Scottish court fees 2018-2021: consultation

Section 1: Background and proposals

Introduction

1. The purpose of this consultation is to seek views on revisions to Court Fees that will ensure that the fees raised in our courts (Court of Session, High Court of Justiciary, Sheriff Appeal Court, Sheriff Courts including Sheriff Personal Injury Court, Justice of the Peace Courts and Office of the Public Guardian) continues to cover the cost of the business undertaken in those courts.

2. The Scottish Government is committed to ensuring that the courts are funded to deliver a justice system that is affordable and which provides a high-quality service to those who have cause to use it. It is also committed to ensuring that access to justice is protected through a well-funded system of exemptions and legal aid.

3. Despite significant financial pressures the legal aid system in Scotland maintains a wide scope of access to legal aid for both criminal and civil cases. Legal aid in Scotland is a demand led system and all those who are entitled will receive it.

4. The Civil Litigation (Expenses and Group Proceedings) (Scotland) Bill currently before the Scottish Parliament will increase access to justice by making the costs of civil action more predictable and by increasing the funding options for pursuers of civil actions through greater availability of “no win, no fee” success fee agreements.

5. It will also protect pursuers from the risk of having to pay their opponent's costs in personal injury cases if the case is lost, provided they have acted properly. In both cases, the proposals will mean that the pursuer in personal injury actions will not in practice be liable to pay court fees even if they lose.

6. Beyond this overriding objective the Scottish Government believes 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, thus reducing the burden upon the taxpayer.

7. The responsibility for setting court fees is a matter that lies with the Scottish Ministers and is put into effect by statutory instruments laid before the Scottish Parliament. Those instruments establish statutory fee-charging regimes, which the Scottish Courts and Tribunals Service ( SCTS) administer, therefore the Scottish Government works closely with the SCTS on its fees policy. The current statutory instruments are as follows:

a. The Court of Session etc. Fees Order 2015

b. The High Court of Justiciary Fees Order 2015

c. The Sheriff Appeal Court Fees Order 2015

d. The Sheriff Court Fees Order 2015

e. The Justice of the Peace Court Fees (Scotland) Order 2015

f. The Adults with Incapacity (Public Guardian’s Fees) (Scotland) Regulations 2015

8. In each of these instruments, schedule 3 currently applies. Except in the case of the Public Guardian’s fees, schedule 3 was substituted by the 2016 Amendment Order referred to below.

9. The instruments can be found on the website of the Scottish Courts and Tribunals Service. https://www.scotcourts.gov.uk/taking-action/court-fees

Court fees review

10. Court fees have generally been reviewed every three years, with the last full round being implemented in 2015. The wider context of pressure on public finances, brought about by significant reductions to the funding Scotland receives from the UK Government, meant that in 2016 the Scottish Government concluded that it was necessary to move further towards full-cost recovery in the courts, which has been the policy of the current and previous governments for some time. As a result an ad-hoc Fees Order (the Court Fees (Miscellaneous Amendments) (Scotland) Order 2016) was laid before the Parliament and came into force on 28 November 2016. This order raised the level of fees significantly, although certain fees, such as those in the Sheriff Personal Injury Court, were frozen in order to protect access to justice. The overall effect was intended to bring the level of fees to the point at which they cover the costs of the civil justice system.

11. However inflationary pressures in the wider economy mean that the three yearly review is still required in order to set fees for the three year period commencing on 1 April 2018 (by which point it will be 17 months since the last fees increase).

12. It is not intended that court fees should move beyond cost-recovery to a point where a profit is made (that could be used to subsidise other parts of the justice system). It is intended that the current review should do no more than take account of inflationary pressures and address some inconsistencies and anomalies that exist in the current fess structure.

