Cast your mind back to a time before July 2013 when the perception was that businesses were regularly on the receiving end of Employment Tribunal claims from disgruntled employees and ex-employees.

Times were good for lawyers and bad for employers, one might have said.  So sensing a win-win-win (bash lawyers, limit spurious claims against political allies – sorry, that should read employers – and cut the cost of running the Tribunal service), the Government seized the opportunity to introduce a system of fees for Tribunal claims.  In an endeavour to make this slightly less overt a political device than it really was, that system came with a fee remission mechanism for those in significant financial hardship.  In a less worthy endeavour to prevent that mechanism undermining the point of the changes in the first place, however, it was set at a very low level and made off-puttingly complicated to use.

It came as little surprise, therefore, that the introduction of the fees saw Tribunal case volumes fall off a very steep cliff.  Back in March 2014, we reported on a drop in claims which at that time was estimated at close to 79%. (    It was immediately apparent from the size of that drop that the fees had done more than weed out spurious claims.  That objective was never going to be achieved by fees alone unless you assumed that the majority of spurious claims were made by the needier members of society, a suggestion so loaded that even more rabid Conservatives were not prepared to make it in public.  What had been weeded out were the smaller claims and those of ex-employees unable to stomach either the investment of the fee or the complexities of the remission system.  It was clearly justice not being done or being seen to be done.

The trade union UNISON sought judicial review of the fees regime and the latest round of that case has now been rejected by the Court of Appeal.  Despite rejecting the application, however, Underhill LJ passed pointed comment in the Judgment that:

“The decline in the number of claims in the Tribunals following the introduction of the Fees Order is sufficiently startling to merit a very full and careful analysis of its causes; and if there are good grounds for concluding that part of it is accounted for by Claimants being realistically unable to afford to bring proceedings, the level of fees and/or the remission criteria will need to be revisited”   

Most recently there has been formal recognition of the problem in the form of the Ministry of Justice undertaking a review of the fees regime.  As part of that process, a submission has been prepared by the President and the Regional Employment Judges themselves.   The points to note are that:

  1. the Judges consider that the imposition of fees has had an adverse effect upon access to justice and acts as a clear disincentive to bringing claims;
  2. the income produced by the fees does not cover the target proportion of the running costs of the Tribunal system that the Government set itself;
  3. around 60% of potential claimants who entered early conciliation neither settled their claim through Acas nor then brought a Tribunal claim, which might demonstrate the size of the mismatch between those who feel aggrieved enough to go through conciliation and those who are able to pursue it any further;
  4. the remission requirements are fixed at too low a level to be effective;
  5. the Judges make a number of recommendations, including:
    1. A reclassification and recalibration of the issue and hearing fees (although they stop short of suggesting what that might be). The obvious problem for the Government is that a drop in the fees big enough to prevent their acting as a disincentive to claims would (a) prevent their acting as a disincentive to claims; and (b) torpedo amidships the financial case for having them at all. On the other hand, a small drop might alleviate some of the political and judicial heat but wouldn’t actually make the necessary difference and would cost a small fortune to implement.
    2. Controversially (as recognised by the Judges) – a suggestion of charging for each application made to the Tribunal during the conduct of the proceedings. The idea behind this is to encourage the parties to prepare for final hearing under their own steam, the only caveat to this being scope for not charging a party where the application is due to an act or omission by the other side. I would question whether this will result in money being made or saved by the Tribunal or rather end up in further costs incurred by dealing with arguments over whose fault it was that the application had to be made in the first place. I would also query to whose benefit this would be, bearing in mind the number of unrepresented individuals bringing claims who (even acting entirely in good faith) can often fail to understand their obligations when complying with Tribunal Orders.
    3. Perhaps even more controversially – a suggestion that Respondents should be made to pay Response and Hearing fees, the idea being of course that parties should be encouraged to settle and that because both parties are incurring the cost of the Tribunal system, both parties should contribute to it. This seems somewhat harsh when one considers that a Respondent employer is not “enjoying” the benefits of the Tribunal system and is merely responding to a claim that it did not want and which the employee may well go on to lose. The Tribunal suggests that this fee should be automatically repayable as part of any award but this does not give any consideration to how difficult it can be for employers to recover tiny sums of money through a civil process where the losing Claimant does not pay.

Most recently, starting last week, steps have finally been taken to reduce the deterrent effect of the remission scheme.  A new form “Help with Fees” has been introduced.  This is generic to both Courts and Tribunals (not limited to the ET).  It asks applicants to self-assess their eligibility for a fee remission and no longer requires them to submit supporting evidence like payslips and bank statements.  It gives up-front guidance to wannabe claimants that savings over £16,000 or a net monthly income over about £1,245 will limit or prevent access to any fee remission.   The Tribunal Service will now check direct with the Department of Work and Pensions to see if the remission claimant is on the relevant state benefits and not rely on the claimant to prove it.

This does make the Tribunal fee remission system much more accessible.  On the other hand, it will also (if successful in lifting the deterrent element) greatly increase the cost to the Service of running it in the first place.  Hang on, lads, I’ve got an idea…..