Courts and Tribunals Fees

Dominic Raab Excerpts

Monday 4th July 2016 Commons Chamber

[The Parliamentary Under-Secretary of State for Justice (Mr Dominic Raab)]

I congratulate the shadow Justice Secretary, the hon. Member for Leeds East (Richard Burgon), on his new position and welcome him to the Opposition Front Bench. I pay tribute to the work of the hon. Member for Hammersmith (Andy Slaughter), who held our feet to the fire assiduously over many weeks and who I am sure will continue to do so from the Back Benches.

I also thank my hon. Friend the Member for Bromley and Chislehurst (Robert Neill) for his Committee’s important report and work on court and tribunal fees and charges, and hon. Members from across the House for their invaluable contributions to this debate. The Government will respond to the Committee’s report in due course, but I welcome this opportunity to address some of the issues it raised. I will try to respond to as many as is practical in the time allocated.

As hon. Members will appreciate, the principal reason for raising fees is financial—there is no getting away from that. The shadow Justice Secretary said that he would get rid of all the fees. He was a little thin on how he would pay for them, but perhaps that does not matter too much to the Labour party. The raw truth is that the Ministry of Justice is not a protected Department. We have a very challenging financial settlement, so we must reduce its annual spending by 15% in real terms, which means about £1 billion in cash terms by 2019-20.

It is worth remembering that this is not just about cuts; we are also committed to this approach precisely so that we can invest £1.3 billion to modernise our prisons, and more than £700 million to transform our court system. Achieving those dual financial objectives inevitably requires difficult decisions. There is no ducking them. We have to look at every area of the Department’s finances, and I am afraid that there can be no exceptions for the courts.

To ensure that the courts and tribunals are properly funded, and access to justice is properly protected, increases to court fees will be necessary. The cost of our courts and tribunal system to the taxpayer is unsustainably high, and it is only right that those who use the system pay more to balance that burden with the taxpayer.

[Robert Neill]

In coming to that conclusion, has the Department carried out research into or a survey on the costs to the court system of delays caused by persons appearing unrepresented as litigants? Should not that also be taken into account as part of the equation? What data does the Minister have?

[Mr Raab]

My hon. Friend raises a perfectly legitimate point. If he is willing to be patient, I will write to him with any precise details that I have.

In its report, the Committee accepts the principle of charging court users a contribution towards the cost of operating our courts. Whatever the specifics, I think that that principle is accepted. It is a question of balance between taxpayer subsidisation and user pay. I welcome the Committee’s finding in that regard.

Under the Treasury’s “Managing public money” rules, fees for public services should usually be set at a level designed to meet the cost of those services. However, Parliament has granted, through the Anti-social Behaviour, Crime and Policing Act 2014, a power that allows the Government to set court and tribunal fees at a level above the cost of the service. The income from those fees must be used to fund an efficient and effective system of courts and tribunals. When setting these fees, the Lord Chancellor must have regard to a number of factors, including the need to preserve access to justice. I assure hon. Members that we take that requirement seriously. The idea that somehow a profit is being made is not accurate according to the law, let alone the practice.

I will now turn to the specifics of employment tribunals. I appreciate the concerns expressed both by the Committee and by hon. Members across the aisles. Those who have spoken today have mentioned in particular the impact of fees on employment tribunals. When fees were introduced, there were three main objectives. The first was to transfer a proportion of the cost of the tribunal from the taxpayer to those who use it, where they can afford to pay. The second was to encourage people to consider other ways of resolving disputes, in particular the ACAS conciliation services, which are provided free of charge. There has been virtually no mention of them in this debate. The third objective was to protect access to justice. I do not think that anyone could disagree that those are legitimate aims to pursue.

The main concern about employment tribunal fees has been the large fall in the number of claims immediately after fees were introduced, but it is not that surprising that the volume of claims has fallen. It is obvious that more people will use a service if it is free than if they have to pay to use it. It is also worth reminding hon. Members across the House of a few key facts. First, help is available for those who cannot afford to pay, through fee remissions. Under that scheme, someone who is eligible for help may have the fee waived either in part or in full. We have taken steps to make sure that more people are aware of the help available, and that has led to a marked increase in take-up under the scheme.

Secondly, and crucially, the introduction of the ACAS early mandatory conciliation service has been a success, with more than 83,000 people referring their disputes to ACAS in the first year. As many people are using the ACAS conciliation service now as were previously referring their disputes to the ACAS voluntary service and the employment tribunals combined. That is important, regardless of whether the dispute ends up with a meritorious claim succeeding; it is valuable that potentially divisive disputes can be settled in that way.

[Mr Hanson]

When will the Minister publish the impact assessment that the Committee has asked for?

[Mr Raab]

I will come on to that, if the right hon. Gentleman will bear with me for a few moments, because there are a lot of other points to get through. The point—this has been missed almost entirely in the debate—is that we are seeing the right kind of behavioural change.

Thirdly, the tribunal has the power to order the respondent to reimburse the claimant with his or her fee, if the claim is successful. Finally, on top of that, the Lord Chancellor has an additional power to remit fees where there are exceptional circumstances.

