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Transcript of Bar Council response to the Ministry of Justice’s ... · The Bar makes a vital contribution to...
Bar Council response to the Ministry of Justice’s consultation paper
entitled “Court Fees: Proposals for reform”
1. The General Council of the Bar of England and Wales (the Bar Council) welcomes the
opportunity to comment on the Ministry of Justice’s consultation paper entitled, “Court
Fees: Proposals for reform”. 1
2. The Bar Council represents over 15,000 barristers in England and Wales. It promotes
the Bar’s high quality specialist advocacy and advisory services; fair access to justice for all;
the highest standards of ethics, equality and diversity across the profession; and the
development of business opportunities for barristers at home and abroad.
3. A strong and independent Bar exists to serve the public and is crucial to the
administration of justice. As specialist, independent advocates, barristers enable people to
uphold their legal rights and duties, often acting on behalf of the most vulnerable members
of society. The Bar makes a vital contribution to the efficient operation of criminal and civil
courts. It provides a pool of talented men and women from increasingly diverse
backgrounds from which a significant proportion of the judiciary is drawn, on whose
independence the Rule of Law and our democratic way of life depend. The Bar Council is
the Approved Regulator for the Bar of England and Wales. It discharges its regulatory
functions through the independent Bar Standards Board.
Overview
4. The Bar Council’s response is principally concerned with the proposals for enhanced
fee charging as set out in Part 3 of the Consultation Paper, especially those proposals
consulted on in Questions 16-18 and Question 24.
5. The Bar Council opposes the proposals for enhanced fee charging. These proposals are
to charge a court issue fee in money claims equivalent to 5% of the value of the claim, subject
to a cap of £10,000 or £5,000 for unspecified claims.
6. The object of these proposals is said in the Impact Assessment to be to, “raise the price
of court services, in areas where there is an untapped increased willingness to pay more”.
1 Ministry of Justice (2014) Court Fees: Proposals for reform
7. The Bar Council does not consider that these proposals target the pockets of the
willing but will restrict or deny access to the courts to those who cannot afford increased
fees. The effect of these proposals will be felt most severely by middle income individuals
and families and small to medium sized enterprises. These court users do not benefit from
fee remission and do not have the deep-pockets of those users the Impact Assessment
presumes would be willing to pay more.
8. The Bar Council has considered the qualitative evidence referred to in the Impact
Assessment to support the proposals for enhanced fee charging. It is the Bar Council’s view
that this evidence confirms its fear that the proposals for enhanced fee charging will have a
dramatic impact on access to justice and result in fewer cases being brought to the courts.
The Bar Council considers that a view to the contrary cannot be reasonably held.
9. It is the Bar Council’s view that the proposals for enhanced fee charging would deny
access to the courts and would be unlawful under section 92(3) of the Courts Act 2003.
10. The Bar Council also considers that the proposals for commercial proceedings will
cause real damage to the competiveness of the UK’s legal services. The worldwide market
for dispute resolution is highly competitive and international parties choosing the forum in
which to resolve their disputes are heavily influenced by costs and perceptions about costs.
These proposals, if implemented, would be very likely to lead to a serious loss of work from
the UK courts, its lawyers and support services (and hence also lead to a reduction in tax
income for the Government).
Cost Recovery
11. The following responses to this consultation are provided subject to the caveat that the
Bar Council does not, as stated in previous consultation responses, support the policy to set
fees on the basis of full-cost recovery.
12. The provision of a courts system is not merely a service that is provided by a public
body. The Bar Council remains of the view, expressed in previous court fee consultation
responses, that a fair, efficient and accessible civil justice system is one of the fundamental
pre-requisites of an effective democratic society. All members of society, and society as a
whole, benefit from the existence and proper administration of such a system and it is
therefore right that a significant proportion of the costs of the system should be borne by
taxpayers as a whole.
Question 1: What do you consider to be the equality impacts of the proposed fee increases
(when supported by a remissions system) on court users who have protected
characteristics? Could you provide any evidence or sources of information that will help
us to understand and assess those impacts?
