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Are we about to see an increase in Employment Tribunal claims?

Fees were introduced into the Employment Tribunal system on 29 July 2013, with claimants being required to pay a fee to issue their claim and another fee in order to progress their claim to a final hearing before an Employment Judge. In addition, parties are now also required to pay fees for things like reconsideration of judgments or dismissal of claims after they have been withdrawn.

Since the introduction of fees there has been a significant drop in the number of claims being issued in the Employment Tribunal of around 70%. While that may be positive news for employers, it has sparked concern amongst many practitioners, unions and campaign groups that the employment tribunal fee system represents a barrier to access to justice. In light of those concerns there have been various legal challenges by unions and claimant law firms, so far without success. In addition, in June 2015 the government announced that it would conduct a post-implementation review of the fee system and it was expected to conclude that review by the end of 2015. Unfortunately, the government has not yet released its findings and there is no clear indication of when we can expect to receive them.

In 2015, the House of Commons Justice Committee announced it would undertake its own inquiry into the impact of a range fees and charges within the civil court and tribunal regime. Its findings were published last month and concluded that major changes were required to restore an acceptable level of access to the Employment Tribunal system. A summary extract of the Justice Committee’s press statement is below:

Principle of fees

The Committee has no objection to the principle of charging fees to court users: it says that some degree of financial risk is an important discipline for those considering legal action. The question is what is an acceptable amount to charge, taking into account the need to preserve access to justice: this will vary between jurisdictions and different types of cases.

The Committee concluded that the introduction of fees set at a level to recover or exceed the full cost of operation of the court requires particular care and strong justification.

Committee Chair Bob Neill MP said:

Where there is conflict between the objectives of achieving full cost recovery and preserving access to justice, the latter must prevail.

Evidence base

The report raises serious concerns about the quality of the Ministry’s research. It shares the view expressed by the senior judiciary and some others who gave evidence that it does not provide a sufficient basis to justify the proposals. Lord Dyson, Master of the Rolls, described it as lamentable. The Chair of the Bar Council described the research undertaken in relation to the domestic effects of fees as insignificant and the President of the Law Society said it was poor.

Bob Neill added:

We understand the financial pressures on Ministers in a Department with unprotected spending. We also understand that the MoJ does not always have the luxury to be as rigorous and meticulous in preparing the ground for controversial policies as it might wish. But it is important that in such circumstances the Ministry is frank about that fact and does not represent the quality of its evidence base to be higher than it is.

Employment tribunal fees

There has been a lengthy delay in the publication of the Government’s post-implementation review of the impact of Employment Tribunal fees, which aims to assess their effect against the three main objectives of transferring some of the cost away from the taxpayer and towards those who can afford to pay; encouraging parties to seek alternative methods of dispute resolution; and maintaining access to justice.

In addition, the Government has said that fees are likely to discourage weak and vexatious claims, and this aim received support in evidence to the Committee from the Federation of Small Businesses and Peninsula Business Services. The Committee says that this is a reasonable objective, but notes the comments of the Senior President of Tribunals that it is too soon to say whether this has happened.

The Committee finds it unacceptable that the Government has not reported the results of its review one year after it began and six months after it said it would be completed.

Bob Neill added:

The Ministry of Justice has argued that changes to employment law and the improving economic situation, as well as the pre-existing downward trend in the number of Employment Tribunal cases being brought, may account for part of the reduction in the number of cases. These may indeed be facts but the timing and scale of the reduction following immediately from the introduction of fees can leave no doubt that the clear majority of the decline is attributable to fees.

The Committee recommends that the Government should publish immediately the factual information which they have collated as part of their post-implementation review of Employment Tribunal fees. The Committee says that without this information having been made available to it, its recommendations in relation to employment tribunal fees should be taken as indicating options for achieving the overall magnitude of change necessary to restore an acceptable level of access to justice to the Employment Tribunals system.

These recommendations include: a substantial reduction in the overall quantum of fees; replacement of the binary Type A/Type B categorisation of claims according to complexity; an increase in disposable capital and monthly income thresholds for fee remission; and further special consideration of the position of women alleging maternity or pregnancy discrimination, for whom, at the least, the time limit of three months for bringing a claim should be reviewed.

While the recommendations of the Justice Committee are not binding on the government, their findings will undoubtedly create political pressure to consider making changes to the fee system. In reality we don’t anticipate that fees will be removed altogether, but it is quite likely that there will be a reduction in the level of fees in the future which will lead to a higher number of claims being issued.

Contact our Employment Team.