Civil Proceedings and Magistrates’ Courts Fees (Amendment) Order 2025

Lord Ponsonby of Shulbrede Excerpts

Monday 17th March 2025 Grand Committee

Moved by

[Lord Ponsonby of Shulbrede]

That the Grand Committee do consider the Civil Proceedings and Magistrates’ Courts Fees (Amendment) Order 2025.

Relevant document: 18th Report from the Secondary Legislation Scrutiny Committee

[The Parliamentary Under-Secretary of State, Ministry of Justice (Lord Ponsonby of Shulbrede) (Lab)]

My Lords, this draft instrument makes a technical amendment to three court and tribunal fees to ensure that they can continue to be charged at their current level by His Majesty’s Courts & Tribunals Service. This forms part of a wider set of amendments to 27 fees whose latest estimated costs have fallen below their current value. The 24 fees not included in this affirmative instrument will be reduced by a negative SI, which will be laid before Parliament shortly.

No one will be required to pay a higher fee as a result of the changes made by this affirmative instrument. Rather, it simply changes the legislative power under which the three fees in question are set without amending the amount charged to HMCTS users. The amendments will protect at least £3.5 million in income a year to help ensure that the courts and tribunals remain efficiently and effectively resourced, reducing the overall cost to the taxpayer. A properly funded and functioning HMCTS is critical to upholding the Lord Chancellor’s statutory duty to protect access to justice.

Fees act as an essential source of income for the funding of the courts and the tribunals, with over 300 fees charged for a variety of administrative and judicial services provided by HMCTS. In line with the principles in HM Treasury’s Managing Public Money, most court fees are set to recover no more than the underlying estimate of what it costs HMCTS to run the corresponding service. Others are set deliberately below the cost of the service to ensure that access to justice is protected, such as in proceedings concerning domestic abuse.

A minority of HMCTS fees are set under what is known as the “enhanced” power via Section 180 of the Anti-social Behaviour, Crime and Policing Act 2014. Enhanced fees can lawfully over-recover their underpinning cost to cross-subsidise HMCTS services for which low or no fees are payable.

Following a substantial review of my department’s costing methodology in relation to court processes, the newly estimated costs of 27 fees were found to have fallen below previous estimates. The revised costing methodology is an improved, more nuanced model that relies on data sources that were not available to the previous methodology. The powers under which the 27 fees are currently set allow them to recover a maximum of their underlying cost. This means that the 27 fees must either be reduced to their estimated cost or kept as they are but restated under the 2014 Act in order to become enhanced fees.

In line with the Treasury principles, it is prudent for the 2014 Act to be used sparingly in setting fees that over-recover their cost. My department’s position is therefore that the enhanced power should be reserved for fees that can generate substantial levels of income to cross-subsidise under-recovering parts of HMCTS, provided that doing so has a minimal impact on access to justice. This is why the majority of the 27 fees in question will be reduced in line with their newly estimated cost by an upcoming negative instrument, with only three enhanced by this affirmative instrument.

I shall now refer to each of the three fees in turn, with a view to explaining the service to which they are attached and why my department deems it appropriate that each is enhanced for the purpose of cross-subsidisation. The first is the 50p fee charged for a council tax liability order. This is payable by local authorities to legally demand payment of council tax arrears. HMCTS receives high volumes of CTLO applications each year which raise significant levels of income to support the running costs of courts and tribunals. In 2022-23, 2.1 million CTLOs were made, resulting in £1.1 million in fee income. Enhancing the fee will not only ensure that this crucial income is retained but remove the cost to the taxpayer of adjusting the fee in line with its regularly fluctuating cost.

The second fee is charged at £22 for a warrant of entry. These warrants are mostly applied for by utility companies to gain legal access to private premises. Similarly to CTLOs, high volumes of these warrants are made each year, generating £7.2 million alone in fee income for HMCTS in 2022-23. Reducing the fee to cost would place a significant pressure on my department at a particularly challenging financial time.

The third fee relates to ships or goods which have been seized in the event of a breach and are then sold off at auction. The Admiralty Court charges several fees which are payable upon sale of a vessel or goods, but the amount payable varies depending on the value of the ship. The fee relevant to this instrument is that charged for ships valued over £100,000. Unlike the flat CTLO and warrant of entry fees, this fee is £1 for every £100 of the ship’s value up to £100,000 and increases by a further 50p for every £100 of the ship’s value above £100,000, with a minimum fee of £205. Although this fee does not attract as many applications as those for a CTLO or warrant of entry, it still provides an important source of income for HMCTS. This is because some ships are sold for several million pounds, meaning that even low levels of annual volumes can result in notable overall income generated.

