Scottish court fees 2022 to 2025: consultation analysis and Scottish Government response

Scottish Government Response

Summary

38. The Scottish Government welcomes the responses to the consultation. Having carefully considered the variety of views expressed the Government has determined to press ahead with the principal changes outlined in the consultation. That is, the overwhelming majority of fees will increase but only by 2% per year which is well below the current inflation rate and below the predicted levels of inflation predicted by the Office of Budget Responsibility (OBR).

39. We have therefore made amendment to our original proposals that seek to address the concerns that exist about whether access to justice has been adequately protected. To that end, we have raised the level of income that can be earned whilst still qualifying for court fee exemption via the benefit related exemptions to £20,592 – in line with the Scottish Living wage.

40. The Scottish Government has also been mindful of Petition 1784 to the Scottish Parliament. The petitioner was concerned that PIP is not one of the qualifying benefits for exemption from court fees in Scotland. We note that there was also support for exemption for those in receipt of PIP from three of the respondents. We have, therefore, extended the system of exemptions to encompass those who are in receipt of PIP whose the gross annual income taken into account for the calculation of the working tax credit is £20,592.

41. The Scottish Government notes that there was overwhelming support from those responding to question 2 which proposed making Aarhus cases in the Court of Session exempt from court fees. We intend to bring statutory instruments before the Scottish Parliament to implement this policy.

42. The Scottish Government notes that respondents proposed that the following should be exempt from fees.

• Aarhus cases in the sheriff court.
• Discrimination claims under the Equality Act 2010.
• All human rights cases which they considered are always in the public interest.
• Court actions and public interest interventions brought by the Equality and Human Rights Commission, the Scottish Human Rights Commission, and the Children and Young People’s Commissioner Scotland.
• In the future, court actions provided for by the United Nations Convention on the Rights of the Child (Incorporation) (Scotland) Bill (under section 7 of the Bill as passed by the Scottish Parliament – ‘Proceedings for unlawful acts’) and court actions provided for in the future Bill introducing a new human rights framework for Scotland.

After careful consideration, we have decided not to proceed with these at present, but will give them further consideration in the future.

43. The details of the proposals and further explanation of the Scottish Government’s position is provided below.

Charging in Civil Courts

44. Many respondents queried the basis for charging court fees, feeling that the courts should provide a fully funded public service, supported by the taxpayer and free to the user. These respondents generally referenced the UNISON judgment in the Supreme Court regarding fees in the Employment Tribunal as supporting of the proposition that increased court fees imperilled access to justice.

45. The Scottish Government does not propose to abolish court fees such that the costs of funding the courts would fall entirely on the taxpayer, especially at a time of rising taxes.

46. There are a number of policy arguments both for and against charging fees in the civil courts and any government does need to take a balanced policy approach. Good policy reasons not to charge can and do arise where public services deliver a ‘public good’. Clearly, these types of benefit to wider society do arise with the courts.

47. The civil courts exist for people to protect and enforce their personal rights, so it can be argued, as many respondents did, that it is inappropriate to charge for the privilege of exercising those rights. The resolution of some individual cases can also potentially contribute to the clarification of the civil law and the building of case law precedent.

48. The Scottish Government accepts that society will benefit from both those outcomes but we do not believe that they alone provide a sufficient justification for the government to completely rule out charging.

49. In addition to any ‘public good, both the pursuer and the defender in each individual case will derive a ‘private good’ from settling their dispute and the government is resolved that some form of financial contribution from end users can be justified given that a private benefit is derived. The public purse is not unlimited and taxpayers do expect their governments to make choices on their behalf between all of the competing demands on the public purse.

50. When making those choices in Scotland, the Scottish Government contributes significantly to the administration of justice through taxpayer contribution but as there is a need to limit the demands on the public purse we will continue to look to the users of the civil courts to help fund those particular public services i.e. an affordable ‘user pays’ model, with appropriate exemptions and legal aid available to those eligible, is considered appropriate for the civil courts Scotland.

