Courts and Tribunals Fees

Debate between Robert Neill and Andy Slaughter

Monday 4th July 2016 Commons Chamber

[Robert Neill (Bromley and Chislehurst) (Con)]

It is a great pleasure and a privilege to speak to the motion and raise the issue arising from the report by our Select Committee. This is the first time that one of our Committee’s reports has been debated on the Floor of the House in this way.

I begin by expressing my appreciation to all the members of the Committee for the constructive and diligent way in which they have approached the work of the Committee and this report in particular. It was undertaken in an entirely collaborative and non-partisan spirit. As is perhaps appropriate for anything that touches upon the law and justice, we have endeavoured throughout to base our conclusions on the evidence that has come before us. I am grateful for that. The report was agreed unanimously, and I hope that that will weigh with the House and with Ministers when they consider it.

We had significant assistance from the evidence, both written and oral, that we received from witnesses. It is particularly worth noting that in this case we were assisted by the evidence of very senior members of the judiciary—the Master of the Rolls, the president of the family division, and the senior president of tribunals. When they speak, their views ought to carry very considerable weight indeed.

There is no doubt that over the past few years, fees for litigants bringing cases have spread and increased across our civil courts, the family courts and tribunals, and there have been a number of proposals for further increases. When we set up the inquiry, we identified four objectives to be looked into. First, how have the increased court fees and the introduction of employment tribunal fees affected access to justice? How have they affected the volume and the quality of cases brought? Secondly, how has the court fee regime affected the competitiveness of the legal services market in England and Wales, particularly in an international context? Thirdly, we particularly wanted to look at the effect on defendants of the introduction of the criminal courts charge, about which I shall say more. Fourthly, we wanted to examine the impact of the increases in courts and tribunals fees announced in “Court and Tribunal Fees”, Cm 9123, published on 22 July 2015, and subsequent proposals.

I am grateful to the Government for moving swiftly on the criminal courts charge. The evidence was clear that it did not work and was, if anything, counterproductive, arguably costing as much to administer as it would ever bring in. We therefore decoupled the issue from the main part of the report and brought it forward swiftly. I am grateful to the Government for their prompt response and for moving to accept our recommendation and abolish the charge.

In fairness, the Secretary of State for Justice and his ministerial team deserve great credit for that. We should not criticise politicians when they are prepared to change their minds. I think it was John Maynard Keynes who famously said, “When the facts change, I change my opinion.” The Government listened to the evidence and removed the criminal courts charge. I hope they will be as expeditious and responsive on a number of the other matters we raise in the report—as a West Ham supporter, I am always an optimist.

[Andy Slaughter (Hammersmith) (Lab)]

I compliment the hon. Gentleman on an excellent report, but would it not be fairer to say that the Secretary of State changed? I do not know whether that is one of Keynes’s principles. The facts did not change at all; some light was suddenly shone on what was always a mad scheme, and a change came about. However, I do not want to detract from the credit that is owed to the hon. Gentleman’s Committee.

[Robert Neill]

I am grateful to the hon. Gentleman for the spirit in which he made his contribution. I am a friend of the current and the former Secretary of State, and giving credit to those who responded to the evidence is perhaps the appropriate and balanced way to deal with the issue.

It is worth looking at a little of the chronology of one of the matters I am going to turn to. As well as having significant witnesses from the judiciary, we heard evidence from the trade unions, the business community, the Bar Council, the Law Society and a number of individuals and interest groups. We had four oral evidence sessions between November 2015 and February 2016, the last of which was on 9 February, when we heard from the legal profession and then from the Under-Secretary of State for Justice, my hon. Friend the Member for North West Cambridgeshire (Mr Vara).

We then waited, because we were anticipating the promised post-implementation review of the impact of employment tribunal fees, which had formed an important part of the evidence that was put before us. We knew that the review had been commissioned some time back, so we waited—and nothing came forward. In the end, on 25 April, the Under-Secretary of State for Justice, my hon. Friend the Member for Esher and Walton (Mr Raab), who is on the Front Bench and who had taken over responsibility, courteously responded, but he was unable to give any indication of a publication date. I have to say that we do not regard that as satisfactory.

It was against that background that, rather than waiting for the two months the Government normally have to reply to a Select Committee report to lapse, we thought it right to bring our report to the House today in this estimates day debate.

--- Later in debate ---

[Robert Neill]

That is why we made the point that we need to have a much better evidence base before we go forward with like increases in other areas. We did not rule out the fact that a fee may be appropriate in some cases, but we need better evidence to know the proper level to pitch it at and whether there are any unintended consequences—whether it will deter not just unworthy claims, but, as we fear, meritorious claims as well. A particular concern raised was that the employer and the employee claimant would get into a war of attrition, depending on who has the deepest pockets. That is not really consistent with the “equality of arms” argument that we have always regarded as being central to our justice system. Funnily enough, it may tend to make cases more protracted than they need to be, when the swiftest and earliest possible settlement would, as a general rule, be in everybody’s interests. I am grateful to the hon. Gentleman for his point. We were much assisted in our inquiry by evidence on the matter from the Law Society of Scotland, and we are grateful for its assistance.

Against that background, we made all due allowance for the fact that there has been some change in the substantive law, for the improving economic situation, for the previous downward trend in tribunal cases and for the ACAS conciliation schemes. Those things could account for some of the drop, but we were looking at a drop of about 70%, and we found no evidence to suggest that it was accounted for entirely or substantially by those matters, so we were led to the conclusion that the clear majority of the decline was attributable to the level of fee. That is why the matter needs to be looked at seriously and we need the factual information immediately.

