Steep rise in court fees confirmed

Court fees are set to increase again in order to plug a £1 billion funding gap in the justice system, the Ministry of Justice has confirmed.

In a written statement, Justice Minister Shailesh Vara confirmed that fees will increase by ten per cent across a range of civil proceedings, including enforcement proceedings, determination of costs proceedings and civil business in magistrates’ courts, after a period of consultation last year.

Fees will also be introduced in the general regulatory chamber and tax chamber of the first-tier tribunal, and in the upper tribunal tax and Chancery chamber. Litigants will also be charged £100 to issue proceedings in the property chamber and £200 for a hearing. 

However, the Government has back-tracked on its commitment to increase the fee cap to £20,000 and will instead keep the maximum fee cap for money claims at the £10,000 figure introduced in March last year. 

Mr Vara said that courts and tribunals in England and Wales cost £1.7 billion in 2014/15, but the Government recovered only £700 million in income and that this growing funding gap needed to be closed.

He added: “Fees are never popular, but they are necessary if we are to reduce the burden of the courts and tribunals on the taxpayer.

“We have sought to protect the vulnerable at every stage. We have listened very carefully to concerns raised during the consultation and modified our proposals accordingly.”

In response, Law Society President Jonathan Smithers said: “The court service must not be treated as a profit centre, used to subsidise other public services. It is wrong to push through increases in court fees on top of those introduced in March 2015 when there has been no assessment of their effect.

“High court fees contribute to the development of a two tier justice system; they discourage people from bringing legitimate cases and make it harder for some people to get access to justice. Further increases will disproportionately affect people on lower incomes and some disabled people.”

Last year’s changes to court fees have already had a significant effect on some firms’ turnover and these proposed changes are likely to reduce profit margins and dissuade individuals from pursuing a case through the courts.

Link: Government response to the consultation on proposals to increase court and tribunal fees

Small business need to be ready for employment law changes in 2016

Last year saw a number of significant rulings and changes to UK employment Law and 2016 is likely to include a similarly high number of changes for which businesses need to be prepared.

Small to medium-sized enterprises (SMEs) should start planning now for the most significant changes to employment law. To help you with this please find the changes below:

National Living Wage

The new National Living Wage will require employers to increase the wages of workers aged 25 and over. From April 2016 the minimum wage for this group will increase to £7.20 an hour; an increase of 50p on the current full rate for this age group. The National Living Wage will increase every year, with the aim of it being 60 per cent of median earnings. It is expected to be £9 by 2020.

As with previous changes to the statutory wage, failure to pay could lead to fines and the prospect of being named and shamed by HM Revenue & Customs (HMRC).

Workplace pensions 

Although auto-enrolment has been in force for several years now, its phased introduction means that many smaller employers will now only begin to get to grips with it in 2016 and 2017.

Businesses can find out their staging date (the date by which they need to have the auto-enrolment scheme up and running) by checking on the Pensions Regulator’s website, but should bear in mind that it takes a few months to select a scheme, get it set up and put the employee paperwork in place.

In most cases, businesses need to start planning the process at least six months before their staging date. Failure to meet the staging date could lead to fines or even prosecution.

Zero hours contracts

In 2015 the Government introduced legislation so that exclusivity clauses in zero hours contracts banning an individual from taking on other work were no longer enforceable. However, as many commented at the time, the legislation did not give these individuals any remedy if they were dismissed or punished for taking on other work.

However, on 11 January 2016, new legislation (The Exclusivity Terms in Zero Hours Contracts (Redress) Regulations 2015) came into force giving zero hours employees the right to bring employment claims if they are dismissed or subjected to a detriment for breaching an exclusivity clause.

Statutory pay rates

Statutory Maternity Pay will not be increased this year and will remain at its current rate of £139.58 a week (paid for 33 weeks after the employee has received six weeks’ pay at 90 per cent of her weekly earnings).

Link: Department for Work & Pensions

New adoption law seeks to speed up placement of children in stable homes

The Government has proposed a new adoption law that will force judges and social workers to take account of children’s need for a stable family to ensure that the ‘long-term stability and happiness’ of children comes first.

The new law comes after a significant decline in the number of children in the state care system being adopted since a landmark Supreme Court ruling in 2013, which said that no child should be permanently taken from its birth mother and father except as ‘a last resort’ and in circumstances ‘where nothing else will do’.