I appreciate that the Committee and hon. Members have not been shy in criticising the delay in completing the review. It is true that when we announced the review in June last year, we had hoped to finalise it by the end of the year. That simply was not possible and it is clearly important that we take time to carefully consider all the relevant material. It is regrettable that it has taken longer than planned, and I am sorry about that. I have looked into the situation and we will get the response published as soon as possible.

In our evidence to the Committee, however, we made it clear that, while we hoped that the review would be completed swiftly, we could not give a firm commitment on timing. I reassure hon. Members and the Chair of the Committee that the review is very close to completion, so I hope to be able to make an announcement in the near future.

[Robert Neill]

If the Minister will forgive me for saying so, his predecessor told us in February that he hoped we would have it “sooner rather than later.” What has caused the delay? Has the material been fully assembled in his Department, and why can it not be published?

[Mr Raab]

I thank the Select Committee Chairman, who is being as tenacious and assiduous as ever. We are in a position to make the announcement in the near future. I do not think it is right to split the evidence and our response to it. Hon. Members in this House and the public expect us, when we produce the evidence, to be able to say what we think about it. If he is patient with us, he will get both in reasonably short order. On top of the apology that I have already given, I want to make it clear that it will be coming as soon as is practicable.

[Marie Rimmer]

Will the Minister give way?

[Mr Raab]

I am going to make a bit more progress. I have been given some time, and I have given way to hon. Members from across the House. If towards the end I have got time, I would be happy to take the hon. Lady’s intervention.

I turn to divorce fees, about which hon. Members have made some important points. The Justice Committee criticised the recent increase in the fee for divorce to £550, primarily because of the risk to vulnerable women. The Government have sought to make sure that vulnerable women are protected within the divorce fees scheme. Although it is true—this point has been made—that more women than men petition for divorce, it is also true, although it was rather neglected in this debate, that women are more likely to qualify for a fee remission. In the circumstances of a divorce or any other matter where the parties have conflicting interests in proceedings, the applicant is assessed on his or her own means, rather than on those of the household. For victims of domestic violence, the first priority is to ensure the victim’s safety. There is no court fee for an application for a non-molestation order or any applications in relation to one.

I turn to money claims. There has been criticism of the introduction of enhanced fees for money claims in March 2015, and some criticism of the quality of the research that supported those increases. We have said all along that we took the decisions that we did based on the best evidence available at the time. As things have turned out, the impact of those fee increases on the volume of claims has been greater than we thought. It is easy to be wise in hindsight, and we are investigating the reasons, but in the meantime we have decided not to implement the further increases we proposed. But given the very challenging financial circumstances, we have been clear—I want to be honest with the Chair of the Select Committee and hon. Members—that we may need to come back to those and look at them again when we have got a better understanding of the specific impacts.

There have been criticisms of our proposals to raise the fee in immigration tribunals to full cost levels. We estimate that those proposals would generate about £35 million a year in additional income. The normal policy over many years has been to charge fees at full cost unless there are good reasons not to. I do not see, given the remissions and the other flexibility, why the taxpayer should foot the bill in this case. We are currently considering in detail the responses to the consultation. Under our proposals, certain types of appeal would continue to be exempt from fees; we are talking about vulnerable people who need such flexibility the most. People receiving means-tested benefits, such as asylum support, would continue to have fees waived. We sought views on further exemptions, and specifically on whether we should exempt people in receipt of a Home Office destitution waiver. We are making sure that, notwithstanding the difficulty of the decisions, the most vulnerable are protected.

Meeting the challenges ahead cannot just be about increasing fees. That is why we recognise the need to invest in the courts and tribunals so that they are lean, efficient and fit to serve a modern, digital society. In the spending review, we announced that we would be investing, as I have said, more than £700 million to transform our courts and tribunals system. The scale of that investment and the ambition of our reform plans will enable us to build a justice system that is simpler, swifter and more efficient, because it takes better advantage of modern technology.

Other points and criticisms have been made. We take them on board, and we will respond to them fully in due course. We also need to have a sense of realism. Given the financial situation that we are still grappling with, fees are a critical part of the Ministry of Justice’s plans to meet our spending review challenges.

[Dr Huq]

Could the Minister tell us the cost of administering the employment tribunal fees? There is a mismatch between what they raise and what they cost.

[Mr Raab]

My understanding, off the top of my head, is that it was £71 million. I will come back to the hon. Lady if I find out that that is incorrect.

The truth is that we cannot afford to duck these decisions around fees if we want to secure the long-term funding of the courts and the tribunals and deliver on the mandate on which the Government were elected. It is all very well for the Opposition to say that they want to scrap every fee that has been imposed or duck every difficult decision, but unless they can explain to the House how that will be paid for or the impact that it will have on our economy, it is not the responsible thing to do.

[Hannah Bardell]

Will the Minister give way?

--- Later in debate ---

[Mr Raab]

I am going to finish, because of the second debate. Fee increases are never popular, but at every stage we have made it clear that we intend to protect the most vulnerable and make sure that those who cannot pay do not have to do so. We continue to consider carefully all the detailed points and recommendations made by the Select Committee, and we will publish our response later this year.