor might base the decisions that he will soon have to make on it.

First, the noble and learned Lord should endorse in its entirety the judgment by Mr. Justice Laws in Witham. Secondly, he should endorse the principle so eloquently explained by the noble Earl, Lord Russell, that the administration of justice is a matter for the taxpayer. That is not merely an important constitutional principle; it makes good economic sense. The vast majority of people do not use the courts. On the other hand, it is in their interests that the courts are there, just in case they want to use them. It seems to flow logically from that that they should pay for the fact that the opportunity is available if they wish to use it.

A further principle that I should like to emphasise is that any decision that the noble and learned Lord the Lord Chancellor makes about the structure of fees should wait until Sir Peter Middleton reports on the whole question of financial assistance to litigants; and, in turn, his views, which we eagerly await, about the implementation of the Woolf Report. One cannot make an objective assessment about the structure of fees in courts without also taking a view about the provision of legal aid, and, indeed, the whole running of court services. They have all to be seen together. I should not expect the noble and learned Lord the Lord Chancellor to come to any conclusion about the subject matter of the debate until well into the autumn.

I have something to say now--not very much your Lordships will be delighted to hear--about the structure of costs themselves. Given the fact that they will pay only for the cost of litigating, and not for the administration of the courts or the judges' salaries, considerable thought could still be given, with benefit to the--if I may put it this way--shape of the structure; for example, if one looks at most county court actions, the plaintiff wins a high proportion of them. Yet it is the plaintiff who seems to bear the initial costs. There are certain circumstances in which defendants behave rather badly. In those circumstances, why should they not have to put their money up first before their pleadings? That leads me to think that a greater degree of discretion should lie in the hands of the masters and the judges in taking decisions about the costs of interlocutory proceedings.

My other thought about the structure of costs is that at present they seem rather front-loaded--as the financial experts in the City say. The further into an action one gets, the higher the costs. At the moment the burden of costs seems to fall earlier rather than later in the procedure. Those are reflections which the noble and learned Lord the Lord Chancellor, I hope--I say this with due deference--will take into account when he applies his mind to the whole picture.

He has a difficult task in front of him. Treasury Ministers must be putting great pressure on all departments of government, including the noble and

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learned Lord's, to keep down costs. He will have a big internecine battle to fight with his own colleagues in the Cabinet. If he sticks to the principles that have been so well outlined by so many noble Lords today, and stands up for them when it really matters, we will make real progress on what is, after all, an absolutely central constitutional issue.

6.48 p.m.

The Lord Chancellor (Lord Irvine of Lairg): My Lords, I welcome the kind words at the outset of the debate of the noble and learned Lord, Lord Ackner. His one-man opposition to the previous administration on issues concerning the administration of justice was one which the official Opposition, before the general election, from time to time joined. I hope that we may continue as allies generally, but I cannot undertake always to agree with him. I fear that this may be one of those occasions, but I hope that much that I am about to say he will find encouraging. I hope, too, that the views I express in the debate will satisfy the noble Earl, Lord Russell, that I have taken a wider view than my predecessor, though he, too, may not agree with everything that I am about to say.

The question in terms confines itself to the case which makes the strongest appeal: to protect the constitutional right of the litigant of modest means from the impact of new and increased fees. I expressed in your Lordships' House on 27th January this year my concern about the position of a family on income support unable to pay the £10 fee that was formerly required to reschedule a rent or debt obligation. I urged my predecessor to reverse his decision to remove exemptions and remissions. That decision of my predecessor came into effect on 15th January 1997, but in fairness to him--the point has already been made by the noble and learned Lord--I should add, with the concurrence of the higher judiciary who signed along with him the necessary fee order. Without their consent these changes could not have been made in the High Court. As a new Lord Chancellor, I hope that I will not be convicted of schadenfreude if I say that the fact that my predecessor could, with the concurrence of the Heads of Division, sign a statutory instrument which the courts in due course held to be ultra vires gives me a little confidence for the future, although I, of course, cannot guarantee to do any better.

My view, expressed in your Lordships' House, was supported by the Divisional Court in the Witham case, so I would say to the noble Lord, Lord Kingsland, with respect, that I really have no need to endorse it. My position was well known before that court ever gave judgment. Its judgment was not appealed by my predecessor. It reinstated exemptions and remissions in the Supreme Court. Subsequently, my noble and learned predecessor also reinstated them in the county courts and in family proceedings.

It is right that those caused undue hardship by a requirement to pay fees should be protected; and they now are. I could not personally accept any other proposition, as I made plain from the Opposition Front Bench in January. At the same time, of course, the legal aid fund helps those who are eligible by meeting their

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court fees and--an incomparably greater burden--by meeting the cost of their legal representation. And there is a general discretion, under paragraph 5(3) of the 1980 order, to reduce or rescind any fee where it appears that payment of it,

    "would involve undue financial hardship because of the exceptional circumstances of the particular case".

I could treat that as an entirely satisfactory answer to the noble and learned Lord's Question, and I could now sit down; but I do not propose to do so. Lurking beneath the Question on the Order Paper, although not in terms asked, is another question: whether fees should be charged at all to those using the civil courts. In a democracy governed under the rule of law there must be a court system. I accept, of course, that citizens have what may be called a constitutional right to a court system. They enjoy that right. However, I do not accept that they have a constitutional right to a free court system. Those who claim that claim too much. What the state provides free, or at a charge, is a matter of policy for government. They have to determine priorities in the allocation of scarce public resources. Those who argue for free access to the courts in all cases say that no issue of policy arises--no discretionary decision how to allocate scarce public resources--because they attach the label "constitutional" to the right for which they contend. The real question is whether they are correct to do so.

I would not, for example, accept that a citizen has a constitutional right to free medical services in all cases, although a powerful argument can be made that the state should give a high priority to the provision of free medical services; and it does.

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