CHAPTER 4
COMMITTEE VIEWS AND RECOMMENDATIONS
4.1
This chapter puts forward the views of the majority of the committee,
which comprises Government and Coalition senators.
4.2
A wide range of issues were canvassed during this inquiry, in relation
to the reasonableness of current federal court fees, the process of setting
court fees, and access to justice policy issues. The committee has formed views
on the most significant issues raised by submitters and witnesses to this
inquiry.
Reasonableness of federal court fee increases since 2010
4.3
The committee heard significant evidence regarding the reasonableness of
fee increases in the federal courts since 2010.
4.4
The committee notes that the fee increases introduced in 2013 have been
broadly in line with the capacity of different litigants to pay, with percentage
increases in the range of 15-20 per cent for individuals and 40 per cent for
corporations, as well as new higher fees for publicly listed companies. The fee
increases are balanced by several access to justice measures which should
ensure equitable access to the court system. These include making small
businesses eligible for the lower fees paid by individuals (rather than the
corporations rate), and reintroducing fee exemptions and waivers for
disadvantaged litigants. The committee considers that these are measures that
will assist in reducing the financial burden for small businesses and
low-income individuals who need to access the courts.
4.5
The committee also considers that any decrease in the level of federal
court fees would have a budgetary impact on government revenue and the federal
courts themselves, and could consequently lead to a reduction in court services,
particularly in regional areas. As such, the committee considers that reducing
the revenue available to the courts from court fee increases is inappropriate
at the present time.
Overall costs of litigation
4.6
The Department emphasised that court fees are only a small proportion of
the costs of accessing the courts where legal representation is involved, and
that fee increases will not necessarily impede access to justice relative to
the total cost of litigation. The committee agrees that high legal costs are
much more likely to prevent individuals from accessing the courts than filing
or other fees associated with bringing litigation before the courts.
Cost recovery
4.7
The Department informed the committee that the government's stated
intention in restructuring federal court fees, and in particular in
implementing the 2013 changes, has been to increase notional cost recovery
in the courts to around 25‑30 per cent of the cost of running the
courts. In percentage terms, this is broadly in line with the level of cost
recovery in other Australian jurisdictions.[1]
4.8
The committee notes that this level of cost recovery is still well short
of the level of cost recovery in some comparable overseas jurisdictions, such
as the United Kingdom, where cost recovery in the courts has averaged 80
per cent of court running costs for the past several years.[2]
4.9
Accordingly, the committee considers that it is appropriate for some of
the costs of running the courts to be recouped through court fees.
Policy process
4.10
The committee has heard that there are currently no foundational
guidelines or evidence base used in determining the appropriate quantum of fees
for different matters in the courts. While the Department has articulated some
of the main policy principles informing the recent increases in fees, the
committee considers that there is a disconnect between these broad principles
and any more meaningful rationale for specific fee increases.
4.11
The committee also notes that there is little information available to
help inform policy in this area. Departmental representatives indicated that
the headline figure of overall court filing levels can provide some evidence of
whether or not fees are having an impact on litigants' use of the courts. The
utility of even this data, however, is limited. While overall filing figures
may provide a broad indication of activity levels in the courts, it is
difficult to draw definitive conclusions from this headline figure on the
impact of particular policy settings including court fees. That is because the
figures do not elucidate the reasons why disputants decide whether or not to
bring a matter before the courts. If more appropriate conclusions are to be
drawn regarding the impact of court fees on the behaviour of disputants, more
comprehensive quantitative and qualitative data is required. The committee
considers that this is essential to help inform the development of future
policy settings in relation to federal court fees.
4.12
The committee is therefore recommending that evidence-based research be
undertaken into how court fees affect court users' behaviour, in order to
inform policy development for any future changes in court fee settings. The
committee notes that the Department is currently coordinating a long-term
working group project in order to develop a framework to guide the collection
of consistent data to create an evidence base for the civil justice system in
Australia.[3]
Without wishing to be prescriptive, the committee considers that this working
group may be able to provide input into the development of an evidence base for
setting federal court fees.
Consultation with the legal
profession
4.13
The committee also notes concerns raised by submitters and witnesses to
the inquiry that the most recent fee changes, introduced in January 2013, were
largely implemented without taking the views of significant stakeholder into
account.
4.14
The committee considers that final decisions regarding the setting of
court fees are a matter for the government of the day, as part of the
government's budget processes. It is appropriate for the government to make
these decisions in this way, and the confidentiality of the budget process must
be understood in that context.
4.15
Having said this, the committee agrees that the decision-making process
of government would be assisted by stakeholders proactively putting forward
their views in relation to federal court fees. Stakeholders from the legal
profession should also be encouraged to put forward suggestions on reducing the
overall cost to individuals who need to access the courts, including in
relation to the issue of legal fees. The committee is therefore
recommending that stakeholders be given adequate opportunity to present their
views on court fees policy, prior to future changes in federal court fee
settings.
Recommendation 1
4.16
The committee recommends that the Australian Government commission or
undertake research to develop quantitative data and qualitative evidence on the
effect of federal court fee settings on the behaviour of disputants and on
broader access to justice issues, in order to better inform policy development
in this area.
Recommendation 2
4.17
The committee recommends that, prior to any future changes to federal
court fee settings, and keeping in mind that budgetary decisions are ultimately
a matter for government, relevant stakeholders from the courts and the legal profession
should be given adequate opportunity to present their views on these matters to
the Australian Government. These stakeholders should include:
- the High Court of Australia, the Federal Court of Australia, the Federal
Circuit Court of Australia, and the Family Court of Australia;
- the Law Council of Australia;
- National Legal Aid;
- National Association of Community Legal Centres;
- representatives from the pro bono legal sector in Australia; and
- other relevant legal experts.
