law firms

law firms

“City law has a fight on its hands.”

 Legal Business

Who should fund the criminal justice system?

It looks like it might fall to City law firms to plug the funding gap left once controversial court charges are abolished. New Justice Secretary Michael Gove has floated plans for a multi-million pound tax on commercial law firms to replace the revenue of court charges on guilty defendants.

As we reported a few months ago, a criminal court charge came into effect in April, with the aim of making convicted offenders contribute towards the cost of running the criminal justice system. These court charges on guilty defendants were supposed to generate up to £90 million a year, but, as Michael Gove admitted in the House of Commons only this week, they have always been “a cause of concern.”

Criminal court charges are unfair, unrealistic and likely to be highly inefficient. They are particularly harsh on vulnerable defendants

 Alastair McDonald QC, Bar Council Chairman

 

“it is worthless as well as dangerous. Should he not just scrap it now?”

Shadow Justice Minister, Andy Slaughter

Ever since he took the reins of the Ministry of Justice after the General Election in May, Gove has faced mounting pressure to scrap the unpopular court charges implemented by his predecessor.

These proposed new taxes on law firms are one of a few suggestions from Michael Gove to replace the unpopular court charges and find a “balance between the funding of our courts coming from the taxpayer and that coming from those who use our courts”. They also align with his calls for lawyers to look to their consciences’ and do more pro bono work in the place of the scrapped legal aid.

 “Those who have benefited financially need to do more to protect access to justice”

 Ministry of Justice

A 1% levy has been suggested on the top 100 UK firms, with combined revenues of £20.64bn. Though the levy would generate over £200 million a year, it is seen by law firms and legal professionals as an unfair and arbitrary taxation on one industry:

“the move will be highly unpopular among City law firms, who are already up in arms about rising court fees in civil cases.” 

Legal Business

The Ministry of Justice is pitching these taxes as an attempt to balance what is currently seen as a two-nation justice system, in which the wealthy international class can access the best justice the UK has to offer, while others have to put up with a ‘creaking, outdated system.’

What do you think about these proposed taxes? How hard would a 1% levy impact on your organisation? Let us know. Tweet us @CBSIT_UK!