Oral evidence: Courts and tribunals fees and charges HC 396Wednesday 9 December 2015

Oral evidence, 9 December 2015.

Witnesses

Derek Bambury, Forum of Insurance Lawyers, and Anthony Abrahams, Director General, Chartered Institute of Arbitrators, gave evidence.

Chair

Good morning, gentlemen. It is nice to see you. Thank you very much for your patience and for coming to give evidence. We are interested particularly in the evidence you have given around the international competitiveness aspects and so on. Do you have any views, more generally perhaps, from the insurance point of view or otherwise, in terms of the domestic effects of the current fees regime? Is that something that you are aware of from your take on things?

Derek Bambury

Good morning, everyone. My name is Derek Bambury. I am the senior partner of Browne Jacobson. I represent the interests of the Forum of Insurance Lawyers. On the wider issues raised by the proposed further increases, I endorse a lot of what Sarah Crowther said in the previous panel. It appears that a lot of the reassurances that the Ministry of Justice attempts to draw from its own research—that it would not be impactful—seem to be based as much on perception, rather than evidence, as to their rejection of some of the research they commissioned as to the impact. The court fees are already significantly higher than they are in comparable jurisdictions. The proposal that there be a further increase is of concern, even though in the context of personal injury litigation it is proposed that it be exempted.

Chair

Mr Abrahams, are there any thoughts from your end? Perhaps you would introduce yourself.

Anthony Abrahams

I am Anthony Abrahams. I am the director general of the Chartered Institute of Arbitrators. We come at this from a completely neutral perspective. Indeed, we are mandated globally to encourage the settlement of private disputes by means other than in the court. In one sense, putting up the court fees is fulfilling our objective, but it is not what I would encourage. To deal with it, we want to work in partnership with the court system, but that should be the ultimate tribunal that you resort to. We know from statistics that 75% of mediated claims are settled on the day, and a further 11% follow behind. As far as arbitration is concerned, that too is now being encouraged, most recently by the Family Division President. Again, we know that in the arbitration world it is a more consensual way forward and it is one that we obviously espouse. Indeed, we have just launched our small business claims arbitration of taking claims from £5,000 to £100,000 for a fixed fee, so that limits the exposure that any party would have towards any costs and their recovery of costs, and allows them to get an award within 90 days. That contrasts quite well with the court process, where even small claims are now taking something like 37 weeks from issue to a hearing.

Mr Hanson

We have received a lot of written evidence that emphasises the importance of the legal services market to the United Kingdom and London in particular. We have seen figures ranging at around £22 billion. I would welcome, first of all, both your assessments of what you believe to be the UK’s share of the international market, and whether that is growing or receding in the current climate.

Anthony Abrahams

The market, certainly in the arbitrational field, is that we have about 7% of it in the UK. I have to be careful here because we are a global organisation and 66% of our membership is outside England and Wales. We are under considerable threat. Singapore is the example that one always quotes. They subsidise the arbitration field. They have just started their SICC—the SIC Court is perhaps not the right way to say it. The Singapore International Commercial Court is now taking cases in competition with the Rolls Building, the TCC, so we cannot sit on our laurels. Forty per cent. of arbitrations are still conducted under English law, and that is a product that is welcomed worldwide, but, again, we are under substantial competition from the civil law processes. Of course, the ICC, the International Chamber of Commerce, has been in Paris since about 1923 and attracts a huge amount of cases from the international mercantile community.

Derek Bambury

I do not have access to what would be the total global market for international litigation, and it would be difficult in any case to have access, because we are not talking about the sum total of all of the litigation that may be conducted in the different fora around the world; we are talking about litigation that could be conducted in the UK courts, and in London in particular, according to choice of law clauses and jurisdiction agreements, but could be elsewhere. That is not a figure that I am able to give any real assistance on. On the second point about whether we are maintaining our competitiveness moving forward or receding—again, it has to be slightly anecdotal—echoing the comment that Anthony has just made, we feel that the UK courts cannot, in any sense, be resting on their laurels, because, although we perhaps have a historical advantage in terms of the expertise of the judiciary and the level of resource that the English and UK courts can offer, a number of rival jurisdictions are gearing up. Singapore has already had a mention. That is the most obvious example: a very expert court that is clearly setting its cap at international litigation that is relatively free-standing in terms of where it might be conducted.

