New VCAT fee structure adds Corporate and Concession rates

The Victorian Civil and Administrative Tribunal (VCAT) was established as a low-cost alternative to the courts for resolving civil disputes, but in recent years its fee increases have been criticised for undermining that mission. In 2013, fees for consumer cases increased from $39 to $132 and the number of applications fell by 15 per cent. Gerard Brody of the Consumer Law Action Centre said, “If the claim is less than a couple of thousand dollars then you might think the fee, together with the time involved with having to go to VCAT, is not worth the effort.”

The Andrews Government conducted a review of the tribunal’s fee structure to ensure its resources were allocated as effectively as possible, taking into account the applicant’s capacity to pay. The result is a new system providing for Concession, Standard and Corporate fee rates, which commenced on 1 July 2016.

At the higher end of the scale, a new Corporate fee rate has been established, which applies to government agencies and companies with a turnover in excess of $200,000 per year. The Victorian Government highlighted that “the corporate fee to challenge the refusal of a planning permit for a development with a value of between $15 million and $50 million will increase from $2,086 to $2,328, while the concession fee to challenge the grant of such a permit will now be $150.”

The Standard rate (for individuals and small businesses) is fixed at 70 per cent of the Corporate rate. For most residential tenancy matters, the Standard fee is $61.50, and there is no fee for bond disputes. The new fee structure also includes a sliding scale based on the value of the claim; for goods and services, the Standard fee ranges from $61.50 for a claim under $3000, to $1571 for a claim over $5 million.

In order to address access to justice for those least able to pay, a new Concession rate of fees has been established. Holders of a federal Health Care Card will be eligible for this category, with no application fee for residential tenancy disputes, or for goods and services claims worth up to $15,000. They will also benefit from a cap of $150 on any fee they are required to pay. The option of applying for a fee waiver in exceptional circumstances will remain.

The review process included public consultation, and the Government appears to have taken into account some of the specific suggestions made by lobby groups on behalf of low-income claimants. For example, both the Victorian Council of Social Services and the Consumer Action Law Centre argued that $10,000 was too low a threshold for small claims — the new fee structure removes application and daily hearing fees for Concession holders for claims up to $15,000. However, their proposals that there should be no fee for claims up to $100,000 (VCOSS) or for any claim regardless of value (CALC) were not accepted.

Labor to increase VCAT fees again, despite access concerns

The Andrews Government will not reverse VCAT fee hikes that caused a reduction in the number of cases it dealt with. Attorney-General Martin Pakula acknowledged that fee increases “contributed to a substantial drop-off in applications to the tribunal”, but will allow fees to increase by up to 10% for the 2015-16 financial year. He said the Government will work on a new fee structure to be implemented in the following year, as he had promised before the last election. Last year, statistics revealed that VCAT claims fell by 15-35% in lists affected by fee increases. Barrister Michelle Quigley QC warned, “Ordinary people just can’t afford it. It’s contrary to access to justice.”

Concerns VCAT fee hikes hurt access to justice

The impact of VCAT fees on access to justice has been questioned, with statistics revealing a significant drop in the number of applications following fee increases. Last financial year, fees for consumer cases increased from $39 to $132, and the number of applications fell by 15%. Gerard Brody of the Consumer Law Action Centre said, “VCAT was created as an alternative to the mainstream court system [and] we are concerned that it remain a low-cost accessible tribunal, rather than becoming more court-like. If the claim is less than a couple of thousand dollars then you might think the fee, together with the time involved with having to go to VCAT, is not worth the effort.” The fee to lodge a planning dispute was increased from “$322 with no daily charges” to “$805, with daily fees of up to $1462″—and in the following year, the number of applications fell by 35%. VCAT said this was partly explained by changes to planning laws making it easier to amend planning permits without going to VCAT, but barrister Michelle Quigley QC warned, “it’s not just a one-off fee now—it’s a daily fee. Ordinary people just can’t afford it. It’s contrary to access to justice.”

Schrödinger’s VCAT: both a court and not

Is VCAT a court? Yes and no, the Court of Appeal ruled in Subway Systems Australia Pty v Ireland [2014] VSCA 142. The case was about a Subway restaurant franchise arrangement, including an arbitration agreement to deal with any disputes that arose. The Commercial Arbitration Act 2011 (Vic) prevents “a court” from hearing a matter that is covered by an arbitration agreement. The franchisees tried to take a retail tenancy dispute to VCAT, but Subway objected. The Court of Appeal majority judges held that parliament intended the law to “prefer[] arbitration of whatever kind has been agreed between the parties over State sponsored dispute resolution”, and the word “court” should be interpreted broadly in this context. So VCAT is usually considered to be a tribunal, but in some specific situations it is treated as if it was a court.

VCAT losers will soon pay winners’ fees

The Victorian Civil and Administrative Tribunal Bill 2014 was passed by parliament this week. It will allow VCAT to order the losing side to pay the fees of the winner (but not their full legal costs). The Tenants Union is concerned that this will “cause further harm to a frequently economically disadvantaged section of our community”. On the other hand, the Consumer Law Action Centre says the impact of last year’s fee increases may be reduced, because winners could now have their fees reimbursed. A proposed amendment to require VCAT to specifically consider “financial hardship” before making a fees order was defeated.

New restraint orders to limit vexatious litigants

The Napthine Government has proposed a crackdown on “tribunal pests and costly court time-wasters”. Under the existing system, a person can only be declared a “vexatious litigant” by the Supreme Court on the application of the Attorney-General; the bill is a response to a parliamentary committee’s call for a more flexible system. According to the explanatory memorandum, “The Bill enables the Supreme Court, the County Court, the Magistrates’ Court and VCAT to make various types of ‘litigation restraint orders’, which increase in severity in accordance with a person’s litigation history and pattern of vexatious behaviour.” A vexatious litigant is prohibited from launching a legal case without first being granted permission by the court.