La fuente del orden social

Courts and tribunals are state sponsored mechanisms for dispute resolution and the enforcement of rights—a fundamental element for the maintenance of the rule of law. These mechanisms also provide significant benefits to the Australian community. however, the specific functions of a court in any particular matter are performed at the request of the parties who have the immediate and almost exclusive interest in the conduct and outcome of the litigation.

While the existence of courts and other justice services has public benefits that clearly deserve public funding, it remains legitimate to explore the extent to which specific activities in particular matters, which are of more limited interest to the parties, might be appropriate subjects of assessing cost recovery.

Specific Recommendations about cost recovery are contained in Chapter 9.

135 _{Data provided by lACs.}

A snapshot of the present

All the federal courts charge a fee for some or all applicants. While the fees vary between courts and jurisdictions, the collection of fees falls well short of full cost recovery. In 2007–08, fees paid in the Federal Court of Australia amounted to only 9.3 per cent of the Government’s expenditure on the Court. The figure for the FmC is 22.4 per cent, while the Family Court, where fewer fees are charged, recovers only 0.9 per cent.137 _{Fees are subject to exemption and waiver provisions, which apply to}

those in receipt of legal aid or income support payments and others who would suffer financial hardship if they had to pay fees.

In 2007–08, around $58m was returned to consolidated revenue from fees and charges that could be described as justice related (including tribunals, courts and the Insolvency & Trustee Service Australia (ITSA)). Around half of fees returned came from ITSA which operates on a cost recovery basis, and the remainder from courts and tribunals. Fees returned by the FmC, the Federal Court and Family Court amounted to $16.89m, $7.13m and $1.24m respectively (see Figure 3.5).

Figure 3.5: Cost Recovery by Commonwealth Courts 2007–08138

The higher rate of cost recovery in the FmC than in the superior courts arises from the fact that, while the fees are lower in the FmC, the matters are also simpler and quicker, leading to a greater proportion of costs being recovered.

Australian federal courts and tribunals have set fee structures for filing fees. The Federal Court and high Court also charge daily hearing fees. This daily rate is independent of the length of the hearing. In its report Managing Justice, the AlRC recommended that the Commonwealth consider the introduction of staged fees, where the fees increased along a sliding scale as case progresses to hearing. The AlRC considered that this would provide an incentive for litigants to settle matters at an earlier stage.

137 _{Productivity Commission, Report on Government Services, 2009.}

138 _{Federal Court, Family Court and Federal magistrates Court, Annual Reports 2007–08.}

$( m ill io ns )

Federal Magistrates Court Federal Court Family Court

Net cost to Government Fees & Charges $140.00 $120.00 $100.00 $80.00 $60.00 $40.00 $20.00 $0 $16.89m $56.90m $7.13m $86.42m $129.38m $1.24m

A range of services and types of matters do not impose fees, either through general exclusions or exemptions/waivers for particular litigants. Both the SSAT and the vRB do not impose a fee on those seeking merits review, reflecting the disadvantaged nature of those using their services. Similarly, the AAT and federal courts provide fee exemptions for individuals receiving welfare payments or where the fee may present a barrier to access. These include applicants who:

have been granted legal aid

•

hold a health care card

•

hold a pensioner concession card

•

hold a Commonwealth seniors health card

•

hold another card issued by the Department of Family and Community Services or the

•

Department of veterans’ Affairs

are an inmate of a prison or are otherwise lawfully detained

•

are a child under the age of 18 years

•

are in receipt of youth Allowance or Austudy, or

•

are receiving benefit under ABSTuDy.

•

In addition to fee exemptions, fee waivers are also provided in cases of financial hardship subject to an income and assets test—although a waiver may still be granted in exceptional circumstances. The income test applied by the courts ($800 per fortnight after‑tax for singles; $1,200 per fortnight after‑tax for a single with two dependents) is broadly consistent with the income cut‑off applied in relation to welfare support payments. AAT fees are refunded if the applicant’s appeal is successful. In 2007–08, the Commonwealth courts reported that nearly 4,900 exemptions and waivers were granted in relation to federal law matters, and around 32,000 granted for family law matters.139

Cost recovery policy considerations

If we were starting with a blank slate, the design of a justice system may take any number of forms. In theory, a government can take an approach to civil justice system design that leaves the resolution of disputes entirely to the market, or choose to provide all dispute resolution services to all disputants. Neither of these approaches may be considered at all practical or desirable. The first provides an ineffective system with a high risk of lawlessness, characterised by insufficient support for the rule of law and insufficient protection to those seeking to enforce rights. At the other end of the spectrum, government intervention and funding for all aspects of dispute resolution is not affordable—nor is it desirable for government to intervene in matters that can be resolved satisfactorily by disputants without intervention.

Decisions about designing and funding the federal civil justice system are not currently based on any overarching conceptual framework. Fees for the federal courts are currently excluded from cost recovery arrangements.140 _{The design and funding of most aspects of the system may be better seen}

as an accident of history and prevailing politics rather than a deliberate system‑wide approach to avoiding disputes and resolving disputes better. Evaluating the existing system is made difficult by limited statistical analysis of individual institutions, and an inadequate level of comparability of data across the system or analysis about how changes to one part of the system affect other parts.

139 _{Federal Court, Family Court and Federal magistrates Court, Annual Reports 2007–08.}

“The design and funding of most aspects of the system may be