MoJ in special measures on charges?

Businesman blows whistle and shows red card
STEP was one of the bodies most actively engaged in the furore that developed around the Ministry of Justice’s (MoJ) proposal to raise probate fees for some estates from £155/215 to as much as £20,000.

One of the things that enraged many STEP members was not just the scale of the increase, but the fact that overwhelming criticism in response to the consultation on the proposals had been entirely disregarded. Moreover, the mechanism by which the MoJ were looking to introduce the new fee – via a Statutory Instrument with minimal Parliamentary scrutiny – appeared to be a clear abuse of process; a view confirmed by a legal opinion commissioned by STEP.

In the end, the increase in probate fees appears to have been shelved, at least for the time being. It has recently emerged, however, that it is not just probate fees that have been getting the MoJ into a spot of hot water. Fees for Powers of Attorney were also raised to levels that more than covered costs, but the MoJ had again failed to follow the procedures needed in these circumstances. Fees for Powers of Attorney have since, with effect from 1 April 2017, been reduced, and the Office of the Public Guardian is looking at ways to refund those who have paid too much. (See Justice ministry to repay GBP89 million of powers of attorney overcharges.)

Even more intriguingly, the MoJ, in its Annual Report, has let slip that it is ‘undertaking a review of lessons learnt [from the Powers of Attorney fees issue] which has led to the creation of a new income strategy unit which will oversee the standards and controls set for all income streams.’

The Report goes on to say: ‘There have also been a number of improvements to the way in which we forecast and monitor fees to ensure compliance with requirements set by HM Treasury.’

Stripping through the civil service code, this sounds like there has been fairly sharp exchange of views between HM Treasury and the MoJ over fees that begin to look like taxes, with Treasury no doubt highlighting that there are supposed to be rules and procedures when it comes to this sort of thing.

The funding gap left by the failure to get the probate fee increase through before the election still needs to be addressed. How the MoJ will eventually fill that gap remains to be seen. It sounds, however, like we can at least expect the MoJ to pay a bit more attention to due process when this issue next comes up than it was minded to earlier this year.

George Hodgson is Chief Executive of STEP

Probate fees – will common sense prevail?

George HodgsonThe government’s threat to radically increase probate fees next month (Probate fee rise ‘a new tax on bereaved families’) may be receding, following a meeting of the House of Commons Joint Committee on Statutory Instruments on 29 March.

Using some very welcome common sense, the committee raises the issue (para 1.12) that it is a constitutional principle that there should be ‘no taxation without the consent of Parliament’. This is something I suspect 99% of people will agree with.

It finds that the proposal from the Ministry of Justice (MoJ) is clearly a tax, not a fee, in every normal definition of the term, and should therefore be subject to full parliamentary scrutiny, rather than brought in via the back door through a Statutory Instrument.

The committee also finds (para 1.13) that ‘charges’ of the magnitude proposed by the MoJ were probably never envisaged when the original legislation the government was attempting to use here was approved. In other words, using this process is an abuse.

We would hope that this will provide an opportunity for the government to re-think its approach, which was criticised by over 90% of those responding to the consultation, and submit re-worked proposals for proper scrutiny by Parliament.

• Joint Committee on Statutory Instruments: Non-Contentious Probate Fees Order 2017

 

George Hodgson is Chief Executive of STEP