Court of Protection, Civil Proceedings and Magistrates Courts Fees (Amendment) Order 2018
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1 HOUSE OF LORDS Secondary Legislation Scrutiny Committee 36th Report of Session Court of Protection, Civil Proceedings and Magistrates Courts Fees (Amendment) Order 2018 Includes 6 Information Paragraphs on 6 Instruments Ordered to be printed 17 July 2018 and published 19 July 2018 Published by the Authority of the House of Lords HL Paper 173
2 Secondary Legislation Scrutiny Committee The Committee was established on 17 December 2003 as the Merits of Statutory Instruments Committee. It was renamed in 2012 to reflect the widening of its responsibilities to include the scrutiny of Orders laid under the Public Bodies Act The Committee s terms of reference are set out in full on the website but are, broadly, to scrutinise (a) every instrument (whether or not a statutory instrument), or draft of an instrument, which is laid before each House of Parliament and upon which proceedings may be, or might have been, taken in either House of Parliament under an Act of Parliament; (b) every proposal which is in the form of a draft of such an instrument and is laid before each House of Parliament under an Act of Parliament, with a view to determining whether or not the special attention of the House should be drawn to it on any of these specified grounds: (a) that it is politically or legally important or gives rise to issues of public policy likely to be of interest to the House; (b) that it may be inappropriate in view of changed circumstances since the enactment of the parent Act; (c) that it may inappropriately implement European Union legislation; (d) that it may imperfectly achieve its policy objectives; (e) that the explanatory material laid in support provides insufficient information to gain a clear understanding about the instrument s policy objective and intended implementation; (f) that there appear to be inadequacies in the consultation process which relates to the instrument; (g) that the instrument appears to deal inappropriately with deficiencies in retained EU law The Committee may also consider such other general matters relating to the effective scrutiny of secondary legislation as the Committee considers appropriate, except matters within the orders of reference of the Joint Committee on Statutory Instruments. Members Lord Chartres Lord Goddard of Stockport Baroness O Loan Rt Hon. Lord Cunningham of Felling Lord Haskel Lord Sherbourne of Didsbury Lord Faulkner of Worcester Rt Hon. Lord Janvrin Rt Hon. Lord Trefgarne (Chairman) Baroness Finn Lord Kirkwood of Kirkhope Registered interests Information about interests of Committee Members can be found in the last Appendix to this report. Publications The Committee s Reports are published on the internet at seclegpublications The National Archives publish statutory instruments with a plain English explanatory memorandum on the internet at Information and Contacts Any query about the Committee or its work, or opinions on any new item of secondary legislation, should be directed to the Clerk to the Secondary Legislation Scrutiny Committee, Legislation Office, House of Lords, London SW1A 0PW. The telephone number is and the address is hlseclegscrutiny@parliament.uk.
3 Thirty Sixth Report INSTRUMENTS DRAWN TO THE SPECIAL ATTENTION OF THE HOUSE Court of Protection, Civil Proceedings and Magistrates Courts Fees (Amendment) Order 2018 (SI 2018/812) Date laid: 4 July 2018 Parliamentary procedure: negative Summary: This instrument reduces a number of fees for court services to a level that more accurately reflects the cost of the service being provided. Most of the fees being amended were last altered in 2014 but some date back to The changes are expected to reduce Her Majesty s Court and Tribunal Service s (HMCTS) fee income by around 9 million per annum. As well as promising more frequent reviews of HMCTS s fee structure, the Ministry of Justice (MoJ) states its intention to set up a refund scheme, but the debts owed may involve small amounts to a large number of individuals with a risk that an entirely disproportionate level of administration will be required to set the matter right. The House may wish to enquire what the MoJ s proposals are for handling the refunds effectively. This Order is drawn to the special attention of the House on the ground that it gives rise to issues of public policy likely to be of interest to the House. 1. This instrument reduces a number of fees for court services to a level that more accurately reflects the cost of the service being provided. Most of the fees being amended were last altered in 2014 at which time the Ministry of Justice (MoJ) believed that they were set at or below full cost recovery levels. The Court of Protection fees were set in 2007 on the basis that they were then below the full cost of those proceedings; that is no longer the case. The changes made by the current Order to set fees at full cost recovery levels are expected to reduce Her Majesty s Court and Tribunal Service s fee income by around 9 million per annum. 