The ruling was subsequently reinforced by Sir James Munby, President of the Family Division, in a series of court judgments that has led to the number of children put forward for adoption being cut in half.

Education Secretary Nicky Morgan said the new law would make it explicit that the child’s recovery from abuse and neglect, and the need for a long-term home, should be the most important factor.

“Every single day a child spends waiting in care is a further delay to a life full of love and stability – and this simply isn’t good enough,” she said.

“We have a responsibility to transform the lives of our most vulnerable children, making sure they get the opportunities they deserve.

“We are changing the law on adoption to make sure decisions rightly prioritise children’s long-term stability and happiness, so that children are placed with their new family as quickly as possible, helping them fulfil their potential and get the very best start in life.”

The Department for Education has said that the new law will make it clear that councils and courts “must place children with the person best able to care for them right up until their 18th birthday, rather than with carers who cannot provide the support they need over the long-term.”

The Department added: “Concerns that life-long stability and high quality care that adoptive families can bring is not always given sufficient weight by councils and courts when they make decisions about where children should live – sometimes focussing on just who can support the child in the short term.”

Ministers also promised an additional £200 million of funding for adoption agencies to ‘break down bureaucratic barriers in the adoption system which can lead to children waiting in care for months longer than necessary’.

Hugh Thornberry of the charity Adoption UK, said: “This legislation and funding announcement is extremely good news for all of those involved in trying to improve services for adoptive families and adopted children.

“It is vital, when planning for permanence, that all the child’s needs are considered as we know from the experience of our members that many children require highly specialised and therapeutic parenting to overcome early traumatic experiences.”

Link: Education Secretary unveils plans to change adoption law

New EU data laws shake up privacy regulation

The European Commission originally put forward its EU Data Protection Reform in January 2012 to make Europe fit for the digital age (IP/12/46), but in December 2015, an agreement was found with the European Parliament.

More than 90 per cent of Europeans say they want the same data protection rights across the EU, regardless of where their data is processed, and this will soon be a reality. As a result, businesses will need to be aware of how to comply. 

The reform consists of two policies:

• The General Data Protection Regulation will enable people to better control their personal data. At the same time, modernised and unified rules will allow businesses to make the most of the opportunities of the Digital Single Market by cutting red tape and benefiting from reinforced consumer trust
• The Data Protection Directive for the police and criminal justice sector will ensure that the data of victims, witnesses, and suspects of crimes are duly protected in the context of a criminal investigation or a law enforcement action. At the same time, more harmonised laws will also facilitate cross-border co-operation of police or prosecutors to combat crime and terrorism more effectively across Europe

It is believed that the reform will allow people to regain control of their personal data, which may create a burden for some businesses. 

According to a recent Eurobarometer survey, 67 per cent of Europeans are concerned about not having complete control over the information they provide online, while 70 per cent worry about the potential use that companies may make of the information disclosed. The data protection reform will strengthen the right to data protection, which is a fundamental right in the EU and allows users to have trust when they give their personal data.

The new rules address these concerns by strengthening the existing rights and empowering individuals with more control over their personal data. These include:

• easier access to your own data: individuals will have more information on how their data is processed and this information should be available in a clear and understandable way
• a right to data portability: it will be easier to transfer your personal data between service providers
• a clarified “right to be forgotten”: when you no longer want your data to be processed, and provided that there are no legitimate grounds for retaining it, the data will be deleted
• the right to know when your data has been hacked. For example, companies and organisations must notify the national supervisory authority of serious data breaches as soon as possible so that users can take appropriate measures

The Commission will work closely with Member State data protection authorities to ensure a uniform application of the new rules and during the two-year transition phase from 2016 to 2018, the Commission will inform citizens about their rights as well as update companies about their obligations.

Link: Reform of the data protection legal framework in the EU

Family courts fail young mothers

At least one in four women will return to the family court, having previously lost a child through a court order, and the chances of having a child removed increase to at least one in three for women who were teenagers at the birth of their first child. 

A team of researchers, funded by the Nuffield Foundation and led by Professor Karen Broadhurst from Lancaster University, have updated initial findings that were first presented last year confirming that a ‘hidden population’ of mothers are caught up in a cycle of family court proceedings with children being removed from women’s care.

This research (outlined in ‘Number of newborn babies taken into care more than doubles in five years’, 14/12/15) identifies for the first time the relationship between young motherhood and the risk of court-ordered removal of children and statistics concerning removal at birth. The paper covering this research, titled ‘Connecting events in time to identify a hidden population: Birth mothers and their children in recurrent care proceedings in England’ is published in the British Journal of Social Work.

