The Scottish Government (SG) has produced a consultation paper on its proposals for increasing fees payable in the Scottish courts and tribunals. The SG has stated that the proposed increase seeks to achieve a full recovery of costs through the payment of fees, which remain the courts' most significant source of income. Presently, two options have been proposed for the potential increase: (1) a flat rise by 24% of all fees, or (2) a targeted rise where only certain fees in the Court of Session and the Sheriff Court will be increased.
Rationale
The SG's main justification for the proposed increase is achieving full cost recovery, dispensing with the need for any government subsidy. According to figures from 2014/15, the Scottish Courts and Tribunals Service (SCTS) is running at a £5.4 million deficit which has nearly halved since 2010. In the consultation paper on the issue, the SG stated that the court service should be able to recover its costs from those engaging with the court process. Presently, the SCTS only recovers 83% of its costs from fees.
The SG argues that the increase is necessary because of the spending cuts to Scotland's budget in the last spending review conducted by the Westminster Government. According to the Deputy First Minister, the cut will effectively see Scotland's budget reduced by 12.5% in the period 2010-2020. An earlier review of court fees conducted back in May 2015 proposed an increase of 4%, in line with inflation and the need for relatively small IT improvements in the courts system. Nonetheless, the SG has stated that it now finds itself in a position where a push for full recovery of costs is necessary due to the continued cuts. The consultation paper does not mention Holyrood's newly devolved taxation powers in terms of Income Tax and the Land and Buildings Transaction Tax (which are now set and levied by the SG directly), or what impact they might have on the SG's spending capacity in the future.
The SG considers that the courts' costs should be borne only by those who can afford to so do and has reiterated its stance on accessibility of the courts for every member of the public. In line with this, a number of exemptions will be introduced, securing access to the justice system for people on low incomes and benefits.
The increase
Under the first proposed option, the SG will introduce a 24% flat increase to all fees presently charged. It has been estimated that this will recover an additional £4.9 million. In this scenario, the fee for raising an action in the Court of Session, where a large portion of commercial litigation takes place, will see an increase from £214 to £266, while the hearing fee for a single judge court would increase from £96 per half hour to £119.
The second option the SG is considering is increasing fees selectively, focusing mainly on the fees for raising actions in the Court of Session and the Sheriff Court. This increase is expected to bring in additional £6 million, and will see the fee for raising an action in the Court of Session increase to £300 and the hearing fee for a single judge court per half hour to £200.
The SG stated that either of the options was not considered as a deterrent to the raising of actions, since 'the individual fees will still be relatively low, particularly when viewed against the total costs of taking legal action including the cost of legal advice'.
Reactions
Both the Law Society of Scotland and the Faculty of Advocates have already voiced concerns about the proposed increase.
The President of the Law Society, Eilidh Wiseman, stated that the courts were a 'public resource' which contradicted the full cost recovery policy the SG was pursuing. Ms Wiseman further mentioned that clients might see a less diverse legal services market, since the fees would be prejudicial to smaller legal practices.
At the same time, while being more cautious, the Dean of the Faculty of Advocates, Gordon Jackson QC, voiced concerns about the hurdles such an increase might introduce to members of the public on lower incomes.
Both professional organisations will be responding in full to the SG's consultation paper.
Comment
Any increase in court fees as large as this would always be an issue of controversy. The main line of division appears to lie between those who consider the provision of court services an obligation of the state, which is to be funded by the public purse, and those who find it should be provided for by those who use it only.
In any case, it will continue to be significantly cheaper for businesses to raise actions and litigate in Scotland in comparison with England, where the court fee for raising an action can be as much as £10,000, if the amount claimed is over £200,000 or unlimited.
The consultation closes on 12 October 2016 and all relevant information, including how to respond, can be found on the SG's website.
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The material contained in this article is of the nature of general comment only and does not give advice on any particular matter. Recipients should not act on the basis of the information in this e-update without taking appropriate professional advice upon their own particular circumstances.