We set out certain indicative thoughts about the sorts of changes that might be made; they are indicative because we do not have the evidence to go further than that. We think that this is an important issue, which really cannot be kept back for much longer.

[Andy Slaughter]

I commend the hon. Gentleman on many of the recommendations in the report, but—as I would, I suppose—I want to highlight one that I think is slightly problematic. The Justice Committee went along with the decision of the independent commission on freedom of information to disallow appeals from the Information Commissioner to the first-tier tribunal, despite the fact that 20% of those appeals are successful. Would the hon. Gentleman like to look at that again? The Select Committee stated in its report:

“We see no reason to disagree with the Commission’s view.”

Has the hon. Gentleman simply gone along with the view of the commission? What is his reason for making that decision?

[Robert Neill]

Simply that there was no compelling evidence presented to us to the contrary. We followed the evidence, as we did in the other matters. It is not because we are afraid of pulling our punches; as the hon. Gentleman has seen, we have not pulled our punches in some areas. We simply did not find any evidence to suggest that that assessment by the independent body was wrong.

I will move on quickly to some other matters. There has been particular concern about the impact of employment tribunal fees, but certain other matters have also been brought forward. The April 2015 increase in fees for money claims should, in our judgment, be reviewed. That may seem rather remote and arcane, but it is very important, because it affects the international competitiveness of London and the UK as a jurisdiction of choice, especially for commercial litigation. That is a great strength of this country, and some figures released today by the Legal Services Board highlight its significance. Legal services and their related supply chain contribute something like £35 billion towards this country’s GDP. Legal services exports have increased by some 33% over the past eight years, and something like 10% of the legal profession have instructions from overseas clients.

At the same time, there are pressures on the British jurisdiction and threats to its exclusiveness. We have already seen, in places such as Singapore and Dubai, courts operating on the basis of English common law but outside our jurisdiction. It is worth observing that very recently in Amsterdam, in the Netherlands, an English-language court was established. We should be very wary of biting off the hand that feeds us—or, to use another metaphor, doing anything to kill the goose that lays the golden egg—by reducing the value of the British legal system and its attractiveness to litigants nationally and internationally.

We think that the Government should review the increase in fees for money claims, and they should certainly not resurrect the proposal to double the £10,000 cap or remove it altogether. They were right not to proceed with that when it was originally proposed, but they did not rule it out for the future. We are saying that they should not think about going anywhere near it, at least until they have had a proper review of what has been done.

Another point, which goes back to an issue that has been raised already, is about the increase in the divorce petition fee from £410 to £550. Given that the cost to the state of the average straightforward divorce petition is about £270, that is a mark-up of about 100%. We find it difficult to see how making a 100% profit out of divorce cases can be justified, when it is an entirely captive audience because there is no other way to get divorced than going to the courts. We say very clearly that the increase should be reversed.

Our view was fortified by the trenchant evidence from the president of the family division, the right hon. Sir James Munby. It is pretty unusual for a senior member of the judiciary to speak in such terms to a parliamentary Committee or any other body. Sir James said, rather tellingly, that he was concerned that the Ministry of Justice was

“battening on to the fact that there is a captive market”

and that it was

“putting up the fees until it becomes another poll tax on wheels”.

That is pretty strong language. I would put it slightly differently. We say that there is a risk that it will become a “divorce tax”. That cannot be just and we strongly urge Ministers to look at it again most urgently.

Immigration and asylum tribunals are another important issue. There are concerns over whether our immigration and asylum system and the appeals system are abused. There must be safeguards to ensure that proper cases are properly heard. Someone with a legitimate claim must have a decent chance of challenging the decisions of the state or of any Executive body. Equally, it is in everybody’s interests that weak and unmeritorious cases are weeded out. Nobody has a problem with that. Our concern is that fees have been brought in with remarkable swiftness, without a significant evidence base.

In July 2015, the Government consulted on doubling the fees in the first-tier tribunal from £80 to £160 for an application for a paper determination and from £140 to £280 for an application for an oral hearing. In December 2015, after the consultation, it was confirmed that that would go ahead. Only a few months later, in April this year, a further consultation was brought out, without any review of the impact of the last set of increases, proposing a sixfold increase in the fees in those jurisdictions, so that there was full cost recovery. It was proposed that an application for a paper decision would cost £490 and an application for an oral hearing would cost £800.

We have the same concern that I have raised more than once: there is no apparent evidence base to support that increase. If there were, we might have taken a different approach to it. Making that increase does not seem justified when the people involved are, by the nature of these cases, vulnerable. That is why we express considerable concern over the proposals.

I am surprised that the Government have adopted that approach, given their experience with employment tribunal fees and the criminal courts charge. The idea is to have full cost recovery. The problem is that we are dealing with people who are by their nature—particularly those in the asylum system, but also those in the immigration system—very unlikely ever to have any means to recover even a decent percentage of the cost against, let alone the full cost. The Government will end up in exactly the same position as with the criminal courts charge. They are setting themselves an objective to raise money that they have no hope of raising because the people they are trying to get it from do not have the means—it is getting blood out of a stone. We think that it is pointless to pursue an unachievable objective. That is why we urge the Government to think again.

I have endeavoured to outline what is a detailed report. I hope that it is useful to the House. Given the nature of its technical but important topic, we make no apology for its detail. These are issues that impact not just on our system, but on individuals, because every piece of litigation involves an individual somewhere. The Government have had ample time to consider the report, so I hope that we will have a substantive response from the Minister in which he says when the information will be published, what they will do about the increase in divorce fees, what they will do about the realism or otherwise of moving to full cost recovery in the immigration and asylum chamber, and what they will do about the other significant pieces of evidence that we have detailed in the report. I am grateful for the House’s indulgence.