Legal Business Blogs

Civil court service fees generate £102m surplus for government as job cuts continue

The civil courts generated a £100m surplus in their most recent year according to new figures that are bound to hike concerns over the use of civil courts to subsidise the justice system.

Over the last year, HM Courts and Tribunal Service (HMCTS) has generated fee income of nearly £800m, £186m from family justice fees and more than £602m from civil justice fees, surpassing its own spend by £102m, while cuts to the service continue.

According to an annual report published on Wednesday (18 July), the civil justice court service brought in the fees during the year ending in March 2017, despite remittance fees pay-outs of £64m.

Concerns raised by those in the legal system over ever-rising fees and costs required to access civil justice, appeared to be confirmed by the report.

HM Courts and Tribunal Service (HMCTS) revealed that this year, fees charged to people and businesses using the civil courts to seek recompense had overtaken spending. Total fees that HMCTS charged over the year leapt up to £813m, fees charged by HMCTS, a substantial 15% increase on last year’s £709m.

Fee remittances the courts paid out only amounted to £65m for civil courts and £6.4m for tribunals, with spending on all civil cases other than tribunals totalling £621.5m and the latter, £180m.

Particularly revealing were tribunals fees, which generated £25m income, of which £12m related to asylum and immigration claims and £11m came from employment cases. The tribunal system suffered a £60m deficit at the end of the financial year – due to the shortfall in tribunal business. However, this deficit was down 45% on last year’s £110m.

The introduction in 2013 of separate fees for using the employment tribunal system, which was created in 1964, ‘coincided’ with a steep decline in the number of tribunal cases being brought.

According to the government, since 2013, individuals have been required to pay separate fees to issue their claims and have them heard at a tribunal, unless they qualify for a reduction or waiver on limited wealth or low income grounds.

The report also revealed the civil courts service reduced its full-time staff by 940 to 15,749 over the year, at the same time increasing the number of contract staff by 37% to 1,480. HMCTS said in a statement that it had ‘deliberately recruited staff to roles on a temporary basis to minimise the risk of redundancy to our permanent workforce’. However, this was unsupported by the 940 job loss figure.

Among the many voices opposing the rise in fees to access civil justice, Lord Justice Jackson suggested last autumn that the shift in cost of the civil justice system from taxpayers to litigants was wrong in principle.

The government’s attempts to turn a civil justice court system into a profitable business, dressed up as ‘reform’, have meant higher fees, job cuts, and lower spending and investment, and yet ‘surplus’ funds.

Susan Acland-Hood, chief executive and accounting officer at HMCTS, said: ‘As more of our products and services are successfully transformed, the difference between what has been previously considered ‘reform’ and what is considered ‘business as usual’ will become less distinct. ‘Reform’ is no longer an idea on a page or a picture of a theoretical future – it is a series of changes to how we work now that will make us better at what we do today.’

Total fines revenue decreased 10% to £900m in 2016/17, from last year’s £1bn, as income from confiscation orders fell from £357m to £209m. The report attributed this mainly to the fact criminal court charges are no longer made against convicts since December 2015, removing that revenue source.