13. The Bar Council considers that the Ministry of Justice’s Equality Assessment for cost
recovery at Annex B of the Impact Assessment correctly identifies the equality impacts of the
proposed fee increases. As the question recognises, a fair fee remission system is an essential
mechanism to address the equality impacts of court fees. The Bar Council considers that a
fair fee remission system is not the only necessary mitigation of these impacts but the
availability of free legal advice to those with the lowest incomes is also vital so that persons
with protected characteristics are not discouraged by court fees from bringing court cases.
Question 2: Do you agree with the premise of a single issue fee of £270 for non-money
cases? Please give reasons for your answer.
14. Yes. It is appropriate for a standard fee to be charged to reflect shared costs.
Question 3: Do you agree with the proposed fee levels for money claims? In particular, do
you agree with the proposal to charge the same fee for claims issued through the Claims
Production Centre that would be charged for applications lodged online? Please give
reasons for your answer.
15. Yes. It is appropriate to encourage court users to use methods of issuing claims that
result in lower costs to the court system.
Question 4: Do you agree with the removal of the allocation and listing fee in all cases?
Please give reasons for your answer.
16. Yes. Additional points for charging cause unnecessary complexity and can be a source
of confusion, especially to those entitled to fee remission who may not realise that an
application for remission has to be made for each fee.
Question 5: Do you agree that small claims track hearing fees should be maintained at
their current levels, which are below cost? Please give reasons for your answer.
17. Yes. The accessibility to the court system through the small claims track regime plays
an important role in upholding the rule of law. The parties to small claims track proceedings
are the court users most likely to have limited financial resources and it is right that small
claims track hearing fees should remain below cost.
Question 6: Do you agree that fast track and multi-track hearing fees should be
maintained at their current levels, which are above cost? Please give reasons for your
answer.
18. The Bar Council does not regard it as appropriate to charge at an above costs level for
these fees but it accepts that it is not realistic to expect a reduction in these fees at the present
time.
Question 7: Do you agree with proposals to abolish the refund of hearing fees when early
notice is given that a hearing is not required? Please give reasons for your answer.
19. The Bar Council does not agree with this proposal. The fee system should retain an
incentive to the parties to provide early notification that a case has settled.
20. The present lack of utility in the fee refunding arrangements may be due to the sliding
scale by which the amount of the fee that is refunded is reduced depending on how close to
the hearing the notification is given. This reduces the incentive for parties to settle in time to
recover the hearing fee. A simpler scheme by which 100% of the hearing fee is repaid if the
court is notified either 8 or 15 days before the hearing may produce better results as the
incentive to give early notification would be greater.
21. The Bar Council is also concerned that court users might consider that it is
unprincipled for HM Courts & Tribunals Service to retain, without good reason, a fee that
has been paid for a hearing that is not required.
Question 8: Do you agree with proposals to retain the current fee levels for private law
family proceedings and divorce, and the proposal to no longer charge a fee for non-
molestation and occupation orders? Please comment on all or any of these processes.
22. The Bar Council welcomes the proposal to no longer charge a fee for non-molestation
and occupation orders. These court users are vulnerable and it is right that access to the
courts should be made easier to them.
23. The Bar Council considers it is appropriate to retain the current fee levels for private
law family proceedings save for the fee for the issue of a divorce petition where the fee is
above cost price.
24. If the fee for a divorce petition is to remain at the present level the Bar Council
considers that it is appropriate that judicial resources should be directed so that divorce
petitions are considered more carefully at an earlier stage to identify any procedural defects
before the decree absolute is sought. Given the increased number of court users presenting
divorce petitions without legal assistance this may result in a saving of costs.
Question 9: Do you agree with the standardisation of the fee for Children Act cases, and
with the proposal that there should only be one up-front fee for public law family cases?
Please give reasons for your answer.
25. The Bar Council welcomes the proposal to charge a one up-front fee for public law
family cases at no more than full cost level.
26. The Bar Council considers that the proposed standardisation of the fees for Children
Act cases is reasonable.
Question 10: Do you agree with the standardisation of general application fees and fees
for applications within family proceedings? Please give reasons for your answer.
27. Yes. The effect of these proposals would be that applications in family proceedings
would cost the equivalent amount of general applications in other types of civil proceedings.
