Bite the bullet and raise the court fees cap

I’m not in principle a fan of court fees: the justice system is not to be treated as a cash cow, and the state has a duty to provide this service.

Court fees have certainly deterred meritorious claims and disproportionately affected those who are least able to afford any added costs of litigation.

Yet now we learn the fees haven’t even generated much money. Along with extra costs in the criminal justice system, the shortfall from court fees has left the Ministry of Justice scrabbling down the sofa for a spare £427m. Who would have predicted that (except anyone with even a vague understanding of economics of course)?

Are we stuck with court fees? Almost certainly. The ministry has to make a whole raft of new cuts before 2020 and it’s pretty unlikely repealing fees will be top of its priorities.

So here’s my counter-intuitive suggestion: let’s increase the fees that people can pay.

The MoJ appears to have been hamstrung in its desire to recoup the costs by a last-minute change of heart over doubling the cap on fees to £20,000, instead opting to keep it at £10,000. The government, in a rare moment of play-it-safeness, said it was too soon since the first cap was brought in and it needed more time to assess the effects.

The rationale against, pushed forcefully by the City lobby, was that increasing the cap would deter people from bringing claims, prevent access to justice and - here’s the nub - deter international clients from bringing high-value disputes to London. We were led to believe that international disputes would blow away to Singapore and New York because the litigants were asked to stump up an extra £10,000.

The City lobby will tell you - quite rightly - that this country has a proud record for delivering fair and impartial justice. Our judiciary has an unblemished reputation and English law is renowned across the globe. The paradox of this argument is that those who shout loudest about England’s benefits will also be the ones to tell you international disputes will leave these shores the moment the costs increase.

Is it not possible to argue that England is worth the extra money? Would millionaire litigants, presumably paying significantly more in legal fees, really be put off by an extra £10,000 in court costs? I’m doubtful.

Obviously the situation is more nuanced than simply ‘make the oligarchs pay more’. High-value claims can be brought by non-oligarchs, and they should not be forced to cough up £20,000 they don’t have simply to get justice.

But to dismiss the higher cap is to ignore the options available. Why not increase the cap for PLCs and exempt small businesses? Or means-test to ensure those who can afford it pay more? We have a fee remission system – can this not be moderated to ensure the increased cap is applied proportionately?

The money that might be recouped through raising the cap will not be huge. Of the 1.2 million money claims made each year, just 5,000 are worth £200,000 or more.

But the raised cap would be a start. I would rather international litigants paid for our justice system than we sacrificed another element of legal aid or closed a busy court. If our justice system is really as good as we say, they will be happy to pay.

John Hyde is Gazette deputy news editor