I reiterate that this instrument merely maintains the status quo by not increasing the value of any of the three fees it restates under the 2014 Act. As a result, there is no anticipated impact on users of the courts and tribunals specifically deriving from this instrument. The negligible bearing this SI will have on HMCTS users was echoed in the responses to the 2023 consultation, undertaken by the previous Government, regarding a series of updates made to court and tribunal fees. Included within this consultation was a proposal to enhance the CTLO fee. The other two fees in question had not yet been identified as over-recovering at the time of the consultation. Of those who responded to this proposal, 63% had no view and no further comments to share, while 17% of respondents agreed with the proposal, stating that enhancing the fee would not negatively impact users given that its current value of 50p would be retained. The two respondents who disagreed had incorrectly assumed that the fee was being increased.

I reassure Members that the number of variations between costs and fee values that are corrected through this instrument and the accompanying negative SI is considered higher than usual. This is because of the revisions brought about through my department’s updated costing methodology. Although the costs underpinning HMCTS fees will be reviewed annually, I do not anticipate the need to amend this many fees year on year, thanks to the improvements made by the new methodology.

The three fees in question are charged in England and Wales only. This instrument will therefore create no effect on the court fees charged in Scotland and Northern Ireland.

This instrument can be seen as a corrective SI which simply delivers minor updates to the statute book for continuity purposes. As such, it does not bring about any practical changes to those affected by court and tribunal fees, and in fact ensures that the fees payable by the relevant court users remain the same. I believe that the amendments affected by this SI and its accompanying negative instrument represent the most pragmatic approach in keeping my department’s fees legislation up to date. I beg to move.

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

My Lords, once again I am grateful to the Minister for his introduction to this instrument. It is difficult to say much about this amendment order in that, as he pointed out, it does not alter the existing fees at all, as far as I can see. Also, the possibility of enhanced fees is restated in relation to the fees covered by the order, there already having been that possibility in legislation.

Having read the Explanatory Memorandum and listened to the Minister’s introduction, it appears that the level would have gone down on the introduction of what I think he called the new methodology, which I thought was an attractive word in relation to this instrument. In the interests of transparency, it would be interesting if he could say how much lower the fees would have been on the introduction of the new methodology had this instrument not been brought into effect.

In general, we are of the view that the level of court fees should be assessed by reference to the recovery of the costs of administration, rather than being treated as a kind of profit centre for either the department or the Courts & Tribunals Service. Therefore, we do not see it as sensible to set fees at a level that produces a substantial profit for the administration, although I can see an argument for the cross-subsidisation that the Minister mentioned where there are other areas that are loss-making for the Courts & Tribunals Service which are covered by some excess income on some of these very high-volume fees. I do not suppose that anybody will be too worried about the commission-type fee for the sale of goods and shipping.

We simply state that, in general, there should be a good reason for enhanced fees, which I think is a principle that the department accepts. We accept that some fees will exceed the costs of administration, but that needs to be justified. We do not see the fees charged by courts as an appropriate way of raising extra funds for the public purse.

[Lord Ponsonby of Shulbrede (Lab)]

I thank the noble Lord for his comments, and I agree with the way he set out the objectives of raising fees. It is not the objective to make a profit on them. The vast bulk of fees are set at a level to recover their administrative cost. However, occasionally there are these enhanced fees. For reasons which the noble Lord will understand, there is some limited extent of cross-subsidisation for certain fees which are set much lower or at zero. But the general principle is that the fees should cover the cost of the application itself.

The noble Lord asked what the fees would be if this order was not in place. In the case of the council tax liability order, the fee is being maintained at 50p, but it would go down to 23p if this SI was not put in place. In the case of the warrants of entry, it is currently being maintained at £22 but would go down to £12.09, for the same reason. It is more difficult for me to give the equivalent value for the sale of ships or goods because it is a different calculation and I cannot give a single number to give a comparison. However, I hope that answers the noble Lord’s questions. I commend this order to the Committee.

Motion agreed.