2. The MoJ helpfully includes an Annex to the EM which compares the old and new fees being changed, but this should be read in conjunction with the Annex to the Impact Assessment (IA) to get a true picture of the issue. For example, the IA states that the current fee for an Appeal under the Licensing Act 2003 is 410 and the estimated actual unit cost is 70, giving a cost recovery rate of 686%, but there are not a large number of cases. The most significant source of overpayment has been Council Tax Liability Orders for which the fee is currently 3 but the unit cost is 50p; these are however high frequency items and are responsible for 7.9 million of the 9 million overcharged. 3. In the EM the MoJ says that the Government will be establishing a refund scheme for those who have been overcharged and full details will be announced in due course. The administration of the refund scheme is likely to be complex since, as well as including just under 30,000 applications for proceedings in the Court of Protection overcharged at 15 a time, it involves millions of proceedings brought by local authorities against local
4 2 SECONDARY LEGISLATION SCRUTINY COMMITTEE council taxpayers who were in arrears on their council tax, which had been overcharged at 2.50 a time. In respect of the latter, paragraph 10.2 of the EM states that it is understood that local authorities added the fee to the individuals arrears of council tax and the overall impact on local authorities is therefore expected to be minimal. This appears to miss the point that the debt owed will be to the individual and there is a risk that an entirely disproportionate amount of administration will be required to set the matter right. The House may wish to enquire what the MoJ s proposals are for handling the refunds effectively. Conclusion 4. There will, of course, be immediate benefit to local authorities and others from the reduction of fees but the current situation should not have been allowed to arise. We have seen a number of statutory instruments changing the application process for all kinds of services from hard copy to electronic submission and in most cases this significantly reduces processing time and therefore costs. We note that the MoJ states its intention to put in place arrangements to review fees more regularly against cost, and we hope that such reviews will encompass all the fees that the MoJ charges and ensure that they reflect the benefits of increased use of electronic communication.
5 SECONDARY LEGISLATION SCRUTINY COMMITTEE 3 INSTRUMENTS OF INTEREST Draft Business Contract Terms (Assignment of Receivables) Regulations These draft Regulations aim to facilitate access to invoice finance for businesses, by nullifying terms in business contracts which prohibit or restrict the assignment of receivables. The assignment of receivables (that is, invoices and other rights to be paid money under a contract) is a mechanism which enables businesses to raise finance based on money owed to them. Under this mechanism, businesses assign their right to future payment to a finance provider in exchange for funds. The Department for Business, Energy and Industrial Strategy (BEIS) explains that while this type of finance is particularly valuable in sectors where businesses have to wait a long time between issuing an invoice and receiving payment, many commercial contracts routinely contain provisions that prohibit it. According to BEIS, the draft Regulations would ensure that such provisions have no effect, enabling more businesses to access invoice finance. BEIS says that an earlier version of the Regulations was laid in and subsequently withdrawn after the legal profession raised concerns, in particular about their potential impact on the use of English law for large international contracts. BEIS explains that the new draft Regulations address these concerns by exempting a number of contracts, including those where the supplier is a large enterprise or where none of the parties carry out business in the UK. 6. We have received a submission from a member of the public that expresses concerns about the current draft Regulations, including the fact that the Impact Assessment (IA) that has been laid alongside the Regulations was not revised following the decision to exempt large enterprises from the Regulations. We have put these concerns to BEIS and are publishing the Department s response on our website. 2 Draft Immigration (Provision of Physical Data) (Amendment) (EU Exit) Regulations This statutory instrument is the first to be badged with EU Exit in its title. It is understood that the Government mean to include EU Exit in the title of all regulations intended to implement the UK s withdrawal from the European Union, whether or not the instrument is made under the EU (Withdrawal) Act Appendix EU to the Immigration Rules will provide a basis on which resident EU citizens and their family members, and the family members of certain British citizens, can apply for leave to remain in the UK beyond the end of the planned post-exit implementation period on 31 December The Home Office states that the proposal is consistent with Articles 17 and 17a of the draft Withdrawal Agreement. Where a person chooses to apply for leave to remain under Appendix EU, the changes made by these Regulations provide for their biometric information (that is, fingerprints and a facial 1 The Committee considered the 2017 draft regulations in its 6th Report of Session (HL Paper 23). 2 See [accessed 18 July 2018]. 3 A draft of Appendix EU was published on 21 June 2018 as part of a Statement of Intent on the EU Settlement Scheme attachment_data/file/718237/eu_settlement_scheme_soi_june_2018.pdf [accessed 18 July 2018].