The investigators are based at Lancaster University, Brunel University in London and the Tavistock and Portman NHS Foundation Trust. Further detailed case file review work is ongoing and the study will conclude in June 2016.  

The study uses electronic records held by the Children and Family Court Advisory and Support Service (Cafcass) and findings are based on care applications made by local authorities in England over a period from 2007 to 2014. The research team found more than 13,000 infants were subject to legal proceedings at or close to birth (within 31 days) for the period.

The research team warn that without further evaluation and a far wider roll-out of preventative programmes, it is highly probable that local authorities and family courts will continue to see a sizeable population of mothers reappear through the family courts. The team welcome initiatives including an intensive support pathway as part of the National Family Court and the Pause Initiative, but say more is needed to ensure these initiatives are established and sustained in mainstream practice.

Link: Lancaster University

Personal injury claims limit rise not welcomed by Law Society

Independent professional body, the Law Society, has criticised a Government plan to raise the small claims limit for personal injury claims to £5,000 and stop compensation payments for so-called ‘minor’ soft tissue injuries.

Responding to the proposals, Law Society President Jonathan Smithers said:

“The Law Society is gravely concerned that these proposals will completely undermine the right of ordinary citizens to receive full and proper compensation from those that have injured them through negligence. These proposals will stop people obtaining legal advice for all personal injury claims below £5,000 and stop people claiming for often debilitating injuries arising from road traffic accidents if these injuries are considered minor.

“This is a fivefold increase in the present level of cases currently within the small claims procedure, benefiting those who have negligently harmed people and will result in more people trying to work their way through a complex court system without any legal advice. People recovering from their injuries will have to bring claims as litigants in person and this can be very unfair because those defending the claims can often afford to pay for legal advice. This therefore undermines ordinary people’s ability to access justice. Especially if defendants simply deny liability, forcing people to fight through the courts without legal help.

“Personal injury claims, even lower value claims, can include serious injuries arising from the fault of an employer or other road traffic accidents where legal rights can be very complex and the injuries caused debilitating. A new limit of £5,000 will mean personal injuries including facial scarring would be considered as ‘small claims’. This is totally unacceptable.

“These proposals are not, as stated, about stopping fraudulent claims. Fraudulent claims are clearly repellent but they should be dealt with by targeting the fraudsters and not the vast majority of honest claimants who have been injured and bring genuine claims.”

The Law Society argues that the small claims procedure is an essential part of the civil justice system that enables consumers and businesses to pursue low value claims without the risk of a large bill for legal costs if they lose. It states that a substantial increase to the current limit will deny many thousands of people the right to seek the advice of and representation by a solicitor.

Link: The Law Society

Three quarters of businesses do not understand competition law

More than three quarters of British businesses (77 per cent) do not fully understand competition laws, according to new data from The Competition & Markets Authority (CMA). 

The study by the CMA found that 55 per cent of the company bosses surveyed by the CMA knew price-fixing was illegal, while 27 per cent were unsure whether it was acceptable to agree prices with rivals.

A further 23 per cent thought it was “okay to discuss prospective bids with competing bidders”, and 29 per cent were not aware whether bid-rigging was illegal.

Breaching competition law can lead to fines of up to 10 per cent of global turnover for a business and their directors may be disqualified from managing a company for up to 15 years if found guilty.

More serious cases can be considered criminals offences, which can result in individuals being jailed for up to five years.

Following the revelations, the CMA has published new guidance online to help businesses avoid becoming embroiled in price-fixing, bid-rigging and market-sharing.

“We have worked closely with groups representing small businesses to learn more about what they do and don’t know about competition law and they told us they need information that is short, simple and easy-to-use,” said Alex Chisholm, the CMA’s chief executive.

“These new materials explain which behaviours are illegal, and why they cause harm. The victims of anti-competitive activity will often be other businesses, so knowing what illegal behaviour looks like and how to report it can help businesses protect themselves from others which are acting unfairly.”

Human Rights Act used more frequently in UK legal cases

A new report by Thomson Reuters has revealed that The Human Rights Act 1998 is being deployed more frequently in legal disputes, including business and tax cases.

The research shows that 428 court cases ranging from tax appeals to business disputes, invoked Human Rights Act legislation in 2013-14, up from 410 cases in 2012-13.

