Draft Civil Proceedings, First-tier Tribunal, Upper Tribunal and Employment Tribunals Fees (Amendment) Order 2016

Shailesh Vara Excerpts

Thursday 7th July 2016 General Committees

[The Parliamentary Under-Secretary of State for Justice (Mr Shailesh Vara)]

I beg to move,

That the Committee has considered the draft Civil Proceedings, First-tier Tribunal, Upper Tribunal and Employment Tribunals Fees (Amendment) Order 2016.

May I say what a pleasure it is to serve under your chairmanship this morning, Mr Nuttall? The purpose of the draft order is to make changes to the fees payable in proceedings in the civil courts and tribunals. Specifically, the order will uplift a number of fees charged in the civil and magistrates courts by 10%.

[Mr Andrew Smith (Oxford East) (Lab)]

The Minister says that the fees are being increased by 10%. How does he justify such a large increase over and above inflation? Does that not put at risk the process of, and access to, justice?

[Mr Vara]

The right hon. Gentleman asks a good question, but he will be aware that running the courts and tribunals system costs a lot of money. Given the economic difficulties that the country is in, we have found it necessary to impose fees that will contribute towards the cost of keeping Her Majesty’s Courts and Tribunals Service operating.

As I was saying, the order will uplift a number of fees charged in the civil and magistrates courts by 10%. That will include all the fees that are currently at full cost recovery levels including, for example, the fees for judicial review proceedings, but the uplift will not apply to fees in civil proceedings that are already set above cost. The uplift will also apply to judicial review proceedings heard in the immigration and asylum chamber of the upper tribunal to ensure that the fees in judicial review proceedings are consistent across jurisdictions.

The order also introduces a new, consistent fee-charging approach across the property chamber of the first-tier tribunal. The current structure that operates in the tribunal is complex and inconsistent, with a range of different fees charged for some application types and no fees charged for others. Our changes will simplify and standardise the approach, reducing the burden on the general taxpayer by raising the overall recovery rate in the tribunal from about 4% to about 10% and sharing that burden more equally between all those who use the tribunal.

As we announced in our consultation response last December, the target is to recover about 25% of cost from fees in the property chamber. Achieving that aim will require us to revisit our specific proposals relating to leasehold enfranchisement cases, and we will make an announcement on our plans for fees in those proceedings in due course.

Finally, the order will change the default classification of two new appeal rights that have been created in the employment tribunals from a type B claim, which attracts the higher fee, to a type A claim, for which the fee is lower. The normal rule is that when those who use a public service are charged a fee to access them, the fee should be set at a level designed to cover the full costs of the service. The civil and family courts have operated on that basis for a number of years.

Section 180 of the Anti-social Behaviour, Crime and Policing Act 2014 provides the Lord Chancellor with the power to prescribe fees above cost, but requires that those fees are used to

“finance an efficient and effective system of courts and tribunals”.

That power was used for the first time in March last year to increase the fees for money claims, and again earlier this year to increase the fees for possession claims, general applications in civil proceedings and applications for a divorce or dissolution of a civil partnership. The power will be exercised again in this order to increase the fees in a range of civil proceedings by 10%, which will take those fees above cost recovery levels.

The fee changes that affect the property chamber of the first-tier tribunal and employment tribunals will be made under section 42 of the Tribunals, Courts and Enforcement Act 2007, given that even after these changes, the fees will remain well below cost recovery levels.

The case for revisiting the fees that we charge in courts and tribunals is based firmly on the need to ensure that Her Majesty’s Courts and Tribunals Service is properly funded to protect the vital principle of access to justice.

[Chris Stephens (Glasgow South West) (SNP)]

Can the Minister confirm that the fees recovered in the last year were about 12.5% of Ministry of Justice income?

[Mr Vara]

I am not familiar with the precise figure and I am keen to ensure that the hon. Gentleman gets it, so I am happy to write to him with the details of whether the figure is 12.5% or more or less than that.

A fully functioning and properly funded justice system is the cornerstone of our democratic society. It should provide everyone with the ability to redress their problems in an efficient and effective forum, and it should also underpin our economy. The Government have committed to an historic, once-in-a-generation investment of more than £700 million to transform our courts and tribunals system. The scale of that investment and the ambition of our reform plan will enable us to build a justice system that is simpler, swifter and more efficient, using modern technology.

In a tough financial climate, there is only so much that can be delivered through spending cuts and efficiencies. That is why we have had to look again at the balance between what users pay towards the overall cost of court and tribunal services and the financial burden that falls on the taxpayer. We estimate that the measures set out in the order will generate about £6 million per annum in additional income, with every pound collected being spent on providing our system of courts and tribunals. I recognise that no one will ever welcome an increase in fees, but I hope that right hon. and hon. Members will recognise that increases are required so that we can ensure that the courts and tribunals are properly funded and access to justice is protected.

May I take this opportunity to congratulate the hon. Member for Leeds East on his appointment as shadow Lord Chancellor and Secretary of State for Justice? I look forward to having debates with him on many occasions, and I hope that the debates will be constructive for the benefit of all those who need access to justice.