Question 11: Do you agree with the proposed fee levels for judicial review cases? Please
give reasons for your answer.
28. The important role of judicial review proceedings as a critical check on the state is
accepted in the consultation paper. The Bar Council does not support full cost recovery but
notes that the present fees on the Ministry of Justice’s financial modelling are lower than the
full costs.
29. The Bar Council is nevertheless concerned that the increased court fees for judicial
review claims are substantial and may discourage some court users from bringing judicial
review claims. The Bar Council notes with concern that there has been no research
conducted as to the likely impact of increases at these levels.
30. The Bar Council is also concerned that the proposed increases in fees for judicial
review applications should not be seen in isolation. There are a number of other proposals
presently being considered by the government which taken together with the proposed
increased fees could substantially affect the ability or willingness of court users to hold
public authorities to account by judicial review proceedings:
a. The Bar Council is concerned by the proposals in the recent consultation paper,
“Judicial Review – Proposals For Further Reform”. It is particularly concerned that it
is proposed that the Legal Aid Agency will not pay for work in judicial review
cases in which permission is refused. Parties receiving legal aid for judicial
review proceedings are not entitled to fee remission and the costs of the
application fee for judicial review proceedings must be borne by the solicitor.
The Bar Council does not consider it appropriate that the solicitor should bare
the risk of being out of pocket for the increased court fee as well as the risk of not
being paid for their work;
b. Although civil legal aid remains available for judicial review cases the Bar
Council is concerned that the proposals set out in the Ministry of Justice’s
consultation paper, “Transforming Legal Aid: Next Steps” to introduce a residence
test to the availability of civil legal aid, combined with these increased fees, will
have an adverse equality impact notwithstanding the availability of fee
remission.
Question 12: Do you agree with proposals to increase the fee for an application for grant
of probate to full-cost levels? Please give reasons for your answer.
31. The Bar Council does not support full cost recovery but does not consider that when
other fees are at a full-cost level a special case can be made that all application for grants of
probate should be below full cost.
32. The Bar Council notes however that the proposed increase is substantial in percentage
terms. An application for probate is not made by choice but due to the need to properly
administer an estate. Applications are often made for small estates. The Bar Council
considers that it would be appropriate for the lower fee to be retained for small estates.
Question 13: Do you agree with the proposed fee levels for cases taken to the Court of
Appeal? Please give reasons for your answer.
33. The Bar Council shares the government’s view that full-cost level charging for access
to the Court of Appeal is wrong in principle because of the importance of the Court of
Appeal’s role in establishing precedents applied by lower courts.
34. It is important that the Court of Appeal’s work reflects the whole range of civil
litigation and in that context the Bar Council considers that the proposed increases in fees
(more than 100%) are too high to justify without proper research into the impact that this
would have on court users.
35. The Bar Council also consider that charging a fee of just over £1,000 (£1,090) is
inappropriate for the hearing fee as this pushes the disposable capital threshold for fee
remission for this fee from £3,000 to £4,000. A fee of below £1,000 would be more
appropriate.
Question 14: Do you agree with the government’s proposed changes to the fees charged in
the Court of Protection? Please give reasons for your answer.
36. The jurisdiction of the Court of Protection is supervisory and it is important that
parties are not discouraged from making applications for the benefit of the protected party
by the need to pay an initial fee. The Bar Council considers that the present regime for the
hearing fee being due following an invoice should be retained.
Question 15: Do you have any further comments to make on the government’s cost
recovery plans?
37. No response.
Enhanced Fee Charging
38. By section 92(3) of the Courts Act 2003 the Lord Chancellor must have regard to the
principle that access to the courts must not be denied when making an order to prescribe the
court fees payable. The Bar Council does not consider that there has been proper regard to
this principle when the proposals for enhanced fee charging for money claims were
formulated.
Question 16: Do you agree that the fee for issuing a specified money claim should be 5%
of the value of the claim?
39. For money claims worth £100,000 a fee of 5% on issue represents an increase of 565%
from the present level. For claims of £200,000 the increase would be 784%. Claims of this size
are by no means exceptional and these substantial increases in fees will affect many court
users.