Mr Hanson

I suppose the question would be, considering the New Yorks, the Dubais, the Singapores and the New South Wales’s of this world, which are increasing their challenge to UK dominance in this sector, how much would the increase in fees be a determining factor, or is it simply on other qualitative standards that they are moving to those other markets?

Derek Bambury

First, it depends on the two alternative proposals. In the interest of balance, if the fee is increased to an increased, capped, level of £20,000, in the context of the highest value litigation, it is probably not going to be a determining factor, and there will be more potent considerations, such as whether the litigation is going to be conducted in a cost-shifting jurisdiction or not. The alternative proposal that is at least mooted, which is that there would be a straight ad valorem 5% fee without any cap, would be impactful at every level of dispute, because by definition the higher the value of the claim, the higher the value of the fee. English court fees are already significantly out of kilter with other jurisdictions, with the exception of Dubai.

Mr Hanson

The MOJ in its impact assessment cited a report from the British Institute of International and Comparative Law that says that fees are not a determining factor in whether to litigate. I would welcome a view as to whether you share that analysis or not.

Anthony Abrahams

There is a complete basket that you have to look at. It is our centenary year. We launched something called the London principles for where you would wish to arbitrate. One of the factors is the friendliness of the courts, and that is the biggest one. The support that arbitration gets under the English Act and the judges who support it is huge, but that does not mean that you physically have to come to London, and this is the problem. The minute you start putting fees up, we become far less attractive here. It is not a determining factor, but certainly if we starting looking at 5%, that is going to be weighed in the balance and will become a major factor, whereas at the moment it is not.

Mr Hanson

What about the fact that some parties would pay £100,000 in arbitration fees, potentially? I am not defending the Government, but is that not a benchmark figure that the Government would look at and say, “If someone is going to pay £100,000 in arbitration fees, what is the current fee level we are proposing versus that?”

Anthony Abrahams

But that £100,000 goes into administration, not just to the arbitrators, which is something we do not do here with the judges at the moment. Again, when you look at the comparative overall costs, it is still just cheaper to arbitrate, but by putting the fees up it becomes less attractive to come and litigate and enforce in the English courts. That is the worry.

Mr Hanson

I suppose the MOJ’s argument, which we have to examine, would be that arbitral fees are a reasonable piece of evidence that could be drawn into the equation when considering the level of court fees.

Anthony Abrahams

I do not disagree with that. You have to look at the totality of the costs. Currently you pay one fee to enter the portals of an English court. If you go to an institutional arbitration, you get the whole administrative service, including the arbitrator’s fee, but you can then extract that if you go for what is called an ad hoc arbitration where you negotiate your own fee with the arbitrator and you provide your own infrastructure to surround it—how you want to have a hearing room, where it is going to be and so on. You have that option. The problem is that, if we start pushing the prices up here, people will go for cheaper locations to have their arbitrations.

Marie Rimmer

Mr Abrahams, judges have no financial interest in the judicial process, but arbitrators may if it comes down to time spent. What is your answer to that?

Anthony Abrahams

The arbitrators come in and they have an agreed fee from the parties, that is fixed right at the start. If they do not like the fee, they cannot subsequently up it, because there is a contractual relationship between them.

Marie Rimmer

It is not on time spent.

Anthony Abrahams

No. It would be a fact that the arbitrator takes into account when assessing whether he wants to take the case or not.

Alex Chalk

Leaving aside the proposed increases at the moment and looking at the existing ones—the ones that came in in March 2015—what do you say about those in terms of their impact on our international competitiveness? Can we absorb them, or are they in and of themselves going to cause a problem?

Derek Bambury

If the Ministry of Justice is going to take an evidence-based approach, it is too early to say.

Alex Chalk

I realise that it all comes heavily caveated, but what is your feeling?

Derek Bambury

It is just too early to say, in terms of monitoring the numbers of claim forms being issued out of London, whether the deterrent effect of increasing what was still, even in March 2015, a widening of an already existing gap in the cost of paying for court resources is going to have an impact. One of the reasons is that the full effect of any loss of competitiveness of London and the UK as a venue for resolving commercial disputes is going to be felt, ultimately, when the choice of English law and English courts is being cited in choice of law clauses and jurisdiction clauses, when other nominations start to be put in. Of course, that is a very early stage, and the tail of the process may not play out for quite some time. It is too early to say whether we are already going down completely the wrong route.

