Dialogue: Surge in court fees puts access to justice at risk

Court fees have been increased so much that they are now an impediment to fairness in civil actions, writes CHRIS DARLOW*.

Until recently many law firms did not insist on clients paying up front for the fees charged by the court when they filed applications on their behalf. The amount was comparatively small and it was a cost they were happy to carry.

That all changed when the Government introduced a new schedule of court fees with increases so huge that firms had no option but to ensure these costs were advanced by the unfortunate clients.

The fees are now a real deterrent for some people and businesses seeking justice in a civil action.

In some cases there is no choice, though. Consider, for instance, the dilemma of a plumber, trading through his family-owned company, who has a dispute over a $2000 bill from a merchant who has supplied him with unsatisfactory hardware.

The merchant serves a statutory notice on the plumber to pay up and he then has 10 working days to apply to the court for the disputed debt to be set aside.

The cost to the plumber? Since October 1, the court filing fee has been $900. Before the new schedule was introduced it was $120.

Another example: a company in its dying stages makes a $20,000 payment to the plumber for work done just before it goes into liquidation.

The liquidator decides that the plumber has been given unreasonable preference over others to whom the company also owes money, so he serves a "voidable preference" notice on him.

Again, the unfortunate plumber has to stump up a $900 filing fee to have the opportunity to protect himself in court.

The new schedule has actually decreased the fees payable to lodge small claims in disputes tribunals, but enormous increases at District Court, High Court and Court of Appeal levels have been across the board, hitting private individuals and small companies severely.

And this came about in spite of the fact that the Minister for Courts, Matt Robson, said the initial thinking behind the increases was to ensure that the taxpayer did not subsidise giant corporations.

In the District Court, for example, the cost of filing applications for most fixtures has escalated from $145 to $450.

To set down proceedings for hearing in the High Court now costs $2200 - it was $650 - and the hearing fee for each half-day after the first day has jumped from $270 to $1100.

The cost of filing applications in the Court of Appeal went up from $155 to $900.

When the new fees were announced the Herald pointed out in an editorial that one of the most fundamental civil rights was access to justice, and that while civil legal aid helped people with few assets, for many others the cost of litigation created hardship. "It is difficult, therefore, to see why the Minister for Courts, Matt Robson, has promulgated rises in court fees that are nothing short of astronomical," the editorial said.

The new fees were to have been introduced on July 1, but after strong objections were raised by the legal profession and others, implementation was deferred until October 1. In the meantime the Government set up a working party to "look at any anomalies that remain".

The working party, however, achieved virtually nothing. Its recommendations have not been made public, but whatever they may have been the only response from the Government was to make a few very minor amendments to the fees schedule.

When the revised schedule was announced, angry lawyers attending a special forum at the Auckland District Law Society passed a resolution opposing the proposed increases because of:

* The absence of any consultation over the level of fees proposed or their likely impact on litigants.

* The fact that the proposed increases were of such dramatic proportions that important constitutional questions were raised, in particular the likelihood that the new fees would harm the right of New Zealanders to obtain access to their courts.

* The fact that the fee increases were excessive and inappropriately selective.

An Auckland District Law Society submission to the working party proved equally ineffectual in changing the Government's rigid posture.

The society's views spelled out in that submission, reinforced by the unfair and unreasonable costs the new schedule has imposed upon court users since October 1, were and are that no convincing arguments have been produced to support the huge increase in fees.

Data made available by the Department for Courts does not establish the real cost of administering the civil jurisdiction of the courts. The overriding principle should be the maintenance of a court system which is readily accessible by all citizens. A substantial taxpayer subsidisation of the civil litigation court is necessary. Without it, gross unfairness results.

But it is not appropriate to try to recover any particular percentage of costs from users of the system. Rather, fees should be appropriately geared to the type of litigation involved and the amount at stake.

* Chris Darlow is the president of the Auckland District Law Society.