40. The Bar Council does not agree with the proposal to charge a fee of 5% of the value of
a money claim for two reasons:
a. The effects of this proposal will be detrimental to the interests of society. They
will exclude many of those who are not entitled to fee remission, especially
middle income individuals and families and small and medium size enterprises,
from the court system. They will have other undesirable and unintended
consequences.
b. The evidence relied upon in the Impact Assessment does not support these
proposals but demonstrates that court users will be deterred from issuing money
claims by enhanced fee charging.
Effects of enhanced fee charging
41. The Bar Council is convinced that enhanced fee charging will reduce the number of
claims issued.
42. Enhanced fee charging will particularly impact on middle income individuals and
families and small and medium sized enterprises which wish to bring medium sized claims.
These are the groups least able to bear enhanced fee charging because they do not have the
resources of larger organisations or wealthier individuals but receive only limited or no fee
remission.
43. The Bar Council is aware that many court users in these categories already find it
difficult to fund litigation from their own resources.
44. Companies receive no fee remission and individuals with assessable capital of more
£16,000 do not qualify for any fee remission if the fee is £7,001 (the proposed fee applicable
for money claims of £140,020 and above) or more than.
45. Requiring such users to pay large issue fees will create cash flow problems for court
users. The court issue fee must be paid up front when proceedings start. The commencement
of proceedings is the point in the dispute resolution process at which court users lose control
over the pace at which the dispute progresses. From then on they must comply with the
court’s directions regardless of the financial resources required to do so. Enhanced fee
charging will absorb scarce financial resources that are needed to fund litigation costs and
will mean that parties can either not afford to access the courts or will only be able to do so
without the benefit of professional legal support.
46. The Bar Council therefore believes that the enhanced fee charging system will reduce
the number of claims that are made by medium income individuals and small and medium
enterprises. In some cases these claims might be resolved by other, less expensive forms of
dispute resolution, such as mediation or religious courts, but in other cases disputes will not
be resolved at all.
47. The consequences of enhanced fee charging are not simply that fewer claims will be
issued. There will be other undesirable consequences:
a. The difficulty for small and medium enterprises bringing proceedings will
undermine commerce as there will be uncertainty that contractual terms will be
enforced,
b. Parties who do bring court proceedings are more likely to be unrepresented.
Cases where one or more party is unrepresented take up more of the court’s time
and resources,
c. The higher costs of commencing proceedings will cause a greater imbalance
where there is an inequality of arms between the parties. This will be exploited
by the richer party to the disadvantage of the weaker party in a variety of way,
for example:
i. The richer party will have a stronger bargaining position in any
settlement negotiation,
ii. The richer party may refuse to make settlement proposals at all knowing
that the weaker party cannot afford to commence proceedings, and
iii. There will be cases when the poorer party cannot afford the fee required
to bring a counterclaim in a claim brought against it by the richer party.
48. The reduction in caseload caused by enhanced fee charging may also have
unpredictable consequences for the viability and structure of the legal profession.
The qualitative evidence
49. The objective of these proposals is said in the Impact Assessment to be to “raise the
price of court services, in areas where there is an untapped increased willingness to pay
more”. The Impact Assessment assumes that user demand will not change in response to
increased fees from enhanced fee charging.
50. The Bar Council does not consider that the qualitative evidence demonstrates that
there is an untapped willingness by court users to pay greater court fees. The Bar Council
does not consider that the assumption that user demand will not change is based on a
reasonable interpretation of the evidence.
51. Four pieces of qualitative evidence are identified in the Impact Assessment.
52. The most significant piece of research on this issue is the 2007 Ministry of Justice
Research Paper, “What’s cost go to do with it? The Impact of changing court fees on users”. The
554 court users who were sampled were asked about the incremental impact that raising
issue fees by between £10 and £300 would have on their decision to go to court. In 131 cases
the court user was “claiming money back” (liquidated claims or claims for a specified sum
of money). In 26 cases the court user was “claiming compensation” (unliquidated claims or
claims for an unspecified sum of money including claims for personal injury). The effect of
an incremental increase in court fees had a significant effect on these users as shown in Table
10 from the 2007 research. This table is partially reproduced to include only the data relating
to money claims below.