51. The policy decisions taken by the Scottish Government, through the statutory fee charging regime, do result in a balanced approach. The end user is only asked to make a reasonable contribution towards the cost of running the civil courts (where they can afford so to do). The taxpayer will fund the remainder through:

• some costs being met through the fee exemptions regime (where the end user does not have the means to pay fees themselves); and
• some costs being treated as a subsidy in order to maintain affordability for the end user i.e., the costs that if charged might have created unreasonable barriers in access to justice.

On top of the fee exemptions regime there is a generous system of civil legal aid, that ensures that litigants who need help not only do not have to pay fees, but also receive assistance with paying for legal advice, assistance and representation.

52. The Scottish Government is aware that there will be litigants whose income is just above the thresholds for qualification for legal aid or exemption from court fees. This will always be the case at whatever level the thresholds are set. Careful consideration has been given to these thresholds and they are believed to be fair.

53. The Scottish Government has also taken note of the wider context. Whilst recognising that not all meritorious cases succeed, many litigants bringing forward strong cases will have their court fees paid by the opposing party following success. Other litigants will not face paying a fee as their claims are supported by no-win, no-fee specialists. For most litigants the court fee is only a small portion of the cost of litigation and the cost of legal advice is a far greater consideration. These considerations, taken alongside the exemptions regime, mean that is hard to discern many situations where the court fee is a serious deterrent to proceeding with legal action.

The Supreme Court judgement

54. The Supreme Court judgement in UNISON v the Lord Chancellorper se did not challenge the legitimacy of charging fees . The Court specifically commented, ‘‘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.” The test is, in essence, do the fees effectively prevent access to justice. The Scottish Government has seen no compelling evidence that is does.

55. As with all judgments the Supreme Court judgment applies directly to the particular facts and circumstances of that case. However, those circumstances were extreme. The costs of taking a case to the employment tribunal were raised from zero to a four figure sum in some cases. The demonstrable drop of 70% in claims being brought to the tribunal after the fee increases appeared to be directly attributable to the increases.

56. In considering the Supreme Court judgment, it is clear that very different circumstances apply in respect of court fees in Scotland.

• There has been a long history of charging fees in the Scottish Courts and it is not a situation of moving from zero fees to a very large fee.
• There has been no evidence that charging fees (even the increases introduced in November 2016) have resulted in a substantial drop in cases.
• There is a generous system of civil legal aid and exemptions in place, with the specific objective of increasing access to justice.
• The context of actions in the courts is very different. Whilst employment tribunal cases are often of limited monetary value, the courts deal with a greater variety of private law actions in terms of value and have a specific system of lower fees for low value cases. In very many cases, the fee is a small proportion of the value of the action.

Cost recovery

57. Many respondents highlighted the policy of ‘full-cost recovery’ and suggested that it is incompatible with the decision of the Supreme Court. The Scottish Government is pleased to clarify its policy in this regard.

58. The Scottish Government’s consultation did not refer to the previous policy of full-cost recovery, though six of the respondents suggested that the Government’s policy was still full-cost recovery. Such a policy has never been achieved by the Scottish Government in the past, although the increases in 2016 were substantial and brought us close to that goal. However, since that increase, the Scottish Government has pursued a policy of only increasing fees in line with inflation and in this latest consultation, has proposed an increase that is less than the rate of inflation projected by the OBR.

59. Whilst the term ‘full cost recovery’ has been used for some time, it should be remembered that it is only a convenient shorthand description for a complex policy which includes elements of public subsidy for civil court costs in order to enhance access to justice, including extensive provision of legal aid and a comprehensive scheme of exemptions. The Scottish Government considers that it is desirable that a greater portion of the costs of the civil justice system be recovered from those who use the courts, but that is entirely subordinate to the necessity that unreasonable barriers to the courts and access to justice are not erected.

Individuals with sufficient means (who do not qualify for legal aid or exemptions)

60. Self-evidently, the clearest source of concern would be with regard to individuals who have sufficient earnings to mean that they do not qualify for either legal aid or court fee exemption. The Scottish Government has seen no evidence that court fees cannot reasonably be afforded by people in that position.

