Reform is desperately needed of London's crumbling court infrastructure.

One idea is to build a 27-court commercial court complex at the Royal Courts of Justice.

But this has raised fears of an increase in fees and stirred the debate on whether to use a private finance initiative, reports Lucy Hickman

Lawyers have little doubt that reform is needed to the Commercial Court structure.

Various proposals are being considered but one model in particular is being worked on by Mark Camley, chief executive of the Court Service, and is likely to be the one submitted for approval to the Department for Constitutional Affairs (DCA) and then the Treasury this month (see [2003] Gazette, 6 November, 1).

London Solicitors Litigation Association chairman Tony Guise - who has been heavily involved in considering the various options and whose association ran a major conference on the courts in November - says the favoured scheme envisages erecting a new 27-court building on the site of the Queen's Building at the Royal Courts of Justice (RCJ).

This would house the commercial, admiralty, and construction and technology courts.

The Family Court would move from First Avenue House in Holborn to the RCJ, to be replaced by the Central London County Court.

St Dunstan's House, where the Central London County Court sits, would be sold.

Funding for the project would be achieved from savings in the allocation of existing court premises - the sale of St Dunstan's alone is expected to raise 7 million, while uniting the county court into one site should save 1 million a year.

Additional costs would be met through a 70-100 million private finance initiative (PFI) and, controversially, a rise in court fees.

The thought of the DCA getting involved in a PFI may cause some concern, however, after Parliament's Public Accounts Committee slated its predecessor - the Lord Chancellor's Department - over its procurement of an IT overhaul for the magistrates' courts (see [2003] Gazette, 13 November, 4).

The committee described the Libra project as 'one of the worst private finance initiative deals that we have seen'.

Only one bid was received back in 1999 and the bidder, Fujitsu Systems (then ICL), subsequently found that it could not continue with the whole project.

Libra was initially meant to be a ten-and-a-half-year deal costing 194 million.

It is now estimated to cost 390 million for eight-and-a-half years of service.

After this fiasco, the DCA is bound to consider carefully what PFI model to adopt in building the new Commercial Court.

But the revamp is needed, practitioners insist.

Mr Guise says: 'Changes to the courts are very much needed and have been for 20 years.

St Dunstan's House is crumbling, with cramped rooms and plaster falling off the walls.

'People see things like the Hutton Inquiry on the TV and they expect to see screens and digital functionality in the courts.

But many courts don't even have basic IT and what you find is forests of lever-arch files.'

He says Lord Justice Brooke, the judge in charge of court IT, recently complained that solicitors are not using e-mail as much as they should.

'That's unfair though, because many solicitors use it all the time.

The problem with using it for courts is a lack of belief that the courts have got a viable e-mail system.

It's a vicious circle.'

He says that London needs a modern, efficient Commercial Court to avoid losing work to other dispute resolution centres, such as Frankfurt, Paris, and Stockholm.

Ted Greeno, a senior commercial litigation partner at Herbert Smith, agrees a new Commercial Court building is essential 'to maintain London's position as a leading commercial centre, with English law often the law of choice in international transactions across the world'.

He says the Commercial Court's attraction is reflected in Court Service statistics which show that 52% of cases heard there involved the parties on both sides carrying on business outside England and Wales.

However, Mr Greeno warns that a huge hike in court fees could drive litigants overseas.

'The more expensive it becomes, the less attractive it will be.

It seems to be an underlying policy of the government to make civil justice self-funding, but the preponderance of opinion among the judiciary and legal profession is that this is an abdication of responsibility.'

The state, he says, ought to provide a court system that is as 'efficient, fair and effective as possible'.

'We have in the Commercial Court a world-leading institution which is important to the health of the City, commerce and industry and the country.

But this national asset is taken for granted and starved of investment.

The government doesn't see it as very important.

If anyone suggested funding the Houses of Parliament on a PFI, everyone would see the absurdity of the proposition.

Parliament and courts have a similar standing in society.'

Nick Shaw, shipping partner at Richards Butler, says that since the Arbitration Act 1996 and the Woolf reforms, arbitration is now often preferred to court as a dispute resolution method in his line of work, being more flexible and usually faster.

Higher court fees, he says, will merely push even more litigants in shipping disputes towards arbitration.

And as Mr Greeno points out, 'cases pushed into arbitration may not be heard in this country'.

Mr Shaw says: 'The shipping industry perceives London as somewhere they will receive a fair court hearing, but court is already expensive and, if fees go up, we will be pushing our clients even harder towards arbitration.'

Sarah Anticoni, chairwoman of the Solicitors Family Law Association's London regional group and a partner at Charles Russell, says having all family hearings at one site rather than two would be good for clients, but warns that if the number of courts is increased, the infrastructure and administration would have to be improved accordingly.

Indeed, in a recent Law Society survey of 200 solicitors, 38% said inefficient court administration - such as court errors and lost applications - had a measurable impact on their cases (see [2003] Gazette, 6 November, 1).

Ms Anticoni says that if administrative improvements are made, it should improve litigation and bring down waiting lists, which are currently long in the family division, with even high-priority cases having to wait six or seven months for a hearing.

She says a rise in court fees 'will cause some people difficulties' since the cost of divorce, for example, has risen dramatically in the past few years.

However, Ms Anticoni adds: 'Do I think higher court fees will act as a deterrent to litigants in family cases? Probably not.

If a marriage has come to the end, people will still need recourse to the courts.'

Even though a third of the solicitors polled in the survey said court fees deter clients from pursuing actions, Mr Guise - a member of the Civil Justice Council panel charged with looking at the issue of court fees - says a rise is almost inevitable.

One issue is whether the government should seek full cost recovery through court fees, a policy bitterly opposed by most, including the judiciary.

Mr Guise says: 'Although one always has to recognise that there is limited scope for increasing fees in the small claims and perhaps the family courts, I think you are going to see fees going up across the board.

'Fees for Commercial Court cases could be put on the same footing as in arbitration, with a judge's fee, daily hearing fee and so on.

The main flaw with this is that cases often settle on the first or second day, so those expecting a daily hearing fee from a three-month trial may be disappointed.'

He says that with the costs of many cases running into millions of pounds, the present maximum court fee of about 800 seems low in comparison and a rise is unlikely to faze Commercial Court users since 'serious commercial litigants want serious commercial judges'.

Law Society President Peter Williamson has thrown his weight firmly behind plans for the new Commercial Court.

Addressing the London Solicitors Litigation Association conference on the courts last November, he said that securing the backing of the Treasury was essential, and encouraged lawyers to lobby government 'at the highest level' to ensure its success.

Mr Guise is determined the proposals will receive Treasury approval.

'The Treasury will agree to it otherwise we will launch a campaign with the Law Society and the Bar Council to lobby until it does,' he says.

Lucy Hickman is a freelance journalist