Following a year of protests over legal aid cuts and court reforms from a profession better known for its quiet conservatism, 2014 promises more of the same after the government this month launched a consultation over the levying of sizeable court fees in commercial claims and the Criminal Bar Association (CBA) announced a half-day strike of its members on 6 January.
The Ministry of Justice’s (MoJ’s) consultation on fees includes a proposal for imposing percentage-based court fees that could see the cost of a £400,000 piece of commercial litigation increase by £20,000, with around five percent added on top of the total running costs.
While current court fees are supposed, in theory, to cover the courts’ running costs, the cost to the taxpayer last year of the civil courts in England and Wales stood at over £100m. The latest proposals from the MoJ, which is required to reduce its annual spend by over £2.5bn by 2014/15, aim not only to ensure court users cover their courts costs but, in some high value cases ‘where they can afford to do so’, that they pay extra. Launching its consultation the MoJ paper said: ‘The courts, and those who use them, must make a contribution to reducing public spending.
‘Achieving this outcome in this environment involves some difficult choices: there is a limit to how much can be achieved by those spending cuts alone. For these reasons, the government believes that it is preferable that those who can afford to pay should contribute more to the costs of the courts, so that access to justice is preserved and the cost to the taxpayer is reduced.’
Minister for Justice Shailesh Vara MP added: ‘For many years, the civil and family courts have operated under the principle that those who use the courts should pay the full cost of the service they receive. But this hasn’t been fully achieved in practice, and hardworking taxpayers have had to pick up some of the bill. Last year the deficit was more than £100 million. That cannot be right.’
The idea of charging to use the UK’s internationally-respected courts has long been debated, particularly in light of their attraction to wealthy international claimants, including Russian oligarchs such as the late Boris Berezovsky in his $5bn damages claim against former business partner Roman Abramovich.
Vara said: ‘We have the best court system in the world and we must make sure it is properly funded so we keep it that way. Hard-working taxpayers should not have to subsidise millionaires embroiled in long cases fighting over vast amounts of money, and we are redressing that balance.’
However, the MoJ acknowledged that applying a one-size-fits-all percentage-based fee, which could lead to a £1bn claim generating £50m in fees, would lead to litigation becoming ‘prohibitively expensive,’ and the legal profession has warned against deterring international litigants who currently bring their claims and their wealth to London because the courts are recognised as impartial and fair.
Further proposals from the MoJ include scrapping the £75 application fee for domestic violence injunctions, and bringing in a standard fee of £270 for civil cases which are not claims for money.
The consultation is set to run until 21 January 2014 with any changes coming into force in the spring and summer of 2014.
Meanwhile, tensions between the MoJ and the legal profession over plans to reduce legal aid for criminal cases show little sign of abating, after the CBA announced many members will refuse to attend court for half a day on 6 January in protest.
‘The bar has stood firm against further cuts, pointing out that no other profession has sustained cuts of the magnitude already imposed on us,’ a CBA statement said on 11 December. ‘We have been met only with the response that the Government needs to save money and that we will have to bear the brunt of it again. There is now a strong feeling at the criminal bar that if these cuts are introduced they will make it impossible for many to continue in practice.’
sarah.downey@legalease.co.uk
