The funding fallacy
Date: 26 September 2008
Authors: David Greene
Issue: Vol 158, Issue 7338
Categories: Opinion, Costs
The letter recently sent by Lord Justice Leveson, the senior presiding judge for England and Wales, to 2,000 judges and 28,000 magistrates warning of the cost consequences of a shortfall in income for the courts, highlights once again the funding fallacy that lies at the heart of the problems the civil courts face.
Leveson LJ appears to have been addressing himself largely to the criminal justice process, but any squeeze there will have an immediate effect on civil justice, given the priorities of the former. The letter comes at a time when despite the best efforts of all involved, practitioners are reporting increasing problems in county courts. It had been hoped that the new partnership agreement between the judiciary and the courts service for running the courts and protecting their budget was going to assist in resolving some perceived problems. The judiciary achieved a greater part in running the courts and “transparency” in the budget process but this announcement has thrown a spanner in the works to put it mildly.
The High Court is, of course, also not immune from increasing budgetary restrictions. The lord chief justice recently announced that the maintenance backlog in the courts had risen from £38m in 2000 to £200m now and would remain at that level for the next three years. In the annual report for the county courts for 2007, Leveson LJ painted a fairly gloomy picture of the problems the civil courts face, with high turnover of staff, reliance on temporary staff , and very tight budget restrictions.
Self funding
For many years now the government has required that the civil justice process must be self funding. This has seen very sharp increases in fees for the court process. That looks set to continue but with increasing emphasis on charging for particular services delivered by the courts. The HMCS annual report for 2007–08 was recently published reporting that total operating income of HMCS was £593m in 2007–08. Fees relating to services to users of the civil courts provided £444.6m which was slightly lower than the previous year. The great bulk of that income comes from fees in the county court and High Court.
So if the process has to be self funding it does of course take on the appearance of a commercial enterprise. If that is the modern approach then it has to be said that it’s a mighty odd way to run a business. So odd is it that not surprisingly the market for its services is voting with its feet and walking away. It is walking away because the fees charged are excessive and the service it provides is, with respect to all those working in the process, who do their best in difficult circumstances, not up to scratch and getting worse. Applications in care cases by local authorities, for instance, have dropped by 25 per cent since May. Local authorities were faced with a rise in the cost of bringing care applications from £150 to £4,825 from April 2008.
Privatisation
One could start to see the inklings of a privatisation of the civil courts. Perhaps a little private enterprise adjustment might improve service and the process. But the fact is that the very existence of the civil justice process is not a business. It underlies the rule of law and the enforceability of rights in law and contract. It is a foundation stone to a civil society. The example of the cost of care proceedings is a case in hand. If local authorities are shying away from the court because of the fees, what is happening to the children who would otherwise be the subject of an application?
Support for civil justice What is so important about the government’s approach however is that through the marriage of the fee system and the self financing regime it is the poor who support the institution of civil justice on which everyone relies. It is those that pay the fees that keep the thing afl oat. The court service in its annual report lauds the great success of money claims on line and possession claims on line. The claimant will pay the fee initially but then add it to the debt to be recovered. The respondents to such claims will be less able to pay the consequent fees and costs but on the basis that they are recovered, those fees then pay for the civil courts. That is in short iniquitous.
Falling on deaf ears
As previously the government will turn a deaf ear to these protestations but even if one accepts the self financing principle, the government seems to be going an odd way about its investment to generate the necessary fee income.
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