Alex Chalk

I do not want to take up too much time, but on the basis of the figures and your experience—you live and breathe this stuff—would you expect it to have a difference? You know what people’s motivations are. They take into account the quality of the judges, the quality of the advocates and all sorts of competing considerations. Would you expect it to have a difference?

Derek Bambury

I do not think the rise of £10,000 is going to be material in the overall equation.

Anthony Abrahams

That is what I was going to say. Where we have commercial interests who are going to arbitrate, £10,000 is probably not a barrier, but if you start putting 5% or whatever into it, you have a huge problem.

Alex Chalk

That is really your point, isn’t it? It is the 5%.

Anthony Abrahams

That is it, yes. The MOJ has put a toe in the water, but we would not want it to put the whole foot in.

Alex Chalk

Very quickly, so that we can understand, what is the average quantum of the kind of claims you are talking about?

Anthony Abrahams

The average is in millions.

Alex Chalk

Very generally, the point is that £10,000 would not make a difference and £20,000 probably would not, but 5% would.

Anthony Abrahams

Yes.

Alex Chalk

That was what I wanted to know.

Chair

That puts it quite neatly, doesn’t it? I understand that. The bigger the quantum, the more that comes in. Are there any other questions for Mr Bambury and Mr Abrahams from my colleagues? Brevity is no discourtesy. You have made the point very clearly and we are grateful to you for your evidence. Thank you very much. Examination of Witnesses

Witnesses

Jo Edwards, Chair, Resolution, and Carita Thomas, Co-convenor, Legal Aid Working Group, Immigration Law Practitioners’ Association, gave evidence.

Chair

Good morning. Thanks for coming to give evidence to us. Perhaps you would like to introduce yourselves.

Carita Thomas

My name is Carita Thomas. I am an immigration solicitor and represent the Immigration Law Practitioners Association.

Jo Edwards

I am Jo Edwards. I am a practising family lawyer and family mediator. I am here as national chair of Resolution, which represents about 6,500 family professionals who work with separating couples.

Chair

Thank you very much. Just out of interest, perhaps I can start, Ms Edwards, with some of the written evidence that you have given. Again, we are grateful to both of you and your organisations for doing that. I was struck by a passage in Resolution’s evidence that says: “the case for setting fees purely on the basis of the cost of the service provided by the courts has not been made in relation to family proceedings.” What did you mean by that? Why?

Jo Edwards

In relation to family proceedings, there are various things that we would say. First and foremost, unlike most of, if not all, the witnesses from whom you have heard this morning, divorce is not a choice, unless you decide that getting divorced is a choice. We say that it is not when people have reached that conclusion if their marriage is an unhappy one and they want to dissolve it. If that is the decision they have reached, they have to pay the court fee, whether they resolve things through mediation, which is what I would always advocate, or otherwise. This is not an optional fee. It is something that has to be paid come what may. The second point, as far as the cost of the actual administrative process of divorce is concerned, is that, as things stood about a year ago, the cost of that was put at £270. If one is assuming that the fee will go up from £410 to £550, a significant profit is being made on that. This is all against a backdrop of quite a rapid move in family proceedings towards a very much more administrative process. As I am sure the Committee is aware, with effect from last November we have moved to 11 regional divorce centres. Legal advisers are looking at divorce petitions and deciding whether the case for a divorce has been made out. Legal advisers are looking at things at the decree nisi stage. If anything, I would expect that the cost of the divorce process is going down but, at the same time, this in turn would potentially be impacting on some of the most vulnerable in society.

Chair

Thank you. But if you are setting a fee, the cost of the proceedings is a perfectly legitimate and proper thing to take into account, isn’t it?

Jo Edwards

Of course. Absolutely so, but only two years ago the fee was increased to £340; in fact, it is £385 all in because there is a separate fee for a decree absolute. We have gone to a position where £750 was being mooted, which, frankly, would have deterred very many people from pursuing divorce proceedings at all, to £550 now. The move has been quite a quick one and completely unjustified by reference to what this is costing as a service.

