Courts and Tribunals: Administration Charges

Lord Marks of Henley-on-Thames Excerpts

Monday 16th January 2017 Lords Chamber

[Lord Marks of Henley-on-Thames (LD)]

My Lords, I too congratulate the noble Baroness, Lady Gardner of Parkes, on securing this debate and, I would add, on the eloquent and sympathetic way in which she opened it. The central problem highlighted by this debate, through the rather different approaches of the noble Baroness and the noble Lord, Lord Low, whom I and the whole House commend for the impressive work that he and his commission have carried out in this area, is that less legal aid has meant more litigants in person, while dramatic increases in court fees have restricted access to justice by another route.

Cuts in legal aid, particularly cuts in scope, were bound to lead to more litigants in person but their impact in so doing has been dramatic. This has been particularly severe in family cases, as mentioned by the noble Lord, Lord Low, because most are out of scope. The National Audit Office reports an increase since the LASPO Act in cases with neither party represented of 30% in child contact cases and 22% in family cases overall. Approximately 80% of all family cases have at least one litigant in person, and of course in such cases this is serious, because most litigants come to court when their lives are turbulent and feelings between the parties are highly emotional and often deeply hostile. This does not achieve calm and cool dispute resolution and is certainly not in the best interests of any children involved.

However, in other civil litigation too, judges are daily frustrated at trying to get through their lists efficiently and justly while battling to explain to angry litigants how and where they have gone wrong in the process, as well as trying to understand how parties are trying to put their cases in a way that makes sense in law. So the speed and efficiency of the judicial process have suffered, and inevitably and sadly, so has the quality of justice. At the same time, the cost of cases to the public purse has significantly increased, as the National Audit Office and the Public Accounts Committee have pointed out, diminishing the savings made by cutting legal aid.

To add to the problem, the Government have thrown into the mix increased court fees, increasing the burden on litigants struggling without representation. These are not just fees to cover administering litigants’ own cases, but so-called enhanced fees to pay for running the whole system, allowing the MoJ to make profits in some areas to pay costs incurred in others. Many of us believe that the state has a fundamental responsibility to provide courts to resolve citizens’ disputes in accordance with the law, and to do so free of charge. Even many who do not take that purist view in difficult times believe there is something deeply offensive about enhanced court fees, charged at levels that exceed the cost of administering the cases concerned so as to make the whole court system self-financing.

Furthermore, it was always obvious that introducing very high court fees would reduce the number of cases brought. In 2015, a number of professional bodies assembled evidence which showed that,

“the total value of cases brought by individuals would likely fall by around one-third … under higher court fees. For small- and medium-sized companies it would halve”.

This evidence was in sharp contrast to the complacent and misguided assumptions underlying the Government’s impact assessment of enhanced court fees, which said first that the,

“changes will not affect case volumes”,

that there would be,

“no … detrimental impact on outcomes for … court cases or access to justice”,

and thirdly that,

“there would be no impact on legal services used to pursue and to defend a claim”.

I accept that we were in coalition at the time, but I spoke out against those fees then and make no apology for doing so again now. The Lord Chief Justice and senior judiciary described the assumptions as,

“very sweeping and, in our view, unduly complacent”.

Last year, Lord Dyson, the then Master of the Rolls, gave evidence to the Justice Select Committee, that they were based on a “very limited evidential base” and that he was “extremely sceptical” about them. He described enhanced fees as wrong in principle, and the Government’s preparatory research as “lamentable”.

In practice, the dire predictions of a reduction in case numbers are proving justified. We need more evidence on civil cases generally, but as the noble Lord, Lord Low, pointed out, the immediate 70% reduction overall in employment tribunal claims was severe. Furthermore, there was no increase in the success rate of claims, so one can deduce that fees have not discouraged spurious claims but have only prevented claims, meritorious or not, from being brought.

When Michael Gove was Justice Secretary—before his career took a different direction—he said in the House of Commons that,

“one of the biggest barriers to justice … is costs. Action needs to be taken to reduce costs in civil justice. It is not enough simply to say that the taxpayer must shoulder the burden. We need reform of our legal system to make access to justice easier for all”.—[Official Report, Commons, 26/1/16; col. 145.]

