The Ministry of Justice‘s plans to levy sizeable court fees in commercial claims have encountered a setback after the Government’s own watchdog accused the department of being unclear in its cost objectives.
The Regulatory Policy Committee (RPC), a body set up to provide the government with external independent scrutiny of regulatory proposals, this week said in an impact assessment that the MoJ’s plans were ‘not fit for purpose’ and that the department ‘needs to make clear whether the proposals will result in the Court Service raising more funds than is necessary to cover their costs’.
The report, published on the MoJ website on Monday (20 January), claimed that the MoJ’s plans lack clarity, adding: ‘The Ministry of Justice has not explained sufficiently the outcome the proposal is intended to achieve – whether the proposal will result in the Court Service generating an adequate level of revenue to meet its costs, or whether a surplus will be generated. While the narrative in the impact assessment suggests that the purpose of the proposal is to reduce or even eliminate the burden to the taxpayer, the figures set out by the department suggests a level of revenue that will exceed estimated costs.’
The 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 5% added on top of the total running costs. The stated aim is not only to ensure court users cover their court costs but, in some high-value cases ‘where they can afford to do so’, that they pay extra.
The proposals are part of a series of steps being taken by the MoJ to reduce its annual spend by over £2.5bn by 2014/15.
The high regard that London is held in on the international stage has been re-enforced by a series of high-profile international disputes, such as the £3.2bn damages claim brought by the late Boris Berezovsky against his former business partner Roman Abramovich.
In December, Minister for Justice Shailesh Vara MP 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.’
Other 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 ran up until Tuesday, with any changes expected to come in the spring and summer of 2014.
sarah.downey@legalease.co.uk
