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In this anniversary year of Magna Carta, we celebrate that famous text and its promise: “To no one will we sell, to no one deny or delay right or justice.” Yet after 800 years of living true to the principle – through civil war and world war – selling justice is precisely what we have started to do.
As of this week, increases of more than 600 per cent in some civil court fees have turned our courts into something akin to a profit centre. Until now those fees were applied in bands, just as Stamp Duty used to be. Now the fee will be 5 per cent of the value of the claim for claims up to £200,000 – so that the cost of a £100,000 claim will rise from £1,115 to £5,000. Reformed Stamp Duty on property resulted in winners and losers. But under the new court fees system everyone pays more. There are no winners – except the Government.
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This is particularly egregious because the Government accepts that the courts were already paying for themselves. And while the new measures will bring in an extra £120 million, we must ask at what cost?
The civil courts are an essential backbone for a growing and prosperous economy. The UK prides itself on its small businesses, which in 2013 employed more than 14 million people and, according to the European Commission, contributed €473 billion to the UK economy. As well as making a disproportionate contribution to job creation, such businesses play a key role in growth by driving competition and stimulating innovation.
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Yet it is precisely these creative, innovative, vital firms that are likely to be the biggest losers in the new court fee hikes. Small businesses use the courts to recover monies owed to them, often by larger businesses. A business trying to recover £100,000 in money it is owed simply will not have £5,000 knocking around to spend on the courts. We asked our members what the effect of the increases will be – many said that insolvency would be the only option.
It is right that individuals and businesses pay a contribution to the courts system. We live in financially straitened times and applying some form of tariff is necessary to prevent the system from being abused. But it is wrong that small businesses – the companies on which our economy so depends – are now being forced to pay fees that amount to many times the real cost of providing the courts service.
Pensioners too will be hammered by the fees. I know of a case where a 66-year-old’s independent financial adviser allegedly gave negligent advice, resulting in his pension fund of £91,000 becoming almost worthless . Until last week, the court fee to start proceedings would have been £910. It is now £5,000. That is £5,000 he simply does not have.
In many cases, just the issuing of proceedings is enough for another party to settle. The actual costs to the courts are minimal in these cases. Denying individuals and businesses even the possibility of issuing proceedings by this huge rise in fees means that the other party will be less likely to admit liability and will not settle.
The Law Society has been leading the campaign against court fee increases . But we are not alone. Judges, barristers and peers have all spoken out about this short-sightedness that will – in the long-run – prove disastrous.
Court fees are the latest in a line of policies that are having a severe effect on access to justice in this country. We are challenging the Government’s policies on criminal legal aid tendering, which we believe will leave some people with no representation to defend themselves against crimes that they may not have committed. And our warnings on cuts to civil legal aid several years ago are now proving to be correct.
Such civil legal aid reforms have been self-defeating. As the Public Accounts Committee has pointed out, if people cannot afford a lawyer, they tend not to seek pre-trial mediation, instead launching needless proceedings, representing themselves and wasting court time – all of which costs taxpayers money. Since the reforms, the number of cases in family courts in which both parties represent themselves is up by 30 per cent; mediations for family law cases fell by 38 per cent (instead of increasing by 74 per cent as the Government intended). Changes to criminal legal aid, meanwhile, could lead to a situation where there are so few defence solicitors left that mistakes – including miscarriages of justice – become inevitable.
Treating access to justice as a number on a balance sheet in this way is clearly a false economy. Hikes in court fees will make the civil courts a preserve of the rich while small businesses are crippled by unpaid monies owed to them by larger companies.
The rule of law is one of our greatest exports. In the 800th anniversary of Magna Carta, the Government has taken the opportunity to market the UK as a safe place to rule on international disputes. Only last month, in central London, delegates from Pakistan to Paraguay gathered at the “Global Law Summit” to celebrate the contribution that the year 1215 made to business, economic growth and “societal fairness”. But what about those closer to home? Without access to justice here, Britons themselves are being deprived of the very rule of law that we proudly show off abroad. What’s fair about that?
Andrew Caplen is President of the Law Society of England and Wales.
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