Dr Huq

You have already given your view on the original increase from £340 to £410, and now the proposed increase to £550, especially at a time of dwindling legal aid. What is your view on the effectiveness on the fee remission system in relation to divorce proceedings?

Jo Edwards

I have tried to get some opinion from our members around the country of whom, as I have said, we have 6,500. The overwhelming sense I get from members is that the fee remission scheme in family proceedings in relation to the divorce fee just is not working, for the reasons you have heard already this morning. First and foremost, the capital and income thresholds are so low that they are not making a realistic difference. The other main point that came across from very many of our members is that people just do not know about it. They do not know that it is available to them. At a time when fewer and fewer people are actually taking legal advice, and therefore are not being signposted, they are not going to know about this. I could talk about the figures of people who are in relationships where there is domestic abuse; there are about 1.2 million women in this country, and very many men as well, who are subjected to domestic abuse. Very often, a form of abuse is financial control. These people cannot see a way out. They cannot see how they are going to access legal advice and, in direct answer to your question, they will not know about the fact that fee remission is available. They may well just be staying in unhappy relationships and marriages. I am bound to say, much as with LASPO, that the lack of impact assessment means that for me and for our members it seems as though there could be whole strata of society that we do not know about who are not accessing their rights and who are not pursuing divorce proceedings. In turn, that means they are not able to access financial remedies and other remedies that may be available to them. Potentially, they are remaining dependent on the state. If they are pursuing their rights, they are more likely than not doing it as litigants in person, and therefore there is an additional burden on the family courts, which is very well rehearsed—approximately a threefold increase in the number of cases in family proceedings where both parties are representing themselves. All around, we have all these factors coming together and it is very difficult to see, in truth, where the savings are being made, but we are absolutely clear that the appropriate place for this is not by increasing the divorce fee to £550.

Dr Huq

You said in your written evidence that it will hit middle earners most because it looks at equity in the home and those sorts of things. What proposed changes would you make to the disposable capital or gross monthly income tests that are in place now?

Jo Edwards

I listened with interest to the evidence that the previous panel members gave this morning to that question. It is very difficult for me to sit here today and give a view as to what the appropriate level would be. It would need to be looked at a lot more closely. The secondary point, in any event, is lack of awareness and lack of knowledge. Without people going to lawyers as much as they were without appropriate signposting, without proper joined-upness, if I can use that phrase, even if the thresholds were increased slightly, those secondary issues would likely still remain. I keep harking back to the point about this particular fee. Everything has to be done to incentivise couples who are facing the trauma of divorce—I have been doing this work for 18 years and it is a huge trauma for any couple going through it. They should be encouraged into mediation. They should be encouraged to look at alternatives to court, but I have made the point already that they do not have an option about paying the fee, whichever way they decide to go. There are also practical difficulties, as previous members of the panel have said, because they have to pay this fee right up front. They may recover it; they may not. The higher the fee gets, the greater and more fertile the ground for debate will be between couples as to whether they are going to share the fee or whether one of them is going to pay slightly more of it than not. Again, one risks satellite litigation over that issue, with yet more costs to the court service. Whatever angle you look at this from, it makes no sense whatsoever to us to impose this increase. I am very aware, as far as this discrete point is concerned, that it is not a consultation—it is what is planned—but we are treating it as such because we, the Law Society and many other member organisations are so concerned about the impact on separating couples of this change.

Chair

Would you explain a bit about satellite litigation to the lay person?

Jo Edwards

In talking through a typical divorce process, I was speaking to a client yesterday about how we were going to frame her divorce petition. I could go off on a tangent about no-fault divorce, but that is something for a different day. It is something that Resolution members feel very strongly about. When one is looking at a draft petition, one of the boxes one ticks is what claim, if any, you are making for the costs of the divorce suit—both the court fee and any lawyers’ fees that are being incurred. When two lawyers are involved, which is increasingly not the case—I have made that point—typically there will be a conversation that will happen. One will say, “To what extent is your client prepared to contribute to the costs?” Normally, some form of accommodation can be reached. If there cannot be an agreement about that, however, potentially there needs to be a determination by a judge as to who is going to be responsible for the costs of the divorce suit itself. Of course, that is the case in defended proceedings anyway, but they are by far the minority. Around 1% of divorce cases are defended. The vast majority, at the moment, go through the undefended process, which is a purely paper exercise. I fear, and I have heard other Resolution members say that they fear, that the higher the cost of the divorce suit, the more likely it is that this is going to be a ground that people are disputing, so judicial time is going to be needed to sort out that mess of fees, which should not be necessary given the baseline of actual costs that I have described already.

