The soon to be implemented probate fee increase has been met with further criticism.
Originally announced in March, the proposals suggested that probate fees would be paid in correspondence with the size of the estate; starting at £300, they could stretch to £20,000 for estates valued at £2 million or more. Only estates valued under £50,000 would not face any charges.
Despite criticism, the Ministry of Justice subsequently confirmed that the suggestions would go ahead, with the extra money raised – an estimated £250 million – to go towards funding the courts and tribunal service.
Last week, however, the fee increases were subject to even further scrutiny – this time from the joint committee on statutory instruments. They argued that by introducing fees that bear the hallmarks of an estate tax, the Lord Chancellor would be stepping outside of her powers. They expressed doubt as to whether she was able to ‘prescribe non-contentious probate fees for the purpose of funding services which executors do not seek to use.’
They went on to state that the charges are disproportionate to the probate registry services.
In spite of the criticism, the Lord Chancellor has stated that she has no intention of amending the scheduled increases, with a Ministry of Justice spokesperson stating that after being considered in Parliament, the changes will “come into force as soon as possible”.
Sharing her opinion on the probate changes was Cheryl Jones. The experienced Chancery barrister has dealt with multiple contentious probate matters, being involved in well-known cases including re Kramer (High Court) (2016) and re Castrillon (High Court) (2016).
As well as highlighting the powers of the Lord Chancellor, the 3PB Barrister also commented on the chances of the proposals actually being implemented.
“The recent proposed changes to Probate charges is the latest storm to affect the Lord Chancellor.
There is no doubt, under s92 Courts Act 2003, she has the power to set fees for the Courts. Equally, under the niftily named Anti-Social Behaviour, Crime and Policing Act 2014 s180 she has the power to set fees in a specific court which exceed the costs of that court. In other words, she can make a profit in one area of the court service provided that the fee so raised is used to finance the efficient and effective use of the court system.
Before setting fees, she has to consult with a number of senior judges [s92(5) Courts Act 2003] although she is not bound by their views even if, as in this instance, there is virtual unanimity that it is a bad idea. If the Lord Chancellor is seeking to make a profit she must lay the statutory instrument before both Houses and obtain approval [Anti-Social Behaviour etc Act 2014 s180(7)].
And so we come to Non-Contentious Probate fees. These are charged for a grant of Probate, which requires very little by way of administrative effort. There is presently a flat fee of £155/£215 irrespective of the value of the estate (with exceptions for very low-value estates) as value does not affect administrative action. The fees currently raised cover the costs of running the Probate Registry (about £45 million). The fees proposed by the Lord Chancellor are geared to the value of the estate, starting with £300 for estates over £50,000 and then increasing in steps to an eye-watering £20,000 for any estate over £2,000,000.
There are two real difficulties arising for the Lord Chancellor. Firstly, the fees are for non-contentious work and the clue is in the name. It is frankly doubtful whether the Probate Registry falls into the definition set out in the Courts Act 2003 s92(1). It has no courts or judges. The Lord Chancellor may not have the power at all to increase the fees beyond those needed to run the Probate Registry.
There is a second problem, which arises from the pinning of the increases to the value of the estate and the compulsory requirement to obtain probate. Fees for the Courts and Tribunals are, at least in theory, voluntary. To charge a compulsory fee which outstrips the actual cost by a factor of between 39.5% at the lower end and over 12,100% at the top end, with an overall profit estimated at £300 million, may well amount to taxation, rather than an exercise of the limited powers conferred on the Lord Chancellor. Even if that is wrong and there is a power, this is clearly an excessive usage.
These difficulties pointed out by almost every organisation and individual “consulted” by the Lord Chancellor, have been picked up by the Joint Committee on Statutory Instruments which has declared itself doubtful about there being any power – and has also reported it as an “unexpected use” if the power does exist.
The Lord Chancellor has stated her intention to plough on. The MOJ, under a different Lord Chancellor, exhibited the same attitude in the past – resulting in an unprecedented number of judicial reviews and declarations that the Lord Chancellor was acting unlawfully. If this scheme is pushed through both Houses, the Lord Chancellor will undoubtedly be subject to yet another challenge with what appears to be a rather good chance of success.”
