Google searches on the costs of issuing proceedings in other jurisdictions produced the following information on the costs of issuing a claim worth over £50,000 in various jurisdictions, chosen at random. It should not be taken as authoritative, but gives an interesting guide:

England and Wales : before April 2003 £500, April 2003-Dec. 2004 £600, after Jan. 2005 £700.
Maine Supreme Court : $120
Connecticut Supreme Court : $225
US Federal District court : $150
Ontario Superior Court : CA$157
Queensland : AU$435 (about £170; $870 for a company)
Hong Kong : HK$1045 (about £70)
France : gratis
Spain : gratis

British government policy is expressly that English and Welsh court fees should cover the cost of the court service. The underlying view is of course that public functions work best if they are subject to market disciplines, and one way of introducing market discipline is to ensure that the consumers of a service or facility meet its costs as directly as possible. Other western European countries, regardless of political colour, do not have anything like such a pure ‘capitalistic’ approach to the provision of services which are regarded as being public services. The figures above also nicely illustrate the well-known paradox that the US is, like Western Europe, far behind Britain in introducing market discipline to public services. It is tribute to Thatcherism that in Britain even the left have accepted the logic of market discipline in the public sector. Market discipline does however has its limits even in the English court system. A high degree of cross-subsidy between courts is tolerated. The family courts are a big loss-maker. The County Courts and Insolvency Courts make a profit.

Very high fees breach human rights: If the British Labourites are unusual in their determination that the English court system should pay for itself, Polish communists went further and used court fees as major source of state revenue. Since the fall of communism Poland has continued to struggle with high court fees, assessed in part as a percentage of the value of the claim.

In Kreuz v Poland the claimant objected to being required to pay a court fee at the already reduced rate of PLZ 100,000,000 (that is old zlotys: in 1994 new zlotys were introduced at 1 new zloty to 10,000 old zlotys). That sounds a lot. The judgment does not make clear the sums involved in a more recognizable currency, but according to my calculation, it seems to have been a court fee of about US$4400 (at the dollar rate then current) in a case worth $27,000. This must be placed in the context of Polish wages and prices in 1993. The ECHR found that the fees breached Art. 6 of the European Convention on Human Rights. At paragraph 60 it said,

“The Court accordingly holds that the requirement to pay fees to civil courts in connection with claims they are asked to determine cannot be regarded as a restriction on the right of access to a court that is incompatible per se with Article 6 § 1 of the Convention. It reiterates, however, that the amount of the fees assessed in the light of the particular circumstances of a given case, including the applicant’s ability to pay them, and the phase of the proceedings at which that restriction has been imposed are factors which are material in determining whether or not a person enjoyed his right of access and had “a ... hearing by [a] tribunal""

Clearly English court fees fall far short of this. In any event, the English court fees would not fall foul of Art. 6 if only because of the provision in this fees orders, as in its predecessors, for exemption from court fees (broadly, for people on benefit), and for discretionary remission for persons not entitled to exemption, but who still have difficulty paying. Remission and exemption are administrative matters for the court staff, and are applied for by filling in a form. The Department of Constitutional affairs told me that there were 28,148 applications for remission granted in 2003/04, and 254,284 for exemption. Those figures suggest that the system is working, as does the lack of reported Judicial Review applications concerning refusals of remission.

Fees will rise again, which is unjust but tolerable: According to the consultation paper on the current set of increases, the projected shortfall after the proposed increases is 12%. To this projected shortfall must be added further planned modernization costs. It follows that, applying the principle the fees should rise to meet costs, we can expect in the fairly near future a further steep hike in court fees. This is clearly unwelcome. The ‘market discipline’ thinking is convenient for the government, and would sound sensible if retailed by Gordon Brown under cover of a mind-numbing blizzard of ostensibly illuminating statistics. However, a moment’s reflection shows that it is palpable nonsense. If the family courts are to be subsidized, why is it more fair to subsidize them out of fees paid by users of the County Courts and Insolvency Courts, than to subsidize them out of general taxation? It is not. On the contrary, it is obviously unfair. Small wonder that the Prime Minister and the Chancellor of the Exchequer have not chosen to extend this 'market discipline' to their own country: Court of Session fees are very much lower (a point which English solicitors may need to mention to clients who have a choice of jurisdiction). Having said that, our court system is so much better and faster than the courts of many countries that we can count ourselves lucky, and that may make our high fees tolerable.

No remission of deposit in bankruptcy petitions: Where the fairness of our system breaks down seriously is in the insolvency courts. Whereas the court fee may be remitted, the deposit for the costs of the official receiver cannot. The requirement to pay this deposit stops many insolvent individuals petitioning for bankruptcy. The fairness of this deposit was challenged in a judicial review application in R v Lord Chancellor, ex parte Lightfoot COURT OF APPEAL (CIVIL DIVISION) [2000] QB 597, [1999] 4 All ER 583, [2000] 1 WLR 318. The applicant could not raise the deposit to make a bankruptcy petition. The Court of Appeal decided, in effect, that a citizen’s human rights under Art. 6 do not extend to a right to petition for bankruptcy. Simon Brown LJ seemed to reflect the ‘market discipline’ principle when he referred the state’s entitlement to charge for public services which it entrusts to private contractors:

"Article 6(1) accordingly appears to me to have no application to the bankruptcy process sought to be instigated, as here, at the suit of a debtor. But even were it otherwise, I would hold that if and insofar as the deposit precondition constitutes a restriction upon the appellant’s right to petition the court, it has a legitimate aim and is by its nature proportionate to that aim. Its legitimacy lies in an aspiring bankrupt’s need to have the bankruptcy administered by a third party and the state’s entitlement to require some payment at least in respect of the cost of that third party’s service. The fee represents but a modest proportion of that cost and can hardly therefore be judged disproportionate."

The case was on a bankrupt's own petition, but its logic by extension is that Art. 6 rights do not include the right to make any petition in the Insolvency courts, whether for one's own bankruptcy or in connection with the insolvency of any other natural or corporate person.

The problem with the reasoning - although it may be a problem whose solution lies in the proper sphere of parliament, rather than of the courts - is that, even if no Art. 6 right is breached, it seems terribly unfair that ‘rich’ bankrupts, people like Jonathan Aitken, will usually be able to put their hands on a few hundred pounds for the deposit, while great numbers of ‘poor’ bankrupts, who need the facilities provided by the insolvency regime no less, are shut out from using those facilities because they cannot raise the deposit. Of course, markets do discriminate in favour of the rich: that is the point of a market, and is one downside of running public services as a market or in ways designed to mimic a market. A system which makes a petition for one’s own bankruptcy a middle class luxury is a harsh one. It is disappointing that the latest Insolvency Proceedings (Fees) Order (2004), increasing the deposit for a petition presented by the bankrupt himself to £310, makes no provision for exemption from, or remission of, that deposit. This is certainly a policy failure, since the non-remittable deposit which the Department of Constitutional Affairs has put forward and parliament has set, as well as being unjust, has the effect of undercutting the policy of the Enterprise Act to introduce a more benign bankruptcy regime. It is a matter which deserves urgent attention.

Dr John Birchall - Professional English, Legal English, and Common Law Training