600% increase in government court fees will prevent some victims from making a claim

Posted By admin - 5th March 2015

A new government proposal would mean many victims of medical negligence won’t be able to afford to issue court proceedings, including a young girl who was left with severe brain damage when doctors failed to diagnose her case of meningitis. This is just one of the numerous case studies that have been sent by solicitors to the Law Society in a reply to a 600 percent increase in court fees.

The Law Society has used case studies to reiterate its concerns and illustrate the severe impact the proposals will have on ordinary people looking for access to justice. In its response to the government’s latest consultation on ‘enhanced’ court fees, as much as 600 percent increase to court fees as of January was announced by the government. Following a private consultation in December the announcement was made, in which the Law Society and other legal representative bodies were denied a voice.

The increase in fees due to take effect in April 2015 will have an enormous impact on those who have been a victim and suffered life changing injuries as a result of medical negligence and are unable to afford to them bring to court.

Law Society president Andrew Caplen said: “The government appears to be on a mission to turn the courts into a profit centre, amounting to a flat tax on those seeking justice. People whose lives have been turned upside down by life changing injuries suffered through no fault of their own may no longer be able to afford to access the courts to seek compensation to fund their care. “As well as affecting those who have been injured, the increases may leave small and medium sized businesses saddled with debts they are due but unable to afford to recover.”

Many clients’ claims are underwritten by solicitor firms, but the new fees mean it is unlikely the firms will have the amounts of cash required to be able to cover the fees pending what can be a long drawn out wait for the outcome of a claim.

The Law Society’s consultation response covers further proposed increases to court fees which if agreed will affect social landlords and councils. People in the most need or struggling with housing costs, would bear the brunt of fee increases. Non-profit organisations such as housing associations and local authorities, which provide housing for people will be hardest hit.

The government failed to identify mortgage lenders, social and private landlords as affected stakeholders, despite these being the most likely groups to be affected by the changes in its impact assessment. The government has raised the cost of online possession claims by 225 percent since April 2014.

Law Society president Andrew Caplen said: “Now social landlords and councils – which provide vital housing for older people, women fleeing domestic violence and those on low incomes – will be hammered by the government’s latest proposals. “The government is seeking to sell justice, contrary to the principles of Magna Carta.”

The Law Society’s response argues that:

  • Possession claims for fees will not be able to be recovered from debtors – as the government claims – because debtors are already in serious financial straits and will not be able to afford them.
  • Fees are not a secondary consideration in deciding whether to litigate – which the government claims – as landlords have no alternative. They have to issue proceedings to gain possession as they are required by law not to evict a tenant in arrears without a court order. Without this they cannot find new tenants to carry on their business.
  • Local authorities’ budgets are already stretched. Higher court fees will divert funds away from addressing basic housing problems.
  • Landlords could end up having to increase deposits required at the start of a tenancy to cover prospective court fees. Many tenants already struggle to meet the costs of deposits. The government has already been criticised by the Public Accounts Committee for failing to look at the effect of its policies on the wider community.
  • In response to proposals on fee increases for general applications in civil proceedings, the Law Society argues that the government fails to justify 100 per cent and 66 per cent increases in application costs, which are disproportionate to the work and costs involved for the courts service issuing a claim.

 

Case studies

There is a dramatic impact expected when the government announces a 600 percent increase in court fees for individuals and small and medium-sized. When gathering views from its members to inform its consultation response, the Law Society collected a number of case studies.

 

Case study 1 – Impact of court fees on low-income claimants

Mr Jones is a 66 year-old pensioner. He does not have any significant savings and supports his family with the income from his private pension. The pension fund was valued at £91,000 in 2010.

In 2010, Mr Jones’s independent financial advisor (‘IFA’) recommended that he transfer his entire pension funds into a different scheme. In 2012, they recommended that he move his funds again. The result was that Mr Jones’s entire pension was transferred into high-risk, unregulated collective investment schemes which are now either frozen, illiquid or have suffered catastrophic losses. Mr Jones’s solicitors have attempted to obtain copies of the investment documents from the IFA, to no avail. An application needs to be made to begin court proceedings. The current fee for issuing the application is £910. Once the increased court fees are implemented, the fee will be approximately £5,000.

As a result Mr Jones has already effectively lost his entire pension fund. He cannot afford a £5,000 fee. If these fees are introduced, he will have to discontinue his claim and will not be able to recover the money he lost as a result of negligent financial advice.

 

Case study 2 – Impact of fees on clinical negligence claims

A young girl was left with severe brain damage as the result of a failure by health professionals to diagnose meningitis when she was a toddler. The girl needs exceptionally high levels of care and accommodation to meet her needs. The mother and daughter were living in unsuitable accommodation which meant that the mother had to carry the girl up and down three flights of stairs several times a day, which was extremely difficult for her. Court proceedings had to be issued to secure financial settlement. The court fee for this claim would now be £10,000.

At the time the claim was brought the girl qualified for legal aid. As the injury did not occur at the time of her birth, she would not qualify for legal aid now. Her mother can’t afford the £10,000 fee, if the mother could not afford to access justice this would have left her and her daughter severely disadvantaged and struggling to cope.

 

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