Dr Huq

Would it then be appropriate to have a separate and lower fee for undefended divorces if it is a quicker process?

Jo Edwards

I am not sure that that works, because as I have said already 99% of divorces are undefended anyway. I do not think it would be appropriate for me to comment as to whether in the defended camp one should have a separate fee on top of that. The reality is that if cases are defended—I had one last year which very nearly went to a five-day hearing, albeit that was exceptional, because it was about which country the divorce should take place in—I can see that there is an argument: some people may say, “If that much court time is being taken up, that ought to be looked at.” That is not the view I take. I take the view that, given that the majority are appropriately undefended, it should be the same layer of costs for everybody and it should be maintained where it actually is.

Dr Huq

If the remission system was more generous so that there was more help with fees, would you then think that the fee increases were acceptable at all?

Jo Edwards

No. Although the primary plank of our objection is very much on behalf of the most vulnerable in society and those for whom this would be a huge financial wrench, it sends out the wrong signal. I hesitate to use the phrase “divorce tax”—I am going off at a tangent again—but I have followed quite closely the debate in Australia this year, of which you may be aware, where the figures were virtually the same. The divorce fee is 845 Australian dollars; it was hiked up to $1,200. The Senate then put it back down again. The phrase “divorce tax” was used there quite frequently. There were the same arguments—for the vulnerable in society, this is not a choice they have and so on—but the view there has very much been taken that, given that most people appropriately try to keep their divorce disputes away from the court, one should be keeping the cost of the divorce itself relatively low. If you are interested in the debate in Australia, there is so much that rings true here as well.

Victoria Prentis

That is very interesting. In your research, you talk about a study done by the MOJ in 2013, and you say it is not sufficiently robust. Is there any other real evidence available?

Jo Edwards

To my knowledge, no. Our primary position is to persuade you to form the conclusion that this increase should be pushed to one side completely. If that is not viable, our secondary position would be that there needs to be more of an evidence base for it, and there needs to be an impact assessment. I was trying to remind myself what, if any, impact assessment there had been of the previous increase from £340 to £410. I am not sure that there has been very much at all from what I can see. Last night, I was looking at the divorce figures; you will be aware, I am sure, that the most recent divorce statistics were published two weeks ago. They related to 2013. It was a surprise to me that actually there was a 2.9% decrease year on year in the number of divorces, whereas it had been static for two or three years leading up to that. Different theories have been posited, but it would be interesting to see whether there is some continued decrease around the margins as a result of continued changes to court fees. In direct answer to your question, no, I am not aware of any other research, but that is the plea we make. We do not think that there was robust enough research done when this was looked at previously. If this is being seriously mooted, there needs to be a much wider consultation and a much wider impact assessment undertaken.

Victoria Prentis

The issues you have raised—you touched on this—are about vulnerable people struggling to pay, and a possible discriminatory effect on women. Are these issues already, in your view, a problem with the fee at £410?

Jo Edwards

To a significant degree, yes. I have talked already about the impact of LASPO, as have most witnesses this morning.

Victoria Prentis

But you do not want to suggest a figure.

Jo Edwards

I do not want to suggest a figure, I am sorry. The reality is that the bigger the court fees become, the ever-less likely it is that those individuals will access any sort of legal advice. I have said already that that either means they are not pursuing their rights to see their children or money claims, or they are but they are doing so in a way that increases the amount of court time that they need. All round—I was just reminding myself of it this morning—in addition to the divorce fee, which has to be paid in every case, there is the potential of £255 in fees to pursue a money claim, if that is contested, albeit £55 if it is an agreement, and a further £215 if there are contested issues with regard to children. All told, there is the potential for costs of £880, which for the average type of person we are talking about is already a very significant sum. The reality is that they would simply not be able to access legal advice if those costs creep up ever further.

Chair

Unless there are any other questions on the divorce point, Mr Howell is going to move us on to some immigration tribunal matters.

John Howell

You have been very patiently waiting, Ms Thomas. Can you explain how the typical fee remission system works?