Impact of incremental price increases on the decision to go to court by case type
Would
probably/definitely
not go to court
£10 £50 £100 £150 £200 £300
Claiming money
back
6% 16% 35% 47% 53% 58%
Claiming
compensation
0% 0% 15% 19% 19% 19%
Would
probably/definitely
still go to court
Claiming money
back
91% 80% 60% 48% 41% 36%
Claiming
compensation
96% 96% 81% 77% 77% 73%
53. The effect of the incremental increase was particularly dramatic for users “claiming
money back”. At a £10 increase a large majority of court users would probably/definitely
still go to court and a minority of court users would probably/definitely not go to court. A
£200 increase, however, was sufficient for this to be reversed. At this point the majority of
court users would probably/definitely not go to court and only a minority of court users
probably/definitely would still go to court. A further £100 increase in the fees saw a further
5% of court users change their minds and decide that they would probably/definitely not
still go to court.
54. The only reasonable conclusion that can be drawn from this evidence is that the
decisions of court users who are claiming specified sums of money are highly sensitive to
even incremental increases in court fees.
55. The effect of incremental increases in court fees on those claiming compensation is also
significant. The increase of court fees by £300 was sufficient for 19% of court users to decide
that they would probably/definitely not go to court whilst the number of those who would
probably/definitely still go to court fell to 73%. The Bar Council considers that if the research
were repeated in 2014, following the implementation of the Jackson reforms, the number of
court users claiming compensation which would probably/definitely not go to court, would
be much greater.
56. The Impact Assessment refers to the 2007 Ministry of Justice Research Paper but
makes no mention of this important evidence of strong price elasticity amongst the very
court users that would be subject to enhanced fee charging.
57. The second piece of qualitative evidence is the Ministry of Justice’s internal qualitative
research carried out in 2013. The Bar Council does not consider this research provides any
evidential basis for the introduction of enhanced fee charging. The research is based on a
small sample of interviews (18) and does not include the views of any court users other than
large organisations. The paper itself recognises its limitations, in particular, that it “was not
designed to produce results which are representative of all court users and the views of
other types of court users (such as individuals and small businesses pursuing money
claims…) may be quite different.” It is precisely these classes of court user that the Bar
Council believes will be put off bringing court claims if enhanced fee charging is introduced.
58. It also appears that many of the respondents to the 2013 research had limited or no
experience of specified money claims of the size where enhanced fee charging would
actually apply in the proposals as formulated (i.e. claims of £10,000 or more) as they seem to
have either worked with claims worth up to £5,000 or to have outsourced more
complex/higher value claims.
59. The Ministry of Justice researchers’ uncovered evidence that supports the Bar
Council’s concern that many small and medium enterprises do not have the resources
available to pay court fees at enhanced rates. The researchers found that debt solicitors who
relied on smaller business clients had seen volumes reduce in recent years. These solicitors
suggested that a possible reason for the decline was that small firms were cutting back on
their legal expenses.
60. The third piece of qualitative evidence produced by the Ministry of Justice is its
internal Civil Driver-Based Forecasts. These have concluded that minor fee changes at issue
that have occurred since 2000 have not had a significant impact on caseload. The changes
proposed by enhanced fee charging will not be akin to the “minor” changes that have
occurred since 2000. The Bar Council does not consider that this evidence supports the
assumption that enhanced fee charging will not change caseload volumes.
61. The fourth and final piece of qualitative evidence is a reference to Appendix 9 of the
Review of Civil Litigation Costs: Preliminary Report. This appendix relates to the costs of a
number of substantial pieces of commercial litigation which are not representative of the
types of medium sized cases that the Bar Council is most concerned about. At paragraph
7.14 of the Preliminary Report Lord Justice Jackson said of the costs in the cases in Appendix
9 (which averaged over £800,000) that, “It can be seen that in most of these cases the costs
involved were substantially less than, and were proportionate to, the sums at stake in the
litigation, and that a relatively high proportion of costs claimed were recovered”. The
Appendix 9 cases therefore represent the most substantial kinds of commercial litigation and
do not reveal anything about the costs incurred by medium income individuals or small to
medium sized enterprises bringing medium sized cases.
