Draft Non-Contentious Probate (Fees) Order 2018

Matt Western Excerpts

Thursday 7th February 2019 General Committees

[Lucy Frazer]

As I mentioned, the changes that the Government are making were considered previously in Committee and were well documented in the press, and points on the matter have been put to me in the Chamber. We have the power to pass the legislation by way of statutory instrument, and that is how we are doing so.

It is important to have a fair and functioning justice system. I will touch on the service that HMCTS provides. The decisions that are made in courts and tribunals convict the guilty, protect the innocent and help ordinary people take back their lives. The Government are committed to providing a world-class courts and tribunals system that supports vulnerable people. We are investing £1 billion to modernise and upgrade the courts system but, as is obvious, an effective and efficient justice system requires proper funding and it has long been the case that users of our courts contribute towards the costs, reducing the burden on taxpayers. We believe that remains relevant and reasonable.

By asking those who use the courts to pay more, where they can afford to do so, we are able to fund areas where we charge no fees to vulnerable victims and users. That includes, for example, domestic violence protection orders, non-molestation orders and cases before the first-tier tribunal concerning mental health, where applicants do not have to pay a fee at all. In 2017-18, the running costs of HMCTS were £1.8 billion, but we recovered only £710 million of that—less than 40%—in fee income. That position is unsustainable, and it is right that we look to users of the service to contribute more. We anticipate that the new fees will bring in additional income of £145 million in the next financial year, helping to fund our courts and tribunals by reducing the burden on the taxpayer.

[Matt Western (Warwick and Leamington) (Lab)]

I can see a lot of positives in what is proposed. However, given the funding gap between the actual costs of running the service and what is earned, as the Minister has described, is there not an enormous opportunity to charge even more for estates worth over £2 million? The cap seems to be unnecessarily low.

[Lucy Frazer]

That is an interesting point. The figure was higher the last time the proposal was before Parliament—£20,000 for the top fee, rather than the current proposal of £6,000—but the response was that it was too much, and we agree. The £6,000 is more proportionate. It still brings in an income of £145 million, which is essential to fund the Courts Service. Parliament has understood the importance and value of our justice system, and the financial pressures on HMCTS, which is why in the Anti-social Behaviour, Crime and Policing Act 2014 it empowered the Lord Chancellor to charge enhanced fees.

I wish to deal with some of the concerns expressed by the JCSI and the SLSC. They reported the draft statutory instrument for doubtful vires and unexpected use of powers. They felt that the new fees amounted to a tax and questioned whether the imposition of such levels of fees was anticipated when the primary power was approved. We disagree with those Committees.

The new fees come under the category of “enhanced” fees. As Members are aware, Parliament has expressly given power to the Lord Chancellor to set certain court and tribunal fees above the cost of providing the service, under section 180 of the 2014 Act. The Act gives the Lord Chancellor the explicit authority to impose enhanced fees in order to

“prescribe a fee of an amount which is intended to exceed the cost of anything in respect of which the fee is charged.”

That is what the draft order seeks to do.

In doing so, the Lord Chancellor must have regard to, among other factors, the financial position of the courts and tribunals for which he or she is responsible, including, in particular, any costs incurred by those courts and tribunals that are not met by the existing fee income. The Act is also clear that any income from the fees must be used to finance an efficient and effective system of courts and tribunals. Those provisions clearly demonstrate Parliament’s intention that the Lord Chancellor should be able to set fees above cost in one part of the system in order to subsidise other parts, in order to maintain effective operation of the system as a whole.

The JCSI went on to argue that the basic premise of the fee is that it should be directly related to the cost of the service. We do not accept that. The specific legislative provision in section 180 of the 2014 Act breaks the link between the cost of the service and the fee that may be charged. That was clearly the intention of Parliament. The proposals in the draft order are consistent with the primary power and with the assurances given to Parliament when the Bill was considered. This is not the first time the Government have sought to introduce enhanced fees, or fees that relate to the value of the issues at stake—it has been done for certain civil money claims, for example. We therefore do not consider the draft order to be an unexpected use of the section 180 power.

The SLSC further argued that—