Carita Thomas

Yes. I understand that your question relates to the fee remission system in the immigration tribunal.

John Howell

Yes. Correct.

Carita Thomas

The fee remission system works at present in that appellants have to make their case to the tribunal about why a fee remission should be granted. It is not clear to me, as a legal representative of several years’ qualification, how that is meant to be carried out, but normally the way I do it, certainly when I am representing people, is that I put it in a letter. The only way that I understand appellants can do this is in paper form. There is no facility by the online appeals mechanism, which is available for all immigration appeals, to make an argument within that internet-based site that you wish to have fee remission. It is only through a paper process. Just to put a human face on this, I would like to give you an example of a case that I have had in the past two weeks. I have been representing a victim of trafficking, who is a refugee. She wishes to bring her son here from Nigeria through refugee family reunion. We had to make an appeal, which I am applying for exceptional legal aid funding to assist her with. She is not automatically exempt from paying a fee because there is no legal aid any more for these cases. She instructed me about her circumstances and I put forward the argument about fee remission in a covering letter that was submitted with the appeal. The tribunal then wrote to her with a letter simply demanding payment. She is virtually illiterate. She only understood the words “need to pay a fee” or “her case has been struck out.” She did not even understand that it needed to be paid by January. She paid it immediately without even speaking to me because she was so scared at the thought that she would lose the chance to bring her son here. I had already set out in my letter the arguments about fee remission. As has happened time and time again, the tribunal does not look at the correspondence that you send them initially. Obviously it is logged, because the appeal is filed, but then you have to remake the arguments every single time after the appeal is filed. As a legal representative, that is easy to do, although time-consuming, but as an unrepresented appellant—the people I am most concerned for—I would be extremely surprised if they would ever be making those arguments on their behalf. I have never met an appellant who understood that fee remission was available or, indeed, anybody who is assisting appellants who is not legally trained—for example, charitable workers, or members of a community who are British citizens who speak English and can read appeal forms—who understands that fee remission is even available. The fee remission system in the immigration tribunal is not one purely based on financial cost, as opposed to the fee remission system that operates in all other civil courts. You have to show that there are exceptional circumstances that show why you cannot pay the fee. “Exceptional circumstances” are not clearly defined; it just means exceptional circumstances, not purely that you have insufficient funds. I would argue that that is completely unfair when it comes to comparison with other venues, and particularly in immigration cases, especially now that appeal rights are so restricted. A large amount of cases that are going to be subject to these appeal fees are human rights cases, which, for the applications themselves that may lead to appeals being brought, do not have any requirement to pay a visa fee, and do not have any requirement at the application stage so that you can maintain and accommodate your dependant if they come here. There should be no assumption that these individuals are rich people. ILPA has put forward various suggestions about automatic exemptions that should operate for certain categories of people who are not currently covered by the fee scheme, and also to make it how fee remission operates clearer.

John Howell

What sort of cases attract the Lord Chancellor’s fee reduction?

Carita Thomas

The sort of cases that would attract it would be cases that are in relation to a removal notice. There is a big list—it is going to be modified in light of the changed rights to appeal—but they are cases that attract a removal notice, cases where you have an asylum claim, cases where somebody is supported by the local authority under section 70 of the Children Act and cases where someone is legally aided. Those sort of cases are automatically exempt; fee remission would apply to them because there are special boxes you can tick so the tribunal can easily process them. Cases that are going to attract the exceptional circumstances fee remission scheme are, essentially, going to be human rights cases. The asylum cases are already exempt, but it is going to be human rights cases, particularly thinking about entry clearance cases—for example, refugee family reunion.

John Howell

In your responses to previous Ministry of Justice consultations, you have argued that the remission system present in other courts and tribunals should be extended to first-tier immigration. Could you say how that would work?

Carita Thomas

ILPA does not agree with fees in the immigration tribunal at all, but if the fee remission system is extended, yes, there should be parity between all courts and tribunals. If it is to work, it should be possible to say that if you are on, for example, a means-tested benefit, you should be entitled to fee remission without having to go through an exceptional argument about why there should be fee remission. There should also be a category that recognises the low income of various sponsors who wish to bring their dependants here from overseas who do not have to meet high income thresholds. You should be looking at the income of the sponsors, as you do in other civil courts when you assess the income of individuals in those courts. It is complicated in the immigration tribunal because sponsors’ means—the ones who are trying to bring their dependants here—are not always the primary focus for assessment. In reality, many people support low-income individuals overseas; they send money overseas to support them and the individuals overseas do not have any money, so the income of the sponsor should be the one that is looked at.