61. In contrast with the situation in the Employment Tribunal where litigants normally only have a short window of three months to bring a claim, in the courts cases can generally (with some exceptions such as judicial review) be brought for a number of years. This diminishes the argument that claimants can only afford court fees by unreasonably foregoing day-to-day expenditure. In addition, in some cases (personal injury), litigants may benefit from the support of no-win, no fee arrangements which enable them to take forward actions.

62. Personal injury litigants may also be able to benefit from the introduction of the proposals before Parliament in the Civil Litigation (Expenses and Group Proceedings) (Scotland) Act 2018. The key objective of the Act is to increase access to justice through creating a more accessible, affordable and equitable civil justice system, by:

• making the costs of court action more predictable;
• increasing the funding options for pursuers of civil actions; and
• introducing a greater level of equality to the funding relationship between claimants and defenders in personal injury actions.

63. Under the Act, a pursuer will pays nothing up front to the cost of a personal injury case under a success fee agreement (a no win, no fee agreement). The provider of the success fee agreement (who could be either a solicitor or a claims management company) will be liable for the outlays incurred in providing the service. The provider is be entitled to the success fee under the agreement if the case is won (which will be the subject of a cap under regulations to be made by Scottish Ministers) and any expenses recovered from the opponent. Success fee agreements are said to be popular with clients since they are simple to understand, make the cost of the litigation more predictable and mean that the client does not have to pay anything until the case is concluded.

64. Further, an action under group procedure in the Court of Session, which allows a group of similarly affected persons to bring a single claim attracting a single fee instead of multiple individual claims each incurring separate fees.

Additional Matters raised

65. A number of other specific suggestions were identified during the consultation.

OPG Fees

66. The Scottish Government has listened to what has been said about fees for powers of attorney. Whilst encouraging people to seek powers of attorney is important, it also important that the costs of applications are met and that the courts are funded. The Scottish Government does not believe that current fee levels act as a significant barrier to the uptake of Powers of Attorney in Scotland. The Scottish Government will monitor the situation as it considers the future direction of fees.

Exemptions

67. As has been noted, the Scottish Government views the court fees exemptions as being absolutely fundamental to protecting access to justice. It is therefore committed to ensuring that the system is as robust as possible in ensuring that the most vulnerable members of society are protected.

68. The Scottish Government notes that there could be cases where an individual of limited means who would be financially eligible for civil legal aid or UK benefits is not in receipt of these at the relevant time, for example because they are waiting for an eligibility assessment to be completed. Such an individual experiencing hardship may make an application to the Scottish Welfare Fund^[3] which provides a safety net in a disaster or emergency.

69. As outlined above, the Scottish Government proposes that there be an increase in the income cut-off for the benefit related exemptions from £18,000 to £20,592, and that those on PIP with an income of £20.592 will be exempt from court fees. These reforms increase the coverage of the exemption scheme, reduce the chances of vulnerable people not qualifying for any exemption and thereby increase access to justice.

Conclusion

70. Having considered the consultation responses fully, the Scottish Government intends to increase most fees by 2% in each of the next three years. This is well under the inflation rates at present. According to the OBR in its ‘Economic and fiscal outlook - March 2022’^[4], the Consumer Price Index was at 5.5% in January 2022, and is expected to rise to 9% in the fourth quarter of this year and fall back to 4% in 2023.

71. Additionally the Scottish Government will create the new fees and make the changes to fee narratives that were described in the consultation.

72. The fees in these Orders are expected to run until 31 March 2025. A further consultation to consider further changes at that point will be expected in 2024. In addition, in the interim, the Scottish Government will monitor the following factors to see if they require changes to the fees regime.

• The continued roll-out of universal credit
• The impact of other legislation such as the Civil Litigation (Expenses and Group Procedure) Act 2018 which provides for group proceedings.
• The impact of wider court reforms such as the proposed Human Rights Bill and the Legal Aid Bill.