Consultation on Scottish Court Fees

Section 1: Background and proposals

Introduction

The purpose of this consultation is to seek views on various options which will ensure that the fees raised in our civil courts cover the cost of the civil business undertaken in those courts.

The Scottish Government is committed to ensuring that the courts are funded to deliver a civil justice system that is accessible, affordable and which provides a high-quality service to those who have cause to use it.

Beyond this overriding objective the Scottish Government believes that the fees charged to court users should recover the cost to public funds of providing those services. This means that those who make use of the services of the courts should meet, or contribute towards, the associated cost to the public purse where they can afford so to do.

The responsibility for setting court fees is a matter that is reserved to the Scottish Ministers and is put into effect by an Order laid in Parliament. Those Orders establish statutory fee-charging regimes, which the Scottish Courts and Tribunals Service ( SCTS) administer.

The policy of successive governments has been to move progressively towards a position of full-cost recovery whereby 100% of the costs of the civil justice system are met by fees. However, other than regular adjustments for inflation and the addition of the occasional new fee, it continues to be the case that fees have only partially met the costs of the system.

Each year the total costs attributable to civil business in the sheriff court, Court of Session and Office of the Public Guardian are set out in the SCTS Annual Report and Accounts along with the income derived from fees. The following table shows the overall figures for the last 5 years and the recovery rate achieved:

Table 1: Recovery rate 2010-11 to 2014-15

	Income (£m)			Costs (£m)			Deficit
Year	Fee income (net)	Fee exemptions	Total fees	Total costs allocated	Planned subsidy	Net costs	Deficit/ surplus (£m)	Recovery rate
2010-11	22.8	2.3	25.1	41.7	6.5	35.2	-10.1	71%
2011-12	22.1	2.0	24.0	41.2	7.4	33.8	-9.8	71%
2012-13	21.9	2.2	24.1	38.8	6.5	32.2	-8.2	75%
2013-14	24.2	2.4	26.6	39.5	6.2	33.3	-6.7	80%
2014-15	24.7	2.3	27.0	38.4	6.1	32.3	-5.4	83%

Scottish Budget 2016-17

Decisions regarding court fees are taken in the wider context of the Scottish Budget and the continued challenges posed by pressure on public finances. The Deputy First Minister noted in the introduction to Scotland's Spending Plans and Draft Budget 2016-17 ^[1] :

"The setting of this budget has, however, taken place against the backdrop of the toughest public expenditure conditions we have yet faced. Conditions imposed by the UK Government out of choice, not necessity.

"The UK Spending Review published last month made clear that public expenditure in Scotland will face year-on-year real term reductions until the end of this decade. This means Scotland's budget will continue to fall and by 2020 it will be 12.5 per cent lower in real terms than when the Conservatives came to power in 2010. This is the equivalent of one pound in every eight we spend being cut by Westminster by 2020.

"This imposes acute challenges on day-to-day spending."

Against this backdrop, the Budget reduced the operating budget for the SCTS from £79.9m to £76.5m. The vast majority of the income generated by SCTS comes from court fees.

It is therefore proposed that, in order to reduce the impact of budgetary constraint, court fees should rise in line with the stated policy of full cost recovery. Given that this is the policy of the current and previous governments, an increase in court fees is seen as the best course of action rather than reducing the budgets in other Justice areas to offset this reduction in SCTS's budget.

Court fees review

Court fees have generally been reviewed every three years, with the last round being implemented in 2015. However, the Scottish Government has decided to accelerate the move towards full cost recovery to ensure that the courts are properly funded and able to continue to provide access to justice whilst, at the same time, contributing to the ongoing development of a more efficient, modernised court service. The wider context of pressure on public finances, brought about by significant reductions to the funding Scotland receives from the UK Government, means that the Scottish Government now considers that the time is right to take the last step towards full-cost recovery.

A review is justified both by the need to end the cost to the public purse of subsidising the civil justice system, and by the introduction of the new simple procedure which replaces the current small claims and summary cause procedures. Simple procedure is to be introduced from 28 November 2016 and it is the intention of the Scottish Government to bring in new tables of fees with effect from that date.

2015 Court fees review

Fees were last reviewed in 2015. Broadly the proposal was for fees to increase by 2% to account for inflation for each year 2015/16 to 2017/18. In addition an extra 2% increase was proposed from 2015/16 to assist with the costs of modernising the IT systems that underpin the justice system. Beyond this baseline some further minor amendments were made in order to simplify and improve consistency within the fee system.

The next review was scheduled to be undertaken in 2017-18. However, due to the reasons outlined above, the Scottish Government considers that fees should be reviewed now rather than waiting until 2018.