6 4 SECONDARY LEGISLATION SCRUTINY COMMITTEE photograph) to be enrolled and retained as part of the UK s intended EU Settlement Scheme. Fingerprints will normally be retained for 10 years and facial photographs until the person obtains a British passport. The Home Office states that these requirements align with existing provisions for visas and residence permits. Wildlife Licence Charges (England) Order 2018 (SI 2018/771) 9. This instrument introduces a charging scheme for licences that Natural England issues on behalf of the Department for Environment, Food and Rural Affairs (Defra) for work that may affect wildlife and its habitat. According to Defra, the licensing service balances the protection of certain protected species, for example bats or barn owls, with wider societal needs, such as land development, public health or heritage conservation, allowing licence-holders to undertake work which would otherwise be illegal. To date, the licensing service has been free to use, but, in line with wider Government policy of recovering the costs of public services, this instrument introduces user charges aimed at cost recovery. The Explanatory Memorandum (EM) states that Defra expects to charge for around 8,400 licences annually at a cost of 1.3 million to applicants. The Order sets out individual charges ranging from 35 to The Explanatory Memorandum (EM) sets out the expected impact of the new charging scheme. Defra says that it will invest a significant proportion of the revenue from the new charges into service improvements, and that it expects a reduction in the number of licences that are issued late, leading to a financial net benefit to applicants. We found, however, that two different figures were used in the EM in relation to this expected benefit, and that an estimate for an anticipated net saving for taxpayers lacked context. We have sought clarification of these figures from Defra and the Department has replaced the EM, so that a clear picture of the expected impact of the new licensing scheme is publicly available. We are publishing our correspondence with Defra at Appendix 1. Airports (Noise-Related Operating Restrictions) (England and Wales) Regulations 2018 (SI 2018/785) 11. EU Regulation No 598/2014 establishes the rules and procedures for the introduction of noise-related operating restrictions at airports with more than 50,000 civil aircraft movements per year. These Regulations, laid by the Department for Transport, provide for the relevant local planning authority to be the competent authority for any planning matter requiring compliance with the Balanced Approach. 4 The local authority will also be the competent authority for monitoring compliance with any operating restrictions imposed as part of the development consent. The Regulations identify the Secretary of State as the competent authority for strategically important development consent applications, including the proposed third runway at Heathrow, and for any planning application appeals. Welsh Ministers will perform the same functions in Wales. 4 A four-strand practice promoted by the International Civil Aviation Organisation which aims to reduce noise from airports by reducing noise at source, land-use planning, operational noise abatement and operating restrictions. [accessed 18 July 2018].
7 SECONDARY LEGISLATION SCRUTINY COMMITTEE 5 Childcare (Disqualification) and Childcare (Early Years Provision Free of Charge) (Extended Entitlement) (Amendment) Regulations 2018 (SI 2018/794) 12. On 2 July, Lord Agnew of Oulton repeated a written ministerial statement, Childcare Update, 5 which referred to the laying of these Regulations and the two changes made by them. The first is to remove disqualification by association - meaning that an individual can be disqualified from working in childcare because of an offence committed by someone who lives or works in their household - in non-domestic childcare provision (including schools, nurseries and other registered non-domestic settings). Disqualification by association arrangements will remain in place in domestic settings. The second change is to extend eligibility for 30 hours free childcare to threeand four-year-old children in foster care, provided that the foster parents meet the eligibility criteria. 13. In the Explanatory Memorandum, the Department for Education (DfE) says that it consulted on reforming disqualification by association in the summer of It received around 450 responses, almost 60% of which favoured removing such disqualification in non-domestic settings. When it launched its consultation, DfE said that its response would be published in summer 2016; in fact, the response appeared only in July Asked about this delay, DfE has told us that there was meaningful support for the alternatives [to removing disqualification by association] put forward in the consultation document. Given the consultation yielded this response, we undertook further extensive deliberations with a range of safeguarding professionals and others in the school and early years sectors, to satisfy ourselves that the perceived risk associated with removing by association could be mitigated in all of the relevant settings. As you will recall, post May 2016 there were significant changes within Government and the ministers considering the consultation response were different to those who agreed the consultation. Immigration (European Economic Area) (Amendment) Regulations 2018 (SI 2018/801) 14. These Regulations update the UK s application of the European Union Free Movement Directive to take account of several recent decisions in the European courts. Several of the cases turned on the derived right of residence of a third country national living with a EU citizen or a British citizen exercising their right of free movement in another country. The Regulations also allow EEA family permits under the 2016 Regulations 7 to be issued in an electronic form as an alternative to a hard-copy form. This is to facilitate future modernisation of operational practices as the Home Office states that it is often quicker, more secure, and more cost effective to issue permits electronically. 5 HLWS788, 2 July 2018 [Lords Written Statement]. 6 See Department for Education, Consultation outcome: Childcare workers: changes to disqualification arrangements: [accessed 18 July 2018]. 7 Immigration (European Economic Area) (Amendment) Regulations 2016 (SI 2016/1052) as amended.