During this period, the Act was cited in 46 business cases and nine tax-related cases, according to the Thomson Reuters report.

One of the most recent high-profile legal disputes to feature the Human Rights Act was between HM Revenue & Customs (HMRC) and more than 150 members of Ingenious Media, a film investment scheme that was investigated by the authority.

The investors applied for judicial review of HMRC’s disclosure of information about Ingenious to the media, arguing that it was a breach of their right to privacy under Article 8 of the Act. However, they failed to win their appeal.

The increase in the number of times the Human Rights Act was cited in UK legal cases is significant, as the government prepares to announce plans to circumvent the Act and replace it with a British Bill of Rights.

The current Conservative Government believe the Act “undermines the role of UK courts” and is open to abuse. They also believe it has created a “courtroom compensation culture”.

Last month senior government sources revealed to The Sunday Times that Justice Secretary Michael Gove is preparing to draft a consultation document which will set out what Britain’s position will be in regards to the European Convention of Human Rights (ECHR), upon which the 1998 Act is based.

It is understood that Britain will remain a signatory to the ECHR, but a new Bill of Rights will be created that will be above the ECHR.

When making their judgements, British judges may currently use their discretion on whether to follow rulings made by the ECHR as the ECHR’s rulings are not binding on British courts.

Woman prevented from pursuing lawsuit against ex-husband

A woman who tried to pursue thousands of pounds from her ex-husband through the divorce courts has been banned from bringing further claims against him.

In a landmark ruling in the High Court, Vivien Welch was told by a judge that she cannot sue her ex-husband Denis Welch for another two years, after embarking on an “obsessive and unjustified” legal battle against him. 

Mrs Welch had brought repeated claims against her former husband in the hope of securing a huge pay-out and had tried tirelessly to secure evidence against him by tracking his emails and hiring a private investigator to expose his earnings, the court was told.

Whilst giving evidence, the court heard that Mrs Welch moved in with her husband Denis in 2007, after meeting him on an online dating website. 

It is claimed that during the course of their marriage her husband spent around £500,000 on helping his wife pursue a divorce claim against her first husband. 

However, when the Welch’s separated in 2013, a district judge ordered the businessman to pay his wife £1,000 a month in maintenance and buy the couple’s house so that she would have somewhere to live.

Mrs Welch appealed the decision, arguing that her husband had hidden his assets. A judge sitting in Portsmouth described her appearance before him as “vengeful, obsessive, irrational, and unjustified” during a review of the case.

He upheld the original court’s decision, finding that there was no reason to believe that the Singapore-based businessman had been dishonest about his assets or financial situation. 

Mrs Welch then took the case to the High Court’s Family Division for review, where the judge concurred that she had effectively become a “professional litigant”.

Rejecting her appeal, Mr Justice Holman said: “Frankly, this bitter and intense litigation must be closed to the maximum extent possible. It is quite extraordinarily destructive. It is phenomenally expensive.”

Justice Holman also took the decision to ban Mrs Welch from pursuing the case against her ex-husband for a further two years, after hearing that her previous solicitors were still chasing their debts; albeit a reduced total of £150,000. The court heard that her only income is £123 a week in benefits. 

“I am afraid that today Mrs Welch cannot put her hands to a pound, let alone £150,000,” said Justice Holman.

Rise in number of contested wills

Ministry of Justice figures show that there has been a steep rise in the number of wills being contested in court.

According to Ministry of Justice figures, the High Court heard 178 probate disputes in 2014; the highest level in England and Wales since 2007 and almost double the total of 97 in 2013.

It is reasonable to believe that the rising number of cases heard in the High Court do not fully show the extent of the problem as only a small number of disputes will reach the High Court due to the majority being settled beforehand.

The growth in the number of cases reaching court is thought to be as a consequence of complex family structures such as re-marriages, cohabitation and step-family members, as well as families living further apart. The result of this could be that channels of communication between family members may not be as clear as they once were, so sibling rivalries, resentments and arguments can be left unresolved for long periods. 

Some challenges to wills may be seen to be legitimate. The case last Summer of Ilott vs Jackson was described as a ‘landmark ruling’ where adult children could challenge their parents’ wills, despite the Inheritance (Provision for Dependents) Act 1975 having been around for many years and used in this case. Under the Inheritance Act it has always been possible for adult children to argue that reasonable provision has not been made for them.

Link: Ministry of Justice