Application of fee revenue
4.18
Some submitters and witnesses criticised the fact that revenue from
federal court fees is returned to consolidated government revenue. The
committee notes the Department's evidence that while it is convenient to
consider court fees in terms of notional cost recovery levels (that is, the
proportion that court users pay in fees as a percentage of the cost of the
courts), the courts are not run on a direct cost recovery basis where revenue
raised is returned directly to the courts.[4]
The federal courts are funded through the federal Budget and, as such, the
committee considers that it is appropriate for revenue from federal court fees
to be returned to consolidated revenue. On principle, any revenue stream to
government from agencies that collect fees should be available to fund wider budget
priorities.
4.19
Some submitters and witnesses suggested that court fee revenue should be
directly tied to court services or other legal services. These suggestions fail
to recognise that revenue from fees would not be sufficient to fund the courts,
or the government's other expenditure on legal services. Tying fee revenue
entirely to the provision of court services could also risk a reduction in
services if fee revenue falls in the future.
4.20
The committee considers that it is appropriate for the government of the
day to determine the resourcing necessary for the efficient operation of the
federal courts, with regard to the needs of the courts and the overall budgetary
position of government. The allocation of $38 million in additional funding to
the federal courts over four years will help maintain the delivery of key
services, including the regional circuit work of the courts.
Reinstatement of fee exemptions and waivers
4.21
The committee commends the reintroduction, in January 2013, of a
comprehensive regime of fee exemptions and waivers. These exemptions ensure
that at least some disadvantaged litigants are not prevented from accessing
redress through the courts. Submitters and witnesses universally agreed that
this system of exemptions and waivers is preferable to the regime of flat fees which
operated between November 2010 and December 2012.
4.22
The committee notes the Department's evidence that, in addition to the
fee exemptions regime, federal courts retain flexibility in the way they treat
fees, including by:
- retaining the power of the court to defer payment of fees in
cases of urgency or where it is warranted as a result of the person's financial
circumstances;
- exercising discretion to file and/or hear a matter where a fee
has not been paid (despite the general rule that matters should not be filed or
heard if the fee is unpaid); and
- retaining the courts' powers of apportionment to direct who is
liable to pay court fees, including splitting fees between parties.[5]
4.23
The committee considers that these measures will go some way to
improving access to justice for low-income individuals seeking to access the
courts.
Threshold for financial hardship
exemptions
4.24
The committee heard that a significant proportion of individuals and
families will be unable to pay court filing fees, but will not qualify for a
financial hardship exemption under the current criteria used by the courts.
4.25
The committee notes that the fee regulations do not specify the
threshold for qualifying for a financial hardship exemption, but that the
Family Court and the Federal Circuit Court have issued Guidelines for
exemption of court fees specifying the level at which such exemptions will
generally be granted.
4.26
The committee has reached the view that these guidelines may need
revising in order to ensure that low to middle-income individuals are not
priced out of the court system. The committee considers that it is unreasonable
that court fees could push a person 'to the edge of financial hardship'[6]
without an exemption being accessible.
Recommendation 3
4.27
The committee recommends that the qualifying threshold for financial
hardship exemptions under the Guidelines for exemption of court fees be
reviewed. If necessary, the guidelines should be amended in order to ensure
that the threshold for financial hardship exemptions does not inhibit the
ability of individuals to access redress through the courts.
Access to exemptions for clients of
Community Legal Centres
4.28
The committee has heard evidence on several points in relation to fee
exemptions for clients of Community Legal Centres (CLCs). The committee has
received anecdotal evidence that some clients of CLCs who should be entitled to
a fee exemption have found it difficult to access the exemption, because of ambiguity
surrounding whether CLC clients are covered under the definition of 'legal aid'
on the exemption application form used by the Federal Court and the Federal
Circuit Court.[7]
The committee considers that the courts should review these application documents
to ensure that CLC clients are not inadvertently excluded from fee exemptions.
4.29
Secondly, the committee heard that not all CLCs that should be eligible
for fee exemptions are prescribed under the relevant legislative instrument,
the Legal Aid Schemes and Services Approval 2013.[8]
The committee considers that it would be prudent for the Australian Government
to review this instrument to ensure that all eligible legal aid providers are
appropriately recognised as such.
Recommendation 4
4.30
The committee recommends that consideration be given to appropriately
amending the application form for exemption from paying court fees used in the
Federal Court of Australia and the Federal Circuit Court of Australia, to
remove any ambiguity concerning the ability of clients of Community Legal
Centres prescribed under the Legal Aid Schemes and Services Approval 2013 to
access a fee exemption.
Recommendation 5
4.31
The committee recommends that the Australian Government undertake a
review of the schemes and services listed in the Legal Aid Schemes and Services
Approval 2013, and update the Approval as necessary, to ensure that all
eligible legal aid providers are appropriately listed under the Approval.
Other proposed changes to the fee
exemption regime
4.32
The committee notes that one proposal suggested by submitters, in
relation to exempting Independent Children's Lawyers (ICLs) from court fees
incurred in the performance of work on behalf of legal assistance providers,
has already been addressed by the government as part of the 2013-14 Budget.[9]
Some submitters and witnesses to the inquiry argued for additional categories
of individuals to be added to the fee exemptions regime, however the committee
does not consider that there is a clear policy justification for these changes
at the present time.
Senator Trish
Crossin
Deputy Chair |
Senator Gary
Humphries |
| |
|
| Senator Mark Furner |
Senator
Sue Boyce |
| |
|
| Senator Michaelia Cash |
Senator
Louise Pratt |
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