LSLA | LSLA response to "Civil Court Fees"

LONDON SOLICITORS LITIGATION ASSOCIATION

Response to Civil Court Fees Consultation Paper Code CP10/04

INTRODUCTION

The London Solicitors Litigation Association (LSLA) is over 50 years old and represents the interests of a wide range of litigators in London handling a broad range of civil and commercial litigation. Through its 950 solicitor members and strong links with a wide number of professional bodies, it represents nearly all civil litigation practices in London. The LSLA operates through a Committee of some 15 members, which includes members of the Civil Justice Council, Civil Procedure Rules Committee, Law Society Civil Litigation Committee and local Law Societies. The Association has a long track record of responding in consultation papers, and has drawn on a wide range of views in responding to the current consultation paper.

GENERAL

Before dealing with the specific questions posed in the questionnaire at the end of the consultation paper, we have a number of general comments.

1. As is set out in paragraph 4.1 of the paper, the general policy of the Government that fees should normally be set to recover the full cost of a service is subject to exceptions in particular instances. The paper makes it clear that comments are not sought on the generality of the policy, which we entirely accept, but the extent to which exceptions to the policy are appropriate is a matter that should be kept constantly under review. We believe the following considerations are relevant to such a review.

1.1. The other central policy plan underlying the consultation paper is said to be the need to protect access to justice. The volume of cases passing through the civil courts has decreased significantly in recent years. Opinions differ as to the reason for this. Some part of the decrease may be attributable to the procedural changes encouraging early resolution of disputes, but there is concern that cost considerations such as legal aid changes and greater front-loading of costs may also be having an adverse impact. Increases in court fees can only add to this impact.

1.2. The importance of the last point is magnified by the fact that the Government has now made it clear [GIVE REFERENCE] that its policy is actively to reduce the number of cases (although this seems hard to reconcile with enabling access to justice). The combined effect of this policy and a policy of full cost recovery is inevitably to charge more and more to fewer and fewer litigants. There must be limitations on the viability of such a course.

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1.3. "Full cost recovery" is itself a flexible concept, depending on how the "full cost" is calculated. For example, we understand that it is the practice of the Treasury to charge notional interest on the value of assets utilised by the Court Service. This is not a real cost, but simply a way of adjusting accounts between one arm of government and another, yet apparently it is treated as part of the "cost" that is sought to be recovered from current court users. We can see no justification for that.

1.4. A similar point arises in relation to the cost of judges. Clearly, unlike interest on the value of assets used, that is a real cost but no necessarily one that we would expect to see borne wholly by users of the court service. It is surely part of the cost of providing a functioning and effective system of justice in the interests of the community as a whole, not merely those who at any particular time happen to be litigants.

1.5. For the reasons given in the previous two paragraphs, full cost recovery has arguably already been effectively achieved before the changes proposed. However, even on the figures contained in the consultation paper, the effect of the recommendations is that leaving on one side family cases (where full cost recovery is accepted as being impractical) there will be full cost recovery over the remaining jurisdictions. It must therefore presumably be accepted that if these proposals (or something like them) are implemented, there can be little scope for further increases, other than to reflect actual cost increases.

1.6. It is worth pointing out that a considerable contribution to the IT infrastructure of the courts is already being provided by the private sector. As the Court Service has been unable to date to fund the provision of computerised transcription facilities in the High Court, it is very common in the type of high-value commercial cases with which our members frequently deal, for those facilities to be paid for by the litigants themselves and made available to the presiding judge.

1.7. It should also be borne in mind that the court system does not operate in a commercial vacuum. Many of the cases that our members handle would potentially be suitable for arbitration, or have international ramifications that give rise to issues as to choice of jurisdiction. Any attempt to impose disproportionately high court fees on such cases may well have the wholly counter-productive effect of driving out of the system those litigants who currently provide substantial invisible expert earnings for the legal services sector. We enclose as an Appendix to this note some examples showing the comparative costs of a typical action, both before and after the proposed changes, as well as in other European jurisdictions.

2. For all these reasons we believe that the Department is seeking to proceed too far and too fast with the present proposals, which we believe should be reconsidered. We now turn to the specific questions posed in the questionnaire.

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Question One: Please indicate which fees, in which jurisdiction, you think should be set at a different level. What level do you advocate and what are the reasons for your views?

and

Question Two: Are there any particular changes proposed that you strongly support or oppose? What are your reasons?

We answer these questions together.

We do not intend to comment on many individual fee proposals. We refer to what has been said above concerning the philosophy underlying the proposals. We also question whether any assessment has been made of the actual cost to the Court Service of providing particular services or whether the proposals represent merely an across-the-board increase of charges on the basis of a judgment of "what the market will bear".

In relation to individual proposals, we have the following comments.

While we do not object in principle to the suggestion of an increase in claim fees, we share the view of the Litigation Committee of the City of London Law Society (CLLS) that the banding should be simplified. We support their idea of having no more than three bands, one of £700 - £800 for claims of £150,000 or under, an intermediate fee of around £1,300 for claims between £150,000 and £1million, and a fee of £2,000 for claims over £1million. We are not in a position to calculate what impact such a scale would have on the level of costs recovery, but it seems clear that it would yield more than the banding scale proposed in the consultation paper.

We also share the view of the CLLS in strongly opposing the idea of hourly charges for court time. The examples contained in the Appendix to this paper demonstrate the effect that such charges will have in making the English Supreme Court an unattractive one in which to litigate. Furthermore, the consultation paper itself acknowledges that trial fees are "relatively ineffective at raising revenue" and that it will be possible to avoid such fees by bringing proceedings in a county court. Some litigants will undoubtedly take the latter course, hereby accelerating the trend for the burden of court fees to fall on a dwindling number of cases. Litigants should not be penalised because they have been unable (very possibly through no fault of their own) to settle proceedings prior to trial, and the existence of such fees is bound to be used by some parties as a weapon to bring unfair economic pressure on their opponents prior to trial.

We see no justification for the substantial increase proposed in the fee for a detailed assessment hearing. We do not understand why it is necessary to move away from the previous system under which the fee was directly related to the quantum of fees awarded, and which we suspect yielded greater fee income than the current arrangements. We would

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favour a return to that system, or at least a system of banding to relate the fee to the amount of costs claimed.

Question Three: If you think more could be done to improve the level of cost recovery by introducing new fees what would you propose?

As we have pointed out above, the proposals already provide that, leaving family cases out of account, there is full cost recovery. We do not believe anything more should be done to "improve" this level.

Question Four: What is your view on the proposal that a single cost recovery target be set covering county courts and the Supreme Court (retaining separate targets for Family, Insolvency and Probate)?

We have no objection to the concept of a single cost recovery target which we believe to be consistent with the trend to view the Supreme Court and county courts as a single system of civil justice. It is, however, wholly inconsistent with the proposal that certain types of fee, such as the hourly trial fee, should be confined to the Supreme Court only.

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