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Increase in legal hearings delivers windfall
By Michael Peel, Legal Correspondent
Published: July 10 2007 03:00 | Last updated: July 10 2007 03:00
The rise in bank charge cases has helped deliver a windfall for the civil courts following the decision to increase fees for litigants last year.
The civil courts' unprecedented "over-recovery" of £34m in 2005-6 is expected to climb still further in 2006-7, prompting allegations that charges are set too high and are unfair to poor claimants.
Critics say the increases in various standard fees for making applications and filing documents mean that small-time litigants have ended up subsidising long-running High Court cases brought by companies and rich individuals.
A government consultation that ended last month acknowledged the system caused "particular unfairness" to people in financial difficulties, who often ended up having to pay fees in cases brought by their creditors over relatively small debts.
"These fees . . . effectively cross-subsidise the court costs of the corporations and other wealthy parties involved in major contested litigation," the consultation said.
Official figures show the civil courts - which included the county courts, where small claims are heard - enjoyed a surplus of £34m last year on turnover of £336m. In January last year, the court service increased by as much as a quarter the fees for about two dozen civil court services costing between £10 and £120.
Lord Davidson, the advocate-general for Scotland, told parliament in May that the civil court surplus for 2006-7 was likely to be "rather larger" than the previous year's £34m, although he denied the fee increase was the main reason for the windfall. The government denies court fees are a big deterrent to small litigants.
Analysing the causes of the ballooning profit is difficult, because there is scant official or unofficial data available on the cases that are contributing to it.
The Court Service says significant fees are generated from cases in which credit card companies and utility companies sue a defendant for unpaid debts of £500 or less. Some costs are paid by the companies in the first instance, but devolve to the defendants if they lose.
One of the harshest critics of the status quo has been Lord Lester, the Liberal Democrat peer appointed last month as an adviser to the Ministry of Justice. In the May Lords debate on court fees, he attacked the government's "regressive policy" and quoted the Irish judge Sir James Mathew: "In England, justice is open to all - like the Ritz hotel."
Copyright The Financial Times Limited 2007
By Michael Peel, Legal Correspondent
Published: July 10 2007 03:00 | Last updated: July 10 2007 03:00
The rise in bank charge cases has helped deliver a windfall for the civil courts following the decision to increase fees for litigants last year.
The civil courts' unprecedented "over-recovery" of £34m in 2005-6 is expected to climb still further in 2006-7, prompting allegations that charges are set too high and are unfair to poor claimants.
Critics say the increases in various standard fees for making applications and filing documents mean that small-time litigants have ended up subsidising long-running High Court cases brought by companies and rich individuals.
A government consultation that ended last month acknowledged the system caused "particular unfairness" to people in financial difficulties, who often ended up having to pay fees in cases brought by their creditors over relatively small debts.
"These fees . . . effectively cross-subsidise the court costs of the corporations and other wealthy parties involved in major contested litigation," the consultation said.
Official figures show the civil courts - which included the county courts, where small claims are heard - enjoyed a surplus of £34m last year on turnover of £336m. In January last year, the court service increased by as much as a quarter the fees for about two dozen civil court services costing between £10 and £120.
Lord Davidson, the advocate-general for Scotland, told parliament in May that the civil court surplus for 2006-7 was likely to be "rather larger" than the previous year's £34m, although he denied the fee increase was the main reason for the windfall. The government denies court fees are a big deterrent to small litigants.
Analysing the causes of the ballooning profit is difficult, because there is scant official or unofficial data available on the cases that are contributing to it.
The Court Service says significant fees are generated from cases in which credit card companies and utility companies sue a defendant for unpaid debts of £500 or less. Some costs are paid by the companies in the first instance, but devolve to the defendants if they lose.
One of the harshest critics of the status quo has been Lord Lester, the Liberal Democrat peer appointed last month as an adviser to the Ministry of Justice. In the May Lords debate on court fees, he attacked the government's "regressive policy" and quoted the Irish judge Sir James Mathew: "In England, justice is open to all - like the Ritz hotel."
Copyright The Financial Times Limited 2007
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