Civil Proceedings and Family Proceedings Fees (Amendment) Order 2015

Lord Beecham Excerpts

Wednesday 4th March 2015 Lords Chamber

If you wrap yourself in Magna Carta, as Mr Grayling sought to do last week at the Global Law Summit, you are inevitably and rightly going to invite scorn and ridicule if you then throw cold water over an important part of our legal heritage. I beg to move.

[Lord Beecham (Lab)]

My Lords, last Thursday, my noble friend Lord Howarth asked a Question about the subject of the Order and the Motion of Regret that we are debating tonight. In my follow-up question, I asked why, in the light of the 80% decline in the number of employment tribunal cases since the imposition of charges—quite contrary to the Government’s predictions—we should accept the Government’s assurances that there would be little or no effect on access to justice from this measure. The Minister’s reply, apart from the mantra which all Ministers are programmed to repeat about the Government’s so-called “long-term economic plan”, was interesting. He conceded that:

“As a result of a relatively modest fee”—

in employment cases—

“there has been a significant decline in the number of claims brought”.—[Official Report, 26/2/15; col.1763.]

Perhaps he could tell us just how much money it was predicted would be raised by those fees, and how much has actually been raised. Then perhaps he could explain why increases in fees of up to some 600% in the civil courts, which could not conceivably be described as “relatively modest”, will have little or no effect on the number of cases brought there.

How do the Government respond to the withering criticism by the senior judiciary in its response to the initial consultation in February 2014, which described,

“the research so far undertaken”,

as,

“clearly inadequate to assess the … consequences … on the ability of parties to afford access to the courts and on their willingness to do so”.

The Government’s response to part 2 of the consultation on their proposals, published in January this year, is instructive. At paragraph 38, they noted that:

“A number of respondents … disagreed with the proposal”.

Is it too much to ask the Minister how many? How many did agree with the proposal?

I should note and welcome in parenthesis that, as the Minister has pointed out, the Government did at least change their position on family law and commercial cases. However, the response contains one paragraph that merits a Nobel prize for circularity. Paragraph 46 recognises that,

“some respondents were concerned that the fees bore little resemblance to the cost of proceedings. However, under the powers contained section 180 of the Anti-social Behaviour, Crime and Policing Act 2014, court fees are not limited by the cost of proceedings”.

So that is all right then.

As we have heard, the Government airily dismiss the suggestion that the proposed fees,

“could lead to difficulties in some people being able to access the courts”.

Who, upon what evidence, supports that view? Not the Lord Chief Justice, on behalf of the senior judiciary, who, in his letter of 19 December, which the noble Lord, Lord Pannick, has already mentioned, refers to the two exercises purporting to constitute research into the proposals and which are reflected in what passes for the impact assessment. He draws particular attention to the effect on SMEs and litigants in person. The Lord Chief Justice reiterated that the 2013 research was based on only “18 telephone interviews”—presumably carried out in similar fashion to the cold calls with which we are increasingly and irritatingly familiar. The latest research involved 31 users, of whom all of 12 related to claims for more than £10,000, which is the level at which the fees are levied at 5%, which amounts, as we have heard, to £10,000 for large claims of £200,000. That represents an exponential increase of something around 600%.

Other bodies have made their strong views known, as the Minister acknowledged and as was referred to by the noble Lord, Lord Pannick. The Civil Justice Council, in its response in December, identified,

“a disproportionately adverse effect on some groups e.g. small and medium enterprises, low income individuals … thereby undermining equality before the law”.

As we heard from the noble Lord, Lord Pannick, an application has been made for a judicial review of the order by nine institutional claimants, equally expressing their great concerns. Eleven different professional organisations draw particular attention to the potential impact on individuals with clinical negligence or personal injury claims; on small unincorporated businesses, where they forecast a drop of 35% in claims; and on SME companies—that is, limited companies—a drop of 49% in claims. They also draw attention to the possible impact on actions for recovery and insolvency cases, which could, ironically, rebound indirectly on the taxpayer.

The leading solicitors firm Fieldfisher, which acts in high-value, usually personal injury and medical negligence claims, supplied an interesting perspective on the implications of the order. I ought to declare an avuncular interest, as my nephew is a tax partner in that firm. It points out that whereas after the Woolf reforms solicitors usually funded disbursements, including court fees, that cost would rise to millions of pounds per annum. Few people could afford a £10,000 payment and most solicitors will be unable to fund their clients’ actions. They point to fears of a negative impact on mesothelioma claims, where speed is of the essence. They conclude that the proposal,

“tips the balance further in favour of the Government and corporate interests in whose interests it is to delay, frustrate and deter access to justice and access to compensation. It encourages Defendants to make early low offers before proper investigation of the case and to continue to unreasonably deny liability”—

their split infinitive, not mine. This comes not from a niche, left-wing human rights firm of the kind so abhorrent to the Lord Chancellor, but from one of the City’s leading firms, which proclaims itself,

“more than just a European law firm, specialising in providing commercial solutions across industries and sectors”.

Members may also have had sight of three letters sent to the Law Society by three different people seeking to recover, for them, substantial sums and facing under these proposals fee costs of £5,000 in two cases, and between £2,600 and £3,200 in the third, which they simply cannot afford precisely because of the losses incurred which are the subject of their claims. One also has to ask what consideration has been given to the possibility of claimants resorting to alternative methods of dispute resolution at a potentially lower cost to them, with a consequent impact on the income for the Courts Service?

There may be a case for full cost recovery. The Minister, in opening, referred to that as if it were the main point at issue, but of course it is not. The real issue here is the fact that the Government are going for more than full cost recovery. It is perhaps arguable that there may be some categories of cases where that might be justified, but might the Government be contemplating other such approaches by analogy, for example in relation to criminal cases or to damages in road traffic and personal injury cases, where defendants can already be required to meet the cost of NHS treatment afforded to the claimant? If more than full cost recovery is legitimate in the court area, might it not be argued that to help with the growing cost of the National Health Service and the demands for extra funding, more than full cost recovery from those who injure people who therefore have to undergo NHS treatment should be levied in those areas? Will the Government disavow any such intention, or is it perhaps in their mind to expand this principle of more than full cost recovery to other areas than those that are the subject of these regulations?

Tonight we will doubtless hear from noble and learned Lords, although not too many—there are only about a couple now present in the Chamber—and we look forward to it. They have a lifetime’s experience of the operations of the courts and a profound attachment to access to justice. We have already heard from one distinguished practitioner, and I dare say we will hear from two more before the evening ends, also troubled by the potential implications of this ill thought out measure. It is not too late for the Government to pause, reflect upon and reconsider these proposals, even if the order is affirmed today, as undoubtedly it will be. It would surely be appropriate to do so in any event when such a controversial measure comes so close to the end of a Parliament.

I urge the Government, before implementing the order, to commission further work in conjunction with the Civil Justice Council to examine in greater detail the implications of their proposals as presently cast and the impact that is likely to ensue, and to listen with care to the advice of those whose wisdom and experience should guide any decisions with the potential significantly to impact on access to justice, the very cornerstone of our legal system.