Michael Gove is under mounting pressure to scrap courts charges – as The Independent reveals that the hated penalties are causing victims of crime to miss out on compensation.

The Justice Secretary has delighted campaigners by winning a cabinet battle to scrap a controversial contract for providing prison services to Saudi Arabia – one of a series of progressive policy measures he has pushed through since taking the job.

Mr Gove, previously a bête noire of teachers as Education Secretary, is building an unexpected reputation as a human rights champion in his new role.

His recent acts as minister include: overturning the ban on prisoners receiving books; scrapping a £100m plan for a “borstal-style” secure children’s college; and seeking inspiration from Texan community efforts to reduce the prison population.

The House of Lords will vote on Wednesday in a debate aimed at getting the Government to re-examine the unpopular criminal courts charge – dubbed a “tax on justice” – which was introduced by Chris Grayling, Mr Gove’s predecessor. Campaigners hope the charge will also be subject to reform.

The compulsory levy is fixed at £150 if someone pleads guilty to a criminal offence, but it can rise to £1,000 if they deny wrongdoing but are found guilty. Critics warn this encourages innocent but poor defendants to plead guilty. The Independent has previously revealed numerous cases of poor people being hit with bills for hundreds of pounds for minor offences.

It can now be revealed that the charges are also having the perverse effect of short-changing victims of crime, and the Crown Prosecution Service. Many magistrates are now choosing not to award compensation to victims – or prosecution costs – in order not to overburden defendants with unrealistic fines, The Independent has learnt. Unlike victim compensation, magistrates are legally compelled to impose courts charges on all criminals.

Victims who have missed out on compensation include a 21-year-old woman from West Yorkshire who was scarred for life after a man threw a glass bottle through a car window. The judge trying the case said he was unable to award compensation to the victim because he had to impose a £900 criminal courts charge on her attacker.

The House of Lords will debate the introduction of the charge and vote on a motion of regret tabled by Labour’s Jeremy Beecham. Writing ahead of the debate, Lord Beecham said: “Among the many dubious legacies bequeathed to Michael Gove by his predecessor, perhaps the most misconceived is the criminal courts charge. I only hope that Mr Gove, who has abandoned one ill-conceived project of Mr Grayling’s, will do the sensible thing and urgently revise these deeply flawed regulations.”

The loss of Crown Prosecution Service costs mean the charge is effectively making one arm of the state take money at the expense of another. In one recent case in Gloucestershire, magistrates did not demand prosecution costs of a very ill woman whose dog had bitten a council worker because they already had to impose a £180 criminal courts charge. The chair of the bench said “in view of [her] means” there was “good reason” not to impose costs.

The damaging consequences of this unfair and unjust charge are becoming clearer by the day. Ordering indigent people to pay money they simply don’t have is never going to work <p>Frances Crook, chief executive of the Howard League for Penal Reform</p>

The Bar Council said that innocent defendants are encouraged by the policy to plead guilty to avoid the higher charge if they later lose a hearing. Alistair MacDonald QC, chairman of the Bar Council, said: “No one should be influenced by the extent of a court charge in making their decision about whether to plead guilty.”

Frances Crook, chief executive of the Howard League for Penal Reform, said: “The damaging consequences of this unfair and unjust charge are becoming clearer by the day. Ordering indigent people to pay money they simply don’t have is never going to work.”

Seventy per cent of magistrates say the courts charge has impacted on sentencing, according to polling by the Magistrates’ Association sent to the Justice Select Committee. The ministry insists sentencing guidelines make it clear the charge should not impact on decisions over any other fines but in practice this is being ignored to stop impoverished defendants being burdened with impossible bills.

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The scale of opposition to the charge from the bench is significant, with 93 per cent of magistrates saying the courts charge is not set at a reasonable and proportionate level. The majority – 84 per cent – think the charge should be means-tested, according to the poll of almost 1,000 magistrates. The Independent revealed last month that 50 magistrates had already resigned in protest.

£1,000 The amount a defendant can be charged if they deny wrongdoing but are found guilty

Richard Monkhouse, chairman of the Magistrates’ Association, said: “We have never seen strength of feeling on this scale before. Our members believe this goes to the very heart of fairness in the system. All of these problems can be addressed through judicial discretion over the charge.”

A Ministry of Justice spokesman said: “It is right that convicted adult offenders who use our criminal courts should pay towards the cost of running them. The introduction of this charge makes it possible to recover some of the costs of the criminal courts from these offenders, therefore reducing the burden on taxpayers.

“Instalment payments can be set up if a defendant’s means do not allow prompt payment in full.”

Q&A: The Criminal Courts charge

Q | What is the Criminal Courts Charge?

A | The new levy was introduced in April by the former Justice Secretary Chris Grayling to make criminals pay for the upkeep of the courts.

Q | How much is it?

A | In the magistrates’ court it is fixed at £150 if someone pleads guilty, but it can rise to £1,000 if they are found guilty after a hearing. In the crown court it can be as much as £1,200.

Q | What is its impact on justice?

A | Critics say it is undermining the justice system by encouraging impoverished defendants to plead guilty, even if they are not.

Q | Why else are magistrates opposed to it?