Non-Contentious Probate (Fees) Order 2018

Debate between Baroness Altmann and Lord Mackay of Clashfern

Tuesday 18th December 2018 Lords Chamber

[Lord Mackay of Clashfern (Con)]

My Lords, noble Lords will not be surprised to hear that I have been in this area before. Indeed, in my time there was a very serious question as to whether the courts service should be dealt with at all by fees. It was thought that it was a public service for which the taxpayer should pay. However, that contention has gradually passed away. The only occasion on which I was overturned in judicial review was in relation to a fee that was being charged under regulations which were signed as approved by the heads of division as well as myself. Notwithstanding all that, we did not succeed: the Divisional Court held that our fee structure was slightly defective and we immediately tried to put it right. An interesting result of that, which I must say is dear to me, about the administration of justice at the time when I had responsibility for it, was that the advocate, the barrister who defeated me and the others in the court, was nominated for silk shortly after and wrote to me to say how fair the system seemed to be.

The point as I see it is that the ordinary rule is that an amount charged as a fee which is substantially more than the cost of the service would be a tax, unless authorised by statute. That is where Section 180 comes in, as has been very clearly explained. Exactly what is done about it is a matter of discretion given to the Lord Chancellor. Here, there is a distinction between the bigger estates and the small estates justifying that kind of approach, which my noble friend Lady Browning referred to. She is a bit anxious about the middle and might prefer to see the bigger bit at the top and a smaller bit at the middle. However, I am not going to enter into that; I am just saying that it is quite impossible, in my view, to say that this is unconstitutional. The matter is one for the discretion of the Lord Chancellor and I entirely agree with the view that the courts service urgently needs as much money as it can lawfully get.

[Baroness Altmann (Con)]

My Lords, I understand the concerns expressed by noble Lords, but I also believe that these measures deserve support. I declare an interest as an executor of the estate of a relative who would need to pay these higher fees. Nobody likes the idea of paying fees but someone has to pay for the courts system and, as the noble Lord, Lord Pannick, and my noble and learned friend Lord Mackay have both explained, as have other noble and learned Lords, this is a valid use of ministerial powers.

I was critical of the previous proposals in 2017, which seemed to me excessive, but I am delighted that the Government have listened. Some 60% of estates will pay just £250—not that different from now—and 25,000 more of the poorest estates will be lifted out of probate fees altogether. More than half of all estates will pay nothing. If we pass the amendment of the noble Lord, Lord Marks, the entire proposed reforms would fall, so more of the poorest estates would pay higher fees while the largest estates would escape the higher fees. The other place did not oppose this. How will it look if this House prevents a measure that would ask higher-value estates to pay more to help lower-value estates? This money will be ring-fenced and it will help secure access to justice, which is a fundamental British value that has to be paid for.

I understand that there is concern about the level of fees. I think there are times when we have to recognise that there are issues for which cross-subsidies are relevant. In terms of fees, if we look at other areas of the economy, estate agent fees and solicitors’ fees are very often charged as a proportion of the value being transacted, if you like. An estate agent probably does not have to do a lot more work to sell a house worth £500,000 than one valued at £5 million, yet they will be paid much more in so-called fees. So I do think that there is an element of proportionality here. A £500,000 estate will pay £750. The consumer group Which? estimates that an estate worth £500,000 would face enormous legal fees. For example, the bank will charge £20,000 on average; solicitors will charge £10,000 on average; the funeral, which has to be paid for, will cost £5,000 or £10,000, perhaps more. So the idea that the maximum amount of £6,000 is being charged in order to help access to justice for domestic violence victims, mental health review tribunals or social security and child support does not seem to me to be disproportionate. I hope noble Lords will accept the idea that this is a necessary change that fulfils an important social purpose about which the Government are entirely entitled to take such decisions.