Proposals for further legal fee rises “not fit for purpose”, says independent committee

24 January 2014

The Regulatory Policy Committee (RPC), set up by government to independently assess the cost of regulation to various stakeholders, has described proposals to increase legal fees for civil cases as “not fit for purpose”.

Secretary of State for the Ministry of Justice Chris Grayling planned to increase the amount people are charged to take cases to a civil court in order to raise £200 million for the Treasury.

Civil courts mostly deal with domestic issues, such as divorce, child contact and adoption. However, some employment claims – normally those made while the worker remains in their position rather than after dismissal – can also be taken to a county court rather than a tribunal.

There are several advantages to taking an employment claim through the civil court system, including the fact that – unlike at tribunal – there is no cap on the amount of compensation that can be awarded. Furthermore, the time limit on cases is six years rather than three months, so if a worker has missed the deadline to bring their case to tribunal, they may still have an opportunity to have it heard at a county court.

However, county courts also hold a higher risk for workers with employment disputes, as the losing side is ordered to pay the costs of the winning side.

Claims such as breach of contract, constructive dismissal, deduction from wages, injunctions (such as those to stop an employer from making mass redundancies), negligence (for instance, providing an unfair and untrue reference) and personal injury cases relating to psychiatric harm in the workplace can be taken through the civil court system.

With fees for taking a case to an Employment Tribunal introduced in July last year, higher civil court costs could completely bar workers from access to justice due to the disproportionate expense of making a claim.

But after the RPC gave Mr Grayling a rare ‘red report’ for his impact assessment on the changes, it seems the policy will need to be reviewed.

“The impact assessment lacked clarity,” it warned, stating that some sections were “without any supporting evidence or discussion of the risk”.

“The Ministry of Justice has not explained sufficiently the outcome the proposal is intended to achieve – whether the proposal will result in the court service generating an adequate level of revenue to meet its costs, or whether a surplus will be generated,” it said.