The Law Society has issued a pre-action protocol letter for judicial review to challenge the government's decision to increase some court fees by over 600 per cent.
The grounds on which the Law Society is challenging are:
- The proposals would be tantamount to 'selling justice' contrary to the principles of Magna Carta.
- The government does not have the power to raise fees for the purposes it has stated in the consultation - to make 'departmental savings'.
- The government is proceeding without evidence to justify the increases, which are effectively a tax.
- Consultees were not told how much money needed to be raised from enhanced fees or why - this is a breach of the Government's own consultation principles, which state that sufficient reasons must be given for any proposal to permit intelligent consideration and response.
- When the government tabled its second round of proposals on higher fees for possession claims and general civil applications, it had already made up its mind about certain options, which is unfair.
- The government failed to allow representations on enhanced fees in combination with amendments to the remissions scheme.
The Society has asked the government to provide information on how much money it proposes to raise through enhanced fees and what it will spend the money on. It has also asked the government to explain how modernisation of the court services will appear in the government's accounts.
Law Society president Andrew Caplen said: 'The government's policy on 'enhanced court fees' amounts to a flat tax on those seeking justice.
'The government's hikes will price the public out of the courts and leave small businesses saddled with debts they are due but unable to afford to recover.
'State provision for people to redress wrongs through the courts is the hallmark of a civilised society.'
Notes to editors
Additional signatories to the pre-action protocol letter include: The Bar Council, Chartered Institute of Legal Executives (CILEx), Forum of Insurance Lawyers (FOIL), Association of Personal Injury Lawyers (APIL), Motor Accident Solicitors Society (MASS), Chancery Bar Association, Action Against Medical Accidents (AvMA) and the Commercial Bar Association (COMBAR).
The court fees affect debts owed to small businesses as well as personal injury and clinical negligence claims. In a recent survey, solicitors told the Law Society that higher court fees would:
- Put people off going to court when they have genuine claims. Those out of work due to injury caused by negligence would not risk losing what little money they had left on court fees, even if they had a strong claim.
- Provide an incentive for large companies to deny liability, knowing that the injured parties would not be in a position to fund expensive court fees. Under the current fees, large companies and insurers often settle out of court when they are clearly liable.
- Lead to small business insolvency. Unpaid invoices of £10,000s or £100,000s mean cash flow and overdrafts are already stretched. For some companies, insolvency will be the only option.
Data from nearly 200 solicitors found that the total value of cases brought by individuals would likely fall by around one-third (35 per cent) under higher court fees. For small- and medium-sized companies it would halve (a 49 per cent decrease). This suggests that increased court fees could have a significant impact on access to justice for both individuals and businesses, as fewer could afford to pay the higher rates.
The Law Society, over the period 29 January-9 February, asked its members for their views on the potential increases in court fees. 181 members replied to this consultation. They estimated that, overall, the total value of their work in the affected areas could decrease by between 27-36 per cent as a result of the fee increases. The value of work bought by individuals could fall by 30-40 per cent, and the value of work from small and medium-sized companies could fall by 42-55 per cent. Work from large companies was expected to fall less (by an expected seven-27 per cent,) reflecting the generally higher value of claims, and the corresponding lower effect of the fee increases. This suggests that increased court fees could have a significant impact on monetary claims from both individuals and businesses, as fewer could afford to pay the higher rates.
The government first consulted on the money claim fee rises in December 2013. The Law Society has long opposed the government's policy of seeking to recover the costs of running the civil courts through court fees. Our response to the 2013 consultation argued that a substantial proportion of the cost of the civil justice system should be borne by the public purse.
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