On 22 July 2015, the Government finally responded to the consultation on enhanced fees for general applications in civil proceedings and issued a mini-consultation on further fee proposals.
The response marks the second increase in court fees with the first increase netting an additional £60m revenue per annum for HM Courts Service.
The Government response confirms that there will be an increase in fees for general applications in civil proceedings:
By way of explanation of the proposals, Shailesh Vara MP, Parliamentary Under Secretary of State at the Ministry of Justice, advised that there was only so much that could be delivered through efficiency measures alone. He said:
“If we are to secure sustainable funding of the courts and tribunals, we must also look to those who use the system to contribute more where they can afford to do so. That is why we have to look again at court fees. Despite the fees already introduced, HMCTS still costs £1 billion a year more to run than it receives in income.”
The response includes a further consultation with the proposals under consideration estimated to provide an additional £48m revenue per annum. Despite the outcry over the increase in issue fees from £1,890 to 5% of the value of a claim capped at £10,000, the Government plans to go further.
It proposes to:
Whilst we recognise the need for costs savings from each and every Government department we are concerned that yet another increase in court fees will impact upon the cost of bringing litigation and whether that may ultimately deter those who have perfectly legitimate claims to bring.
We also question how this sits with Michael Gove’s speech at the Legatum Institute where he pledged to break down the “two tier justice” system and stated that justice would not just be for the wealthy but for all – resonating with the Prime Minister’s “One Nation” theme.
Where insurance is funding litigation, this will undoubtedly mean additional cost which may ultimately be reflected in premium. Again, this does not sit easily with concern over the level of premium and how this feeds into the overarching “cost of living” debate.
If this additional income and proposed costs savings reverses the current trend of declining service from the courts and increased waiting lists, resulting in the long promised investment in a modern IT infrastructure to improve efficiency, then the Government could argue that these steps are justified. However, they are a very long way from proving that will be the case.
We will be responding to the consultation and will continue to keep clients closely appraised as this issue develops.
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