Question 17: Do you agree that there should be a maximum fee for issuing specified
money claims, and that it should be £10,000?
62. The Bar Council agrees that if enhanced fee charging is introduced there should be a
maximum fee. The Bar Council accepts that if there is a cap the court issue fee will be in
substance a form of regressive taxation falling most heavily on those bringing medium sized
claims. However, if there is no cap at all the sum of money required to commence
proceedings is more likely to be prohibitive.
63. The Bar Council does not agree that the maximum fee should be £10,000. The
maximum fee would be payable on a claim of £200,000. Such claims are not uncommon and
are not brought exclusively by claimants with substantial financial resources. Very often
parties bringing claims of this size are individuals with medium sized incomes or small and
medium enterprises. These court users already often struggle to fund each stage of litigation.
As the 2007 Ministry of Justice research paper shows the imposition of a court fee of £10,000
that must be paid upfront is likely to put off many court users from bringing money claims
to court.
Question 18: Do you believe that unspecified claims should be subject the same fee
regime as specified money claims? Or do you believe that they should have a lower
maximum fee of £5,000? Please give reasons for your answer.
64. As the consultation paper recognises, unspecified money claims include claims for
personal injuries. Although the Equalities Assessment for this proposal identifies that these
proposals may affect persons with a disability the assessment underestimates the impact of
this policy on disabled persons.
65. The Equalities Assessment considers that “a small proportion of people bringing
personal injury claims may have a disability”. The Bar Council considers that this starting
point fails to have proper regard to the fact that many persons bringing personal injury
claims have become disabled by reason of the injury for which they are seeking
compensation. These court users are often not working or suffer a handicap on the labour
market. Compared with non-disabled court users bringing unspecified money claims,
disabled persons bringing claims for personal injury will be disadvantaged by these
proposals because they are more likely to need to use their capital for living expenses.
66. The courts do not at present have jurisdiction to award pre-action interim payments
against potential defendants from which enhanced fees might be funded.
67. The qualitative evidence of costs in personal injury cases presented to Lord Justice
Jackson suggests that a court fee of £5,000 could represent a significant proportion of the
costs of a personal injury claim worth £100,000 or more. Appendix 10 of the Review of Civil
Litigation Costs: Preliminary Report showed average base costs incurred post-proceedings (but
not including trial) for one firm varied between £9,709 and £21,015 depending on the type of
personal injury claim (employer’s liability claims or road traffic claim). A fee of £5,000 on
issue would therefore represent a substantial proportion of the costs incurred at this point in
the proceedings.
68. The consultation identifies 4 factors that may determine whether or not enhanced fee
charging would deter these claims from being brought.
Funding through conditional fee arrangements
69. The Bar Council is aware that some solicitors fund court fees as disbursements for
clients instructing them under conditional fee arrangements. Considerable caution needs to
be given to this as a factor that would prevent claimants from being discouraged from
issuing personal injury claims:
a. The enhanced fee charging that is proposed represents a substantial increase
from the present fee level (up by 565%). It cannot be assumed that solicitors will
be able to afford to treat fees at this level as a disbursement. The Bar Council is
concerned that firms of solicitors acting on CFAs are already facing cash flow
problems and would find it difficult to pay fees at enhanced levels.
b. The model of funding claims by conditional fee arrangement is likely to undergo
substantial changes as a result of the Jackson reforms which came into force on 1
April 2013. Enhanced fee charging should not be considered for personal injury
claims until the wider effects of the Jackson reforms are known.
Fee remission
70. The Bar Council is concerned that a maximum fee of £5,000 will leave many people
with serious personal injuries outside the scope of fee remission and unable to pay the court
fee. These individuals may not be working because of their injuries and their capital may be
needed for living expenses.
71. A personal injury need not be of the most serious kind before the claim is worth
£100,000, at which point it would attract the proposed maximum enhanced court fee of
£5,000. Whilst the lower maximum fee would mean that fee remission would be more
available than if the maximum fee were £10,000, the difference of the qualification criteria is
not particularly significant. The disposable capital threshold for a fee of £5,000 is £10,000
whereas the disposable capital threshold for a fee of £7,001 or more is £16,000.