8 6 SECONDARY LEGISLATION SCRUTINY COMMITTEE INSTRUMENTS NOT DRAWN TO THE SPECIAL ATTENTION OF THE HOUSE Draft instruments subject to affirmative approval Business Contract Terms (Assignment of Receivables) Regulations 2018 Higher Education (Fee Limits and Fee Limit Condition) (England) Regulations 2018 Immigration (Provision of Physical Data) (Amendment) (EU Exit) Regulations 2018 Instruments subject to annulment Cm 9657 Cm 9658 UK/Kuwait: Extradition Treaty UK/Kuwait: Treaty on Mutual Legal Assistance in Criminal Matters SI 2018/771 Wildlife Licence Charges (England) Order 2018 SI 2018/780 Transfer of Functions (Parliamentary Constituencies Act 1986) Order 2018 SI 2018/781 Scottish Administration (Offices) Order 2018 SI 2018/784 SI 2018/785 SI 2018/786 SI 2018/794 SI 2018/795 SI 2018/801 SI 2018/803 Motor Vehicles (Driving Licences) (Amendment) Regulations 2018 Airports (Noise-related Operating Restrictions) (England and Wales) Regulations 2018 Financial Services and Markets Act 2000 (Prospectus and Markets in Financial Instruments) Regulations 2018 Childcare (Disqualification) and Childcare (Early Years Provision Free of Charge) (Extended Entitlement) (Amendment) Regulations 2018 Public Interest Disclosure (Prescribed Persons) (Amendment) Order 2018 Immigration (European Economic Area) (Amendment) Regulations 2018 Civil Legal Aid (Procedure, Remuneration and Statutory Charge) (Amendment) Regulations 2018 SI 2018/810 Education (Student Loans) (Repayment) (Amendment) (No. 3) Regulations 2018
9 SECONDARY LEGISLATION SCRUTINY COMMITTEE 7 Appendix 1: WILDLIFE LICENCE CHARGES (ENGLAND) ORDER 2018 (SI 2018/771) Additional information from the Department for Environment, Food and Rural Affairs Q1: Paragraph 7.3 of the EM states that applicants will pay an estimated 1.3 million per year for licences as a result of the changes. It then goes on to say that the money will be reinvested for service improvements which are expected to lead to savings for applicants of 0.5 million per year, largely in the form of a reduction in the number of delayed licences. Paragraph 10.1 then says that business will be saving 0.4 million per year because of service improvements and while the new charges are mentioned, the expected total cost to applicants of 1.3 million (see paragraph 7.3) is not mentioned here. Are the expected savings to applicants 0.5 million (paragraph 7.3) or 0.4 million (paragraph 10.1)? If businesses pay charges of 1.3 million while also saving 0.4 million or 0.5 million through better service this leaves a net cost of 0.9 million or 0.8 million. So the expected financial cost to business is bigger than the expected savings, but only the savings are mentioned. Should the expected net cost not be mentioned here? A1: The estimated gross saving to applicants as a result of reduced delay cost is 1.8 million per annum. This has then been set against an increase in cost to applicants (as result of fees) of 1.3 million, to give an estimated net saving to applicants of the order of 0.5 million per annum. The figure quoted in paragraph 10.1 is derived from a more detailed analysis of the impact on business sector applicants specifically (following the same approach) which showed an estimated net saving of 0.4 million per annum. The difference between this and the figure quoted in paragraph 7.3 is partly down to rounding and partly due to the inclusion in the more detailed analysis of a small allowance for increased costs to business applicants in processing payment of a licence fee. Q2: Para 10.3 states that the savings to taxpayers will be 0.4m per year. How is the 0.4m taxpayer savings figure calculated? How does the figure relate to the 1.3 million in revenue for the taxpayer from the new charges? A2: Of the total income from charges of 1.3 million, we estimate that we will need to invest an additional 0.9 million in the improved delivery of the service, leaving a net saving in taxpayer funding of 0.4 million. 9 July 2018
10 8 SECONDARY LEGISLATION SCRUTINY COMMITTEE Appendix 2: INTERESTS AND ATTENDANCE Committee Members registered interests may be examined in the online Register of Lords Interests at The Register may also be inspected in the Parliamentary Archives. For the business taken at the meeting on 17 July 2018, Members declared the following interests: Financial Services and Markets Act 2000 (Prospectus and Markets in Financial Instruments) Regulations 2018 (SI 2018/786) Lord Janvrin Senior Adviser, HSBC Private Bank (UK) Ltd Attendance: The meeting was attended by Lord Chartres, Lord Cunningham of Felling, Lord Faulkner of Worcester, Lord Goddard of Stockport, Lord Haskel, Lord Janvrin, Lord Kirkwood of Kirkhope, Lord Sherbourne of Didsbury and Lord Trefgarne.
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