2018 Fee Review

Irrespective of the result of this consultation, it is still the intention for a fuller fees review to be undertaken in 2017-18. This is seen as an opportune time to re-evaluate how fees are calculated and charged owing to the reforms that will have been implemented as a result of the Courts Reform (Scotland) Act 2014 and the introduction of a new IT system in the SCTS.

The Scottish Government does see scope for further improvements in the fee charging structure. For example, increased automation flowing from a new civil case management system and consequential digitisation of fee transactions and fee exemption transactions will result in increased transparency. This improved understanding, deriving from availability of robust information, may allow further changes to improve fairness and public confidence in the fee charging system.

Opportunities to be further explored would be to offer discounts for on-line submission of court documents and a simpler structure of single 'front-loaded' fees to replace a complex system of staged, small fees being triggered throughout a case.

Simple procedure

Background

The Courts Reform (Scotland) Act 2014 introduces a new 'simple procedure' to replace the existing small claims and summary cause procedures. It was thought that there was no longer justification for continuing two separate procedures for cases under £5,000 (summary cause) and small claims (applicable to actions up to £3,000).

Simple procedure is designed to be a speedy, inexpensive and informal civil court procedure for helping people sort out disagreements about matters of lower monetary value. The Court of Session has made the Act of Sederunt (Simple Procedure) 2016 which contains the Simple Procedure Rules drafted in a modern and accessible style.

It is intended that simple procedure should be implemented in two phases. The first phase is due to come into force on 28 November and will comprise (principally):

• proceedings for the payment of a sum of money (but not proceedings for aliment or personal injury); and
• proceedings for the recovery of moveable (but not heritable) property.

A second phase, scheduled for 2017, will deal with

• housing cases;
• personal injury cases; and
• a number of more minor procedures that are less commonly used.

Simple procedure fees

The implementation of simple procedure will require the replacement of the existing court fee arrangements for small claims and summary cause actions by a new unified structure. It is proposed that the existing fee levels for summary cause and small claims actions will be retained within the new simple procedure structure. The level of fees paid for particular actions would therefore remain unaltered. For example, proposed fees to lodge a claim up to £200 under simple procedure will be £18 and to lodge a claim up to £5,000 will be £78. If, as a result of this consultation, these fees change, the new fee for a simple procedure case will be the same as it would have been if a case had been raised under the small claim or summary cause procedures.

We believe that maintaining the existing fee levels in the new structure will assist the introduction of simple procedure, particularly in light of the phased implementation, by providing a degree of continuity as the new system beds in.

Exemptions

Whilst the Scottish Government believes that the costs of the civil courts should be borne by court users rather than by the taxpayer, we are committed to ensuring that there is protection for those who are unable to pay court fees. This protection is provided for by a generous and extensive range of exemptions that are offered to those on lower incomes. The exemptions regime ensures that civil court users with limited means are not being denied access to justice.

The majority of those who qualify for exemption do so because they qualify for legal aid. The full range of exemptions is listed below.

You may be entitled to exemption from paying court fees in the following circumstances:

You or your spouse/civil partner are in receipt of:

• income support;
• income-based employment and support allowance;
• pension credit guarantee credit;
• working tax credit, including child tax credit and gross annual income used for calculation of tax credit is £16,642 or less;
• working tax credit, including a disability element and gross annual income used for calculation of tax credit is £16,642 or less; or
• working tax credit, including a severe disability element and gross annual income used for calculation of tax credit is £16,642 or less.

You are in receipt of:

• income-based jobseeker's allowance; or
• Universal Credit (from 29 April 2013)

You may also be entitled to exemption from paying court fees if:

• you are receiving civil legal aid in respect of the matter for which the fee is payable (Section 13(2) of the Legal Aid (Scotland) Act 1986 refers);
• the fee is payable in connection with a simplified divorce or dissolution of civil partnership application and you are receiving advice and assistance from a solicitor in respect of that application (Legal Aid (Scotland) Act 1986 refers); or
• the fee is payable in connection with work being undertaken by your solicitor which qualifies for civil legal aid as matter of 'special urgency' (Section 36 of the Legal Aid (Scotland) Act 1986 refers).

The Scottish Government is not making any changes to exemptions as part of this review. However, consideration will be given as to whether the £16,642 figure noted above is still appropriate.

We also note the rolling out of the new system of Universal Credit and the powers over welfare which are being devolved to the Scottish Government. In time these developments may mean that further consideration of fee exemptions is required to ensure that they remain appropriately designed and fit-for-purpose.