Ministry of Justice consults on updating the ‘Help with Fees’ Scheme
This month the Ministry of Justice has published a Consultation paper seeking views upon its plan to revise the ‘Help with Fees’ remission scheme (‘the Scheme’). The consultation runs for 12 weeks and closes on 30 May 2023. Any changes are not expected to take effect until this Autumn.
Help with Fees Remission Scheme
The Scheme was introduced in 2013. Its aim was to ensure that the legal system was accessible to all by providing financial help towards the cost of court and tribunal fees for those with limited financial means.
In 2021/2022, HM Courts & Tribunals Service granted partial/full fee remissions to 122,517 applicants amounting to £81 million.
Eligibility under the Scheme
At every stage of a claim when a court fee is payable, a claimant can submit a ‘Help with Fees’ application. If successful, the claimant does not have to pay the required court fee or, if the fee has been paid, it can be reimbursed by the court.
Understandably, the means test applied to an application is stringent and an assessment of the applicant’s income and savings is required to determine eligibility for fee remission. Currently, the capital threshold varies according to the size of the Court fee and ranges from £3,000 to £16,000. Applicants who pass the capital test proceed to the income test which is an assessment of the applicant’s gross household income in the month prior to the application. Applicants receiving a means tested benefit automatically pass the income test. Otherwise, the current gross monthly income threshold is £1,170 for a single applicant – the equivalent of an annual income of £14,040.
The cost of living crisis in the UK continues and Court fees are becoming increasingly unaffordable. The MOJ’s consultation paper seeks views upon proposals to increase the relevant income/savings thresholds and revise the criteria used to determine eligibility under the Scheme.
The current gross salary for a person earning the National Living Wage working 40 hours per week is £19,760 and thus claimants on the lowest incomes would not currently qualify under the Scheme. With the National Living Wage set to increase to £10.42 per hour from 1 April 2023 (£21,674 per annum), the MOJ is seeking to update the Scheme to ensure the relevant thresholds increase in line with these changes and to update the application process.
Whilst the aim of the Scheme is laudable, it does attract some criticism from practitioners – in 2021/2022 HM Courts & Tribunals Service lost £81million of revenue and that figure is set to rise if the proposal to increase the thresholds for eligibility is approved. There is an argument that the Scheme benefits defendants and their insurers and that a losing defendant should pay the Court fee.
The application process can also be time consuming and burdensome for claimants who are required to back up their applications with documentary evidence of their and their partner’s earnings.
Also, under the current Damages Claims Portal procedure, it is not possible to lodge the application form for fee remission on the portal so it has to be paid by claimants or their solicitors and then claimed back which can cause cash flow problems.
The consultation paper states the MOJ intends to publish full details of the revised scheme within 12 weeks of the consultation closing. Thus, full details of the revised scheme are not expected before the end of August 2023.