A survey carried out by the CBI published earlier this week shows that 90% of the 299 employers spoken to thought that the removal of Employment Tribunal fees would either probably or definitely lead to an increase in weak and misguided claims. Yikes. But is it true?
That there will be an increase in claims is indisputable. Apparently just over 3,000 single cases were filed in August 2017, an increase of 124% over July (when the fees were effectively abandoned) and 109% on the same month last year. This pattern certainly reflects the recent experience of a number of our larger clients with predominantly blue-collar workforces.
However, there are obviously no statistics yet as to the success rate (hence merit) of those new claims. Therefore it may be said to be premature to assume them to contain an increased proportion of vexatious cases. It is worth noting that even after the fee regime had bitten fully and claim numbers plummeted in 2013, success rates at ET remained broadly unchanged, so driving a stake through the heart of the Government’s argument that charging for the use of the Tribunal would deter weak or vexatious cases.
When considering this question, it is also important not to confuse “weak and misguided” on the one hand with “vexatious” on the other, since that will tend to obscure the messages coming out of surveys of this sort. So far as the Tribunals have historically been concerned, “vexatious” means the bringing of “a hopeless claim not with any expectation of recovering compensation but out of spite to harass the employer or for some other improper motive“. That was the National Industrial Relations Court in 1974, but by 2013 this had been softened by the Court of Appeal to include a claim which has little or no discernible basis in law, and “where its effect is to subject the employer to inconvenience, harassment and expense out of all proportion to any gain likely to accrue to the claimant, and …. involves an abuse of the process of the court, meaning using it in a way which is significantly different from the ordinary and proper use of the court process”.
The element of malice required in the 1970s therefore seems to have become an issue of effect and process rather than intention, but the fact remains that those seeking any form of revenge (as opposed to fair remedy) through their ET claim will not have been put off by the fee, and therefore there is little likelihood of any impact on the number of such cases being brought. In addition, we must also be careful about constitutes “abuse of process”. All those involved in ET proceedings know that with time, disclosure and the unexpected detonation of a witness on the stand, a weak case can become a winner and dead cert an also-ran in a moment. It would also be a brave advisor who would suggest that for settlement purposes a party should never take a harder outward line in the pursuit or defence of an ET claim than the facts necessarily justify (even assuming, which you can’t, that the “facts” in the advisor’s possession are objectively correct). That is use of the court process, not abuse of it. So that tactic too is unlikely to change following the abandonment of ET fees.
We might see more cases in circumstances where advisors can now say to prospective claimants that they have nothing to lose in starting proceedings. But that won’t be true in any case where the claimant is carrying his own legal costs, since they can easily reach levels dwarfing the ET fee. It may be that Unions relying on in-house resources for the advocacy of their members’ claims may feel emboldened to run more cases, but there is always a finite limit to those resources and so the resulting increase may be limited.
I believe that the claims which will probably increase most are those for small sums of money, such as statutory redundancy payment or small but unlawful deductions, marginal defaults on holiday pay or national minimum wage, etc. At the moment the fee is a deterrent simply by virtue of its relationship to the sum being claimed, but that does not mean for a moment that those cases are either week or vexatious. Employers which take care to pay what is owed in these small respects are probably going to be those least affected by the upswing in ET claims.