John Howell

What do you make of the Ministry of Justice’s argument that a standard remission system is not appropriate because of “practical difficulties of applying income and capital tests to those who may be based outside of the UK”?

Carita Thomas

Those things can be got round, to be honest with you. I have to make such arguments when I am making an exceptional legal aid application or a normal legal aid application. It is the case that I have to evidence what income people have overseas. It is true that people overseas do not always have bank accounts. I stress again that the sort of cases that now apply with the modified appeal rights regime are human rights cases. That really has to be taken into account in the particular immigration context where people from overseas who are coming here on such human rights applications do not have to meet any income requirement anyway. A large part of the justification has been that it is complicated to assess for that reason, but the reason we need it is that there are visa fees which are paid by these individuals and a maintenance and accommodation threshold to be met, but that is not the case with human rights cases as a whole.

Chair

When the fees were first introduced, the idea was to recover 25%—just a quarter of the costs of the tribunals. Is that unreasonable to have as an objective?

Carita Thomas

I would ask that question of the Ministry of Justice. Why is it reasonable when you bring a case against the state to place the entire burden on appellants? Why should the state not be held to account for unlawful decisions? I have seen no proposal by the Ministry of Justice to try to apply the polluter pays principle in any serious way to the Home Office and entry clearance officer decisions to say, “You should be financially penalised in some serious way,” as appellants now are, “for decisions that you make which are wrong.” ILPA endorses the comments of the Civil Justice Council about the inherent importance of appeals as a social good in order to uphold the rule of law.

Chair

A social good for which the taxpayer must pick up the tab all the time.

Carita Thomas

But there is no opportunity for appellants to negotiate with the state. It is entirely different from cases where there are individuals against each other. You have no opportunity to incentivise by having fees, potentially, to encourage negotiation and mediation; there is no such facility in immigration cases. It is often the case that you might have an entry clearance appeal, for example, where you must file an appeal and pay an appeal fee in order to get the case looked at by the manager of the person who made the initial unlawful decision. Why should it be the case that, before even an internal review can take place, you have to pay a fee for that privilege? The state should be held to account for unlawful actions.

Chair

But at the end of the day, it is only covering about 9%, so it is pretty modest, isn’t it? Do you think that the increase in fees is going to make much difference to that level of recovery?

Carita Thomas

The impact on individuals who are suffering from these fee increases is so great; Jo has already outlined that we are particularly concerned about the people affected by this who have human rights cases, who have protected characteristics and who are extremely vulnerable. Again, that echoes concerns raised long ago by the Civil Justice Council when the initial fees were brought in. The Ministry of Justice appears to have taken no real account of various concerns made by the judiciary, and certainly it has made no proper evidenced case about why it is necessary to raise fees with no alternative scheme proposed for how the Government should be paying for their unlawful actions.

Chair

I see, but you are not against the principle of some recovery, or perhaps you are.

Carita Thomas

In principle, we do not agree with fees, for the reasons I have already outlined, because of who they impact, and also because we do not believe that the case has been made out. I would like to note that, in the tribunal’s own statistics, it acknowledged in June 2012, just after fees were initially brought in at the tribunal, that there had been a decline in appeal receipts, which means appeals filed, since 2008-09, and that trend has only increased. If you take into account the cumulative impact of the removal of legal aid, the removal of appeal rights and visitors’ appeals—in fact, so many appeals—you now see an extremely restricted regime, and it is too soon to bring in further changes without assessing what real financial need exists for having further fees brought in, which will impact only the most vulnerable, with no alternative for the Government.

Marie Rimmer

After the 2014 order under the Legal Aid, Sentencing and Punishment of Offenders Act 2012, legal aid is generally unavailable for immigration cases except for detention, domestic violence and trafficking. The Legal Aid, Sentencing and Punishment of Offenders Act 2012 gives us exceptional funding, which is paid from the Legal Aid Agency, as I understand it. I want to talk about the Gudanaviciene case, the immigration test case where the Lord Chancellor was found to be unlawful. You have cited that in your written evidence, saying that that case showed that the exceptional funding scheme was being applied in too restrictive a manner. What has been the result of that judgment?