On that issue I agree with Michael Gove. I also agree with the Conservative chair of the Justice Committee, Bob Neill MP, who said in June:

“Where there is conflict between the objectives of achieving full cost recovery and preserving access to justice, the latter must prevail”.


Access to justice has been subjected to a pincer movement of restricted legal aid and increased court fees, which has had the dual effect of deterring litigants and reducing the effectiveness of the court system.

On legal aid, we need an urgent review of the areas in scope to see where the hardship is biting deepest and to relieve it. Social welfare and family cases are two of the prime areas for alleviation. We must make it easier to apply for and to secure exceptional case funding, and we must review the system for applying for legal aid in domestic violence cases to make it more humane and easier to navigate.

On court fees, I suggest there are three things to be done. First, we should be reducing court fees to a reasonable level—never more than the cost of administering claims—to ensure that litigants are not deterred by fees from bringing genuine claims. Secondly, we should be introducing a far fairer fee remission scheme. The present capital and disposable income thresholds are far too low and stop poor litigants bringing genuine claims. Thirdly, we should be looking at spreading fees in civil litigation more evenly over the life of cases—which is done in part already in employment cases—rather than front-loading them, as is done now in civil cases, with huge issue fees and only modest fees later on. The present arrangements deter claims to collect difficult-to-recover undisputed debts and encourage unscrupulous debtors to avoid payment in the hope that the fees will put off their creditors.

These are practical steps, intended to go some way to reverse a steady decline in access to justice under successive Governments in recent decades. The measures I have suggested have cost implications, but they are targeted to address the most urgent crisis points. In the longer term, only a more wide-ranging review will enable us to restore and sustain access to civil justice to the standard we would all wish to see, and to which we all claim to aspire, but which I fear we have painfully failed to attain in recent years.

--- Later in debate ---

[The Advocate-General for Scotland (Lord Keen of Elie) (Con)]

My Lords, I am grateful to the noble Baroness, Lady Gardner, for securing today’s debate on this important subject and to noble Lords for the valuable contributions they have made to the debate.

The Government are committed to ensuring that the justice system continues to be accessible to all, that it deals with disputes fairly and justly, and that it continues to work for all its users. A number of noble Lords, including the noble Baroness, Lady Gardner, referred to the matter of employment tribunals and employment tribunal fees. As the noble Lord, Lord Beecham, noted in his observations, that has been the subject of a review at the instance of the Government. That review, which was essentially to address the issue of applications in light of the fee matters, the impact of the reduction of fees on the employment tribunals, and indeed on the employment appeal tribunal, has made very good progress. We expect to publish the results of that review in the very near future. I regret that I cannot be more specific at this stage, but I hope the noble Lord, Lord Beecham, will accept that it is our intention to publish as soon as we reasonably can. That is anticipated to be in the near future.

It is appreciated that the number of employment tribunals has reduced since the introduction of fees, but I note that the introduction of fees was coincidental with the development of the mediation services in the context of employment applications. Therefore, one cannot simply attribute any reduction to fees being introduced in that respect. It would not be appropriate for me to anticipate the outcome of the review that has been carried out and which is to be published in the near future.

[Lord Marks of Henley-on-Thames]

Has any work been done to assess how far there is a match between the increase in mediation services and the drop in claims?

[Lord Keen of Elie]

As I said, I would not want to anticipate the outcome of the review, and we will look at the matter in light of that review once it is published.

I turn for a moment away from employment tribunals to the matter of the property law issues raised by the noble Baroness in her opening speech. It is necessary to remember that when we look at the matter of cost, it is not just fees or legal costs that may be incurred in the litigation. There is also the matter of recovery of costs in that context. In that area considerable progress has been made, particularly with regard to applications to the property chamber.

As noble Lords will be aware, provision had already been made with regard to preventing landlords, in some instances at least, from recovering costs from the tribunal by way of service charges against leaseholders. That will be extended by virtue of Section 131 of the Housing and Planning Act 2016, which will also endeavour to prevent landlords recovering such costs by way of administrative charges, so steps are being taken to try to limit the cost liability of those who have regard to these tribunals and courts. The noble Baroness also expressed some concern regarding the operation of cost awards in the property chamber. Of course, in general, parties meet their own costs of litigating in the tribunal system even when they are successful in a claim, although there are some exceptions to that in the procedural rules.