--- Later in debate ---

[Mr Vara]

I start by thanking the hon. Members for Leeds East, for Glasgow South West and for Bassetlaw for their contributions. Much of what was said is not relevant to the debate, because the order is about the narrow confines of the order, but I will take a moment or two to reply to some points that have been raised, for the sake of balance in Hansard.

On the need for fees, which the shadow Lord Chancellor raised, I reiterate that we live in difficult times and it is necessary to take measures to deal with the economic and financial climate in which we are living. The total cost of the courts and tribunals system in 2014-15 was £1.8 billion and the fee income was £700 million, leaving a net cost to the taxpayer of about £1.1 billion. I hear loud and clear the criticisms that have been made about fees, but there is a deafening silence on Opposition Members’ alternative for getting the money to meet the £1.1 billion shortfall. I suppose that the luxury of opposition is the ability to make grand promises and be critical without having to take the tough decisions that government requires.

[Chris Stephens]

The Minister would surely concede that the Scottish Government have taken a more enlightened approach, and have indicated that they will abolish employment tribunal fees. At least one part of the United Kingdom is taking a different approach, and the Scottish Government will find that in their budget.

[Mr Vara]

The hon. Gentleman is right that the Scottish Government have taken a different approach. However, there has been a distinct lack of any mention of where they will get the money from. From which other budget will they take it? Until that response is given, the promise of scrapping one set of fees is somewhat hollow, commendable though it is. There is an element of balancing budgets here.

It is not unreasonable to charge people who use the courts and tribunals system so that they make a contribution for that use. The order is not about profit—it is simply wrong to say that it is. In fact, it shows a complete lack of understanding of how the courts and tribunals system operates. It is abundantly clear that the fees will be used to help run the courts and tribunals system and will go towards the additional £700 million that the Chancellor has made available to ensure that we have a 21st-century, first-class courts system that is the envy of the world. There is simply not a bottomless pit of money, and we must remember that we are talking about taxpayers’ money.

The issue of employment tribunal fees is not relevant to this debate, but I will briefly make one or two comments to rebut some points that have been made. As the hon. Member for Glasgow South West said, the latest figure for the cost of employment tribunals was £71 million a year. It is therefore not unreasonable that the public should contribute towards the use of those tribunals. What has not been taken note of, however, is that some 83,000 people have used the ACAS early conciliation scheme, which is free.

It is ironic that some Members here claim to represent the public, given what they have said today. Indeed, the hon. Member for Bassetlaw said that we are not in touch with the public. He is the one who is not in touch with the public, because he is seeking to scrap fees. We are instead encouraging people to use a system that is absolutely free, with no lawyers’ fees, no court fees—no anything. We have the irony that these people are standing up and advocating a system of people going to employment tribunals, which would necessitate cost.

[John Mann]

Irony? The irony is that people are required to go to ACAS. Does the Minister think that in the cases that I take, we do not go to ACAS? The employers, like that Gosport Tory, refuse to answer the phone calls and letters from ACAS. Of course we go through ACAS. These bad employers do not settle in ACAS. I do not suggest that the taxpayer should be funding the service—of course the taxpayer should not be funding it. There should instead be proper fines for employers that break the law. That is how the tribunal system ought to operate, and that—enforcing and strengthening the law—would be easy to do.

[Mr Vara]

The hon. Gentleman said that he was not a lawyer, but he does not have to be a lawyer to know that people who go to employment tribunals and win are entitled to have their costs repaid, including the cost of the fee.

[Chris Stephens]

As the hon. Member for Bassetlaw indicated, settlement in ACAS relies on the employer also joining ACAS and playing ball. In many cases, rogue employers do not play ball. ACAS is one route, but that relies on the employer going to ACAS and joining the discussion, which does not happen often enough.

[Mr Vara]

I repeat to the hon. Gentleman that where it is necessary for cases to go to the tribunal, people can recover their costs if they win.

[Richard Burgon]

On the subject of lawyers, which my hon. Friend the Member for Bassetlaw mentioned, I have been thinking about what the Minister said earlier. He said that to say that fees were about treating courts as a profit centre showed—I think these were his words, as Hansard will show—“a complete misunderstanding” of the court system. If I remember correctly, the quote to which he was responding was from the Law Society. Is he saying that the Law Society has a complete misunderstanding of the court system?

[Mr Vara]

There are various stakeholders involved in this debate and there are a variety of views. I disagree with the views that have been put forward, and that is why these fees are being introduced. I simply say as far as fees are concerned—this applies to employment tribunal fees as well as all the other fees that are relevant to the order—that a remission process exists. Subject to meeting the right criteria, people can apply for remission of the fees.

The Government estimate that the measures in the order will generate about £6 million per annum in additional income, with every pound that is collected being spent on providing an efficient and effective courts and tribunals system. The purpose of these reforms is to increase fee income and so reduce the costs of the courts to the taxpayer, and to ensure that access to justice and to the Courts and Tribunals Service is protected. I commend the draft order to the Committee.

Question put.