72. Unless there is significant alteration to the thresholds for fee remission individuals
with disabilities and those with medium incomes or medium amounts of disposable capital
will be disproportionately affected by these proposals.
Costs are normally recoverable from the losing party
73. Although costs are normally recoverable from the losing party this general rule does
not solve the problem for a claimant facing a substantial enhanced court fee before it can
commence proceedings. The fee still needs to be paid at the commencement of proceedings
and there is no guarantee that the litigation will succeed.
After the event insurance
74. It is unclear why or how the availability of after the event insurance would affect a
claimant’s consideration to bring a claim when faced with a substantial enhanced court fee.
After the event insurance protects the claimant from the adverse cost consequences of losing
the litigation. It would not assist with the payment of enhanced court fees.
Question 19: Is there a risk that applying a different maximum fee could have unintended
consequences? Please provide details.
75. The difference between a specified money claim and an unspecified money claim is
reasonably clear but parties may bring both specified and unspecified money claims on the
same claim form in order to pay the lower fee for an unspecified money claim.
Question 20: Do you agree that it is reasonable to charge higher court fees for high value
commercial proceedings than would apply to standard money claims?
76. The Bar Council opposes enhanced fee charging but recognises that Parliament might
contemplate that if the power conferred under the Anti-social Behaviour, Crime and
Policing Bill to prescribe court fees that exceed the cost is to be used at all it would be in
relation to high value commercial claims between well-resourced parties.
Question 21: We would welcome views on the alternative proposals for charging higher
fees for money claims in commercial proceedings. Do you think it would be preferable to
charge higher fees for hearings in commercial proceedings? Please give reasons for your
answer.
77. The Bar Council considers that Option 1 is preferable. Option 2 is more likely to
aggravate the problems of enhanced fee charging for small and medium enterprises and
individuals with a medium income.
Question 22: Could the introduction of a hearing fee have unintended consequences?
What measures might we put in place to ensure that the parties provided accurate time
estimates for hearings, rather than minimise the cost? Please provide further details.
78. The Bar Council considers that appropriate case management by the courts should
mean that the parties’ estimate of the hearing length is likely to bear a reasonable relation to
the actual time taken.
Question 23: If you prefer Option 2 (a higher maximum fee to issue proceedings), do you
think the maximum fee should be £15,000 or £20,000? Please give reasons for your answer.
79. No response.
Question 24: Do you agree that the proposals for commercial proceedings are unlikely to
damage the UK’s position as the leading centre for commercial dispute resolution? Are
there other factors we should take into account in assessing the competitiveness of the
UK’s legal services?
80. The Bar Council considers that these proposals will damage the United Kingdom’s
position as the leading centre for commercial dispute resolution and undo much of the good
work done by the Ministry of Justice through its excellent “Plan for Growth”. We consider
that these proposals, if implemented, would be very likely to lead to a serious loss of work
from the UK courts, its lawyers and support services.
81. Our competitors already argue that London is an expensive venue for dispute
resolution and these proposals would encourage them in this regard. The Foreword to the
Ministry of Justice’s “Plan for Growth” recognised the importance of cost when decisions
about dispute resolution are made. The Lord Chancellor and Secretary of State for Justice,
and the Minister for Trade & Investment wrote that:
“While the UK’s excellence and reputation is undoubted, costs and speed may affect
where companies choose to resolve their disputes. We intend to do all we can to
protect our competitiveness and build on our success.”
These proposals will undermine our competitiveness.
82. Given the likely loss of work from the UK courts, the Bar Council is unconvinced that
there will be a net gain in revenue to the government from these proposals once lost tax
revenue from substantial international commercial litigation is taken into account.
83. The United Kingdom is rightly proud of the reputation that London has as a forum for
the resolution of international commercial disputes. The benefit to the United Kingdom
economy of this work has been recognised by the government’s investment in the Rolls
Building. That investment implicitly recognises the highly competitive nature of the market
for international litigation. The intensification of worldwide competition for legal services as
more international cities compete with London and other UK jurisdictions as hubs of legal
expertise was also recognised by the Ministry of Justice in its “Plan for Growth”.
