Judges warn of 'chilling effect' of fees hike for judicial review cases

March 5, 2014

Proposed increases to the fee levels for judicial review cases will make only a small contribution to the Government's ultimate objective of reducing costs but will inevitably have a ‘chilling effect’ on such applications, senior judges have warned.

In a submission to the Ministry of Justice’s consultation Court fees: proposals for reform, the judiciary said this was particularly the case when the fee levels were looked at in the context of a reduction in the availability of fee remissions, and proposed changes in the availability of legal aid for judicial review.

The MoJ has proposed a 125% increase in the fee for permission to apply applications and a 216% increase for permission to proceed and applications for oral renewal that are not successful.

Stating their disagreement with the fee levels, the judges said judicial review was “an area of public law which, as the consultation paper acknowledges, operates as a critical check on the powers of the State and is a key mechanism to hold the Executive to account”.

The judiciary meanwhile said that it welcomed the simplifying proposal of a single ‘up-front’ fee of £2,000 for public law family cases.

Commenting generally on the MoJ’s proposals for court fees, the judiciary said its position had always been that the State was under a duty to provide access to justice irrespective of its ability to secure full-cost recovery.

The Government, it said, appeared not to accept this position and intended to ask Parliament to render the justice system self-financing.

The judiciary’s submission distinguished between two “separate but cumulative” proposals from the MoJ:

Costs recovery: involving increases in court fees with a view to reducing the deficit on the costs of the civil and family courts. These are expected to raise £105m additionally per year;
Enhanced court fees: envisaging fees in a significant number of cases at a level above the cost of the proceedings in question. “The consultation paper makes clear that this represents a departure from the Government’s policy of not charging more than a service costs. It is a novel concept. It will require primary legislation.” These are expected to raise an additional £190m per year, and help fund the whole or part of the cost of fee remissions.

The submission said: “While the consultation paper opens with a clear acknowledgement of the role of the courts, the bulk of the paper, the proposals it contains and the prevailing approach appear to be based on a view that recourse to the courts is a matter of discretionary spending by those who can afford to and should pay its full cost and, in some cases, more than its full cost.

“It must a be a matter for Parliament to consider how these two conflicting principles should be reconciled.”

The judges wrote:

The civil courts were fully self-financing while the family courts ran at a very substantial deficit, and the cost recovery proposals were largely directed to funding the family courts’ deficit out of charges to be paid by users of the civil (non-family) courts. “There is no good reason for treating the civil and family courts as a single system. Their functions are quite separate.”
The issue that must be faced and debated, although not raised explicitly in the consultation paper, was whether it was right that parties in civil proceedings should pay more than the costs of the civil courts in order to fund the deficit in the family court system. “This issue, we suggest, also has to be considered in the context of recent changes made to the availability of legal aid, to the level of fee remissions, and to the funding of civil litigation generally following the ‘Jackson’ reforms on costs.”
“If, as all agree, it is essential in the public interest to provide a family justice system, and it cannot be fully self-financing, should the cost be found from society at large or from a charge, essentially by way of taxation, on those who need to bring claims in the civil courts?”
The use of enhanced court fees to fund the whole or part of fee remissions marked a fundamental change in policy. “Until now the Government has accepted that fee remissions, provided in the public interest for those unable to pay court fees, should be borne by society at large.”
No explanation was given as to how the balance of funds to be raised by enhanced court fees would be applied, save “to ensure the continued operation of an effective court system”. This was too vague.

The judiciary also described the MoJ’s research as “clearly inadequate” to assess the probable consequences of both the costs recovery and enhanced court fees proposals on the ability of parties to afford access to the courts and on their willingness to do so.

The submission added: “The research so far undertaken does not....enable the judiciary to share the MoJ’s confidence that the proposals will not affect access to justice. The same applies to the assumptions on case volumes made in the impact assessment which are critical to the economic savings which the proposals are designed to achieve.

“It is of the utmost importance that short-term proposals to save costs do not lead to a vicious cycle of decreased volume and increased costs and result in irremediable damage to the system of civil justice as a whole.”

The judges strongly criticised plans to levy higher fees on ‘commercial proceedings', namely those brought in any of the jurisdictions in the Rolls Building (the Chancery Division, the Commercial Court, the Admiralty Court and Technology and Construction Court and their District Registries).

“This proposal rests on a misunderstanding of the way the courts operate in practice and which would have undesirable and unintended consequences,” they wrote.

In their conclusion, the judiciary wrote that they had for many years consistently made clear that they did not support the policy of successive Governments that the justice system should be self-financing.

They said it was “difficult to see the merit of proposals which would increase the cost to litigants but provide no tangible benefit to them or the judicial system more generally, through the hypothecation of the increased fees”.

It also suggested that there could be no justification for increasing fees unless:

It was clear that the fees would be retained within the court system and used….for the benefit of those who use the system; and
The Government permitted (or itself made) proper investment in the court system through HMCTS so that it could be modernised and made fit for purpose, for the benefit of the economy, and the public as a whole.

“Unless these conditions are fulfilled, increases in fees of the types proposed would be wrong,” the submission said.