13. Each year the total costs attributable to civil business in the sheriff courts, 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 7 years available and the recovery rate achieved:

Table 1: Recovery rate 2010-11 to 2016-17

	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%
2015-16	26.7	2.5	29.2	42.6	6.8	35.8	-6.6	82%
2016-17	28.9	2.6	31.5	43.1	6.9	36.2	-4.7	87%

14. The Scottish Government believes that further reforms to the fee charging system will be desirable as a result of the modernisation arising from measures within the Courts Reform (Scotland) Act 2014 and the introduction of the new Integrated Case Management System ( ICMS) in the SCTS. It is clear however that further time is required to allow the most recent changes, such as the introduction of the new Simple Procedure (replacing small claims and summary cause) to bed in, and for more a complete picture to be produced by the new ICMS system as only eleven months data is currently available. It will therefore be for future fees instruments to consider whether wider changes to the system may be desirable.

15. Opportunities to be further explored in future would include a simpler structure of single ‘front-loaded’ fees to replace a complex system of staged, small fees being triggered throughout a case. In addition it is clear that the fee charging system will need to take account of other changes such as the new group procedure (a proposed class action procedure) that is currently being considered by the Parliament as part of the Civil Litigation (Expenses and Group Proceedings) (Scotland) Bill.

16. A further possibility would be to consider a system where, in the appellate courts only, the fees for substantive appeal hearings would be charged on the basis that the fee is payable at the time that the hearing is applied for. The fee would not be refundable if the hearing does not then take place. Such a system might discourage unmeritorious appeals from progressing as far through the system and reduce the waste of large numbers of hearing being scheduled that do not take place.

17. Whilst more substantial reform is a possibility for the future, this review needs to address some anomalies and to learn from the experience of the first couple of years of some of the court reforms that have already taken place, such as the introduction of the new Sheriff Appeal Court. These are discussed further below.

18. The current fees review is also informed by the recent UK Supreme Court Judgement in Unison v Lord Chancellor [2017] UKSC 51 regarding fees charged for access to the Employment Tribunals. The judgment concluded that the particular fees charged in that tribunal were an unlawful barrier to access to justice but held that fees were in principle a permissible method of funding and operating the system of courts and tribunals. It stated:

‘Fees paid by litigants can, in principle, reasonably be considered to be a justifiable way of making resources available for the justice system and so securing access to justice. Measures that deter the bringing of frivolous and vexatious cases can also increase the efficiency of the justice system and overall access to justice.’

19. The Scottish Government is carefully considering the judgment and believes that maintaining access to justice must be a paramount consideration in developing and revising fee charging regimes such as the system for court fees.

20. Further, the Scottish Government considers it vital that the extensive system of exemptions is maintained and special consideration is given to the parts of the court system that might give rise to particular concerns about access to justice for vulnerable people.

21. For persons ineligible for exemption, a successful party in court litigation will be entitled to recover their outlays including all court fees paid from the outset – in other words if they win their case they will be entitled to have court fees paid back to them. In some cases a pursuer (claimant) will not have to pay court fees direct, even if they lose their case, because their law firm, a funding company or a trade union is in a financial position to pay court fees for them. As mentioned, the Scottish Government proposes to build on these protections in personal injury actions in the Civil Litigation (Expenses and Group Proceedings) (Scotland) Bill in that a pursuer entering into a success fee agreement (broadly, a “no win no fee” agreement) will not have to themselves pay court fees; and in the event they lose their case they will have the benefit of qualified one way cost shifting ( QOCS) which means they will not have to pay the defender’s court fees.

Exemptions

22. 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, extensive and easy to access range of exemptions that are offered to those on lower incomes. The exemptions regime ensures that court users with limited means are not being denied access to justice.

23. In practice, in the majority of those who qualify for exemption do so because they qualify for legal aid. The current 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

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).

24. We are aware of the continuing roll-out of the new system of Universal Credit and the powers over welfare which are being devolved to the Scottish Government. In order to ensure that the fee exemptions remain appropriately designed and fit-for-purpose we will consider if some amendment of the system is required in order to take account of the roll-out of Universal Credit. Any amendments will ensure that the exemptions system is maintained so that access to justice is protected.

25. The Scottish Government would welcome views on the system of exemptions.