Carita Thomas

The Government have, genuinely and helpfully, taken on board the concerns that were raised in Gudanaviciene, and have gone through the court process. However, I believe it is too early to say what the exact impact means in practice. Anecdotally, it seems that more cases of exceptional funding applications for legal aid are being granted. Again, the changes have been extremely recent—for example, for modifying the form and saying that people who do not have representatives do not have to use a form at all to make applications. That has been extremely recent, so it is hard to say how it is going to work in practice. I believe, from my personal experience, that there are still some issues that need to be resolved about the application, for example, of the means test by the exceptional funding team, as opposed to other areas of the Legal Aid Agency. There is not always a uniform approach. This has been a matter of difficulty for me, but I also know anecdotally that more cases are being granted, so we will have to give it some time to see how that works out.

Chair

Just going back to where we were, you talked about some of the initial impact assessments and so on, when they first introduced the fees. The argument was made that, in effect, there was over-consumption, because weak cases were being brought, and therefore putting some fees in would act, to a degree, as a deterrent against what they called “a dead-weight loss” to society. There is something in that, isn’t there?

Carita Thomas

With great respect, I would disagree. I do not think that that has been made out at all.

Chair

Okay. Would you explain why?

Carita Thomas

Again, I would refer you to the tribunal statistics, which show a continuing decline in appeals being filed in the immigration tribunal, and, as this Committee will be well aware, the Government continue to bring in measures that will restrict appeal rights, and there have been legal aid changes. Those are significant changes to the whole regime of appeals, which have meant that fewer appeals are being brought. You can see from anecdotal experience in practice that it is the case that now fewer appeals are being brought. Also from my own experience, individuals have come to me to ask about the triple whammy of now having to pay legal fees, the ancillary costs that can arise in proceedings, for example, of DNA tests, when the Government do not carry them out at first instance, as they should, and appeal fees, which can be a severe disincentive. More importantly, I know that people have been driven in desperation to seek to borrow huge amounts of money to pay those fees. I draw the Committee’s attention back to those individuals who face potential indebtedness and jeopardising their own welfare by cutting money for utility bills in order to pay fees. Those are the individuals whose cases are the most important—the human rights cases that are going to be affected by the appeal regime. Again, I would ask you, please, to consider the individuals in the small amount of appeal cases that remain, who are the ones most affected.

Chair

But is there anything wrong with the principle of having some mechanism—whether it is the right one or not is arguable—for weeding out weak cases, essentially?

Carita Thomas

Again, with great respect, we do not agree that there should be fees payable in the immigration context.

Chair

You can take a punt whatever the strength of your case because you have nothing to lose. That is the argument, isn’t it? How do you deal with the argument that if you have no fees, you simply take a punt because you have nothing to lose?

Carita Thomas

The state should be held to account for its actions. There is no way to negotiate. These are matters of fundamental importance, and the judiciary has emphasised the importance of having access to justice and equality of arms for those who wish to pursue a human rights claim. With great respect, we would argue that those individuals should be allowed to bring their appeals. I repeat that the Government have not made their case about why there is, indeed, such a need only to penalise appellants and not the state through the mechanism of fees.

Chair

Are there any further comments or questions from any of my colleagues to either of the witnesses?

Jo Edwards

May I just come back on one point? It is the question of exceptional case funding. In the context of family cases, in response to Marie’s point, when Carita spoke about immigration and her experience of exceptional case funding, she could equally have been talking about family cases. The experience of Resolution members is that it has been extremely bleak trying to secure exceptional case funding. It was promised as the safety value post-LASPO, but it has not proven to be that. Yes, since the relaxation of the rules, since the case you cited, our members are reporting some change. It is too early to say what the impact is, but that is certainly not the answer in family cases. It is not providing the sort of support that we hoped it would do.

Chair

That is very helpful. Thank you very much for that. Unless anything else arises, that is the end of the evidence session. Thank you very much for your time and for your evidence. That is the end of the public hearing. Oral evidence: Courts and tribunals fees and charges, HC 396 21