As the noble Baroness noted, there was a cap of £500 in respect of the cost rules of the property chamber, although I understand that that was rarely used. The Tribunal Procedure Committee has noted that there is concern about the removal of that cap, and it intends to run a consultation to seek views on whether to reintroduce a cap for costs for unreasonable conduct in the residential property and leasehold cases and, if such a cap is to be reintroduced, to address the question of the level at which it should be set. Again, in that regard some progress has been made, and I hope to report further in due course.

The noble Baroness referred to those appellants who do not have legal representation when they come to the tribunals and courts. Appellants using the tribunal system are not required to be legally represented and tribunals are characterised by an approach that is deliberately less formal than is generally found in the courts. The tribunal panel members themselves, as the noble Baroness noted, are trained to assist unrepresented parties by helping them to frame the way in which they present their case to the tribunal.

Of course, this issue is dealt with differently in the courts, but in November 2014 the support strategy for litigants in person was launched. This involves work by a range of partners across the sector to improve the experience of vulnerable litigants in person in three fundamental ways. The first is providing online and self-help resources, and making sure that those who need them know where they are and how to access them, a point raised earlier by the noble Lord, Lord Marks. The second is providing practical and emotional support. The third is providing access to free or affordable legal advice and representation wherever possible. Any legal proceedings are likely to be stressful, which is particularly the case in matters concerning families and children—one could not doubt that—but there is support for those who become involved in these proceedings.

I shall move on to the more general issue of costs. We have to address the fact that the cost of our courts and tribunals has to be met in some form or other. The Ministry of Justice is not a protected department and it has a very challenging financial settlement. We must reduce annual spending by 15% in real terms—about £1 billion—by 2019-20.

Achieving that scale of financial saving inevitably requires difficult and tough decisions. We need to look at every area of the department’s spending and there can be no exceptions for tribunals. I hope that noble Lords will recognise that, to ensure that they are properly funded and that access to justice is protected, increases to some court fees are required. The cost of our court and tribunal system to the taxpayer is unsustainably high and it must be right that those who use the system pay more to relieve that burden. However, Parliament has granted, through the Anti-Social Behaviour, Crime and Policing Act 2014, a power that allows the Government to set court and tribunal fees at a level above the cost of the service. The noble Lord, Lord Marks, made reference to that and I acknowledge it.

The income from those fees must be used to fund an efficient and effective system of courts and tribunals. When setting fees, the Lord Chancellor must have regard to a number of factors including the need to preserve access to justice. In respect of tribunal fees, the Government firmly believe it is right to ask users of the service to make a contribution to the cost of providing it. Reference has been made to the property tribunal: I note that the fees there are set at a level below the actual cost incurred, not above it nor even equal to it. The help with fees scheme exists to help those who cannot afford to pay, and the Lord Chancellor has the power to remit fees in exceptional circumstances. Specifically, for example, in the property chamber of the First-tier Tribunal, a new fee structure was introduced on 25 July 2016 to simplify matters: a single-issue fee of £100—hardly an insurmountable burden for a leaseholder—with a further fee of £200 for a review of an application.

We have to see all that against the background of proposals to modernise our whole court and tribunal system. The noble Lord, Lord Low, referred to the Briggs report and to the Government having decided to address that and review how they can take forward digitisation of the whole court process. The removal of paper and the streamlining of case management, wherever they can be achieved, are immediate goals of the present Government. Proposals are coming forward quite imminently to address the digitisation process. It will take time—years—to fully implement that sort of proposal, but we have begun that task, which will immeasurably improve the whole matter of access to justice. It will demystify the court process and, we hope, allow those who do not have legal representation to understand how to apply to and proceed through the courts in order to vindicate rights and to seek and secure justice. That extends to all those who may be vulnerable or in difficulty and who feel they have a just claim.

Ultimately, these changes will deliver swifter justice. Our wider reforms underline a guiding principle that our justice system must be proportionate and accessible to everyone. That means members of the public, legal professionals, witnesses, litigants, the vulnerable, victims of crime, and the judiciary itself.