84. Much of the international work heard in the Rolls Building comes because the parties
voluntarily agree to jurisdiction clauses which select London courts. Often but not
necessarily they will also choose English law. A number of our competitors are promoting
the possibility of still using English law but choosing their courts or arbitration centre. It
would be very short sighted, at a time of fierce competition, to introduce proposals which
would substantially undermine our competitiveness and which would therefore damage the
UK’s reputation in this market. Reputation in particularly important in this market, where
decisions as to choice of jurisdiction are often made relatively quickly and based on
perceptions held by the relevant lawyers or commercial negotiators. Our competitors
already focus on cost as a reason for not litigating in London, arguing that their jurisdictions
offer more cost effective dispute resolution, whether through courts or arbitration. With
other jurisdictions currently looking to set up international commercial courts, it would be
highly damaging to introduce these charges.
85. The Bar Council is concerned that the proposals for enhanced fee charging in
commercial proceedings will substantially undermine London’s attractiveness as a centre for
international litigation. As the research conducted for the Ministry of Justice by the Centre
for Commercial Law Studies at Queen Mary shows, the proposed fees would make court
fees in London the most expensive in the world. The only jurisdiction that charges issue fees
comparable to those proposed is the Dubai International Financial Centre. The Bar Council
is particularly concerned that in the courts of New York, which is London’s closest
competitor, it costs as little as $400 to issue a claim. The Bar Council anticipates that New
York attorneys will not be slow to seize on any significant disparity in court fees to the cost
of the United Kingdom economy.
Question 25: Do you agree that the same fee structure should be applied to all money
claims in the Rolls Building and at District Registries? Please give reasons for your
answer.
86. No. To extend the same fee structure to all claims in the Rolls Building and District
Registry would capture many claims that are not in any way “commercial proceedings” and
where there is no reason to suppose that there is “an untapped increased willingness to pay
more”.
87. Claims in the Rolls Building do not necessarily involve businesses for example:
a. Claim in the Chancery Division can be between individuals in a domestic
context,
b. Claims in the Technology and Construction Court include claims by
homeowners in respect of work done to their homes, and
c. Claims in the Admiralty Court include claims for personal injuries that have
been caused by accidents at sea.
88. If the proposal were extended to all courts sitting in the Rolls Building it would
include the Intellectual Property Enterprise Court (formerly the Patents County Court). This
court was established in 1990 to provide a less costly and less complex alternative to the
High Court, Patents Court. This object would be undermined if it were treated as a court
hearing “commercial proceedings” for the purposes of the proposals in this consultation.
Question 26: What other measures should we consider (for example, using the Civil
Procedure Rules) to target fees more effectively to high-value commercial proceedings
while minimising the risk that the appropriate fee could be avoided?
89. Case management under the Civil Procedure Rules is already used to prevent parties
paying too small an amount in court fees (e.g. by under valuing a claim when it is issued)
and can be used to resolve any new issues that might arise with a new fee charging
structure.
Question 27: Should the fee regime for commercial proceedings also apply to proceedings
in the Mercantile Court? Please give reasons for your answer.
90. No. Many cases heard in the Mercantile Court are not between well-resourced
organisations but involve small and medium sized enterprises and individuals with
medium sized incomes who could not afford the larger fees proposed.
91. The implementation of enhanced fee charging for proceedings in the Mercantile Court
would leave these parties to issue their claims in the county court when by reasons of their
complexity and importance their cases required consideration by a judge with specialist
expertise. This would in effect create a tiered court system in which access to a specialist
tribunal was dependent on wealth.
Question 28: Do you agree that the fee for a divorce petition should be set at £750? Please
give reasons for your answer.
92. The Bar Council does not consider that it is appropriate for enhanced fee charging to
be applied to divorce petitions. The consultation paper does not put forward any principled
reason why these court users, who are necessarily experiencing unfortunate personal
circumstances, should be used to subsidise others.
Bar Council
January 2014
For further information please contact
Jan Bye, Head of Professional Affairs
The General Council of the Bar of England and Wales
289-293 High Holborn, London WC1V 7HZ
Direct line: 020 7242 0082
Email: [email protected]