Employment Tribunal statistics released in March 2014 show that there has been a vertiginous drop in new employment claims since the new Tribunal fee structure came into force on 29 July 2013; the average number of claims per month in the October to December 2013 period being 79% less than the same period last year.
The new fee structure means that for the majority of claims, including unfair dismissal and discrimination, an employee now needs to pay £250 at the time of filing the claim, and a further £950 as a hearing fee, though he is likely to recover both if he is successful at the hearing.
When pushed to put their own money at risk, it seems on the face of it that over three quarters of employees are no longer prepared to take their chances. At first blush, this looks terrific – a legislative change to employment law and practice that acts as a breath of fresh air for employers who have long had to foot the legal fees of defending even the most unworthy claim, or else take the ‘commercial’ decision to offer a small settlement instead. But that is too simplistic, too single-interest, too Daily Express as an approach. We cannot begin to assume that all, or even most, of that 79% consists of people with no-hope cases who would otherwise have sought to screw an undeserved settlement out of a blameless employer by lodging a spurious but gratis claim.
This can only mean that now some people with valid claims, those subjected to some material wrong at the hands of their employer, no long feel able to take action to enforce their rights. Some of these may be put off by the fee, and some by the complexity of the process required to obtain a fee exemption, but in either case, that is scarcely justice.
Indeed, unless that statistic turns out to be an unrepresentative blip, there could even be an argument that because it is clearly such a deterrent in practice, the fee system is in breach of the provisions of the Equal Treatment Directive which require EU member states to provide access to an effective right of recourse for discrimination cases.
So far, attempts to overturn the introduction of fees through applications for judicial review have failed, but it is not hard to think that the subsequent release of such stark numbers could lead this to be looked at again. Even if the Tribunal fees structure remains in force, it may only take a short time for Claimant-focused law firms to offer to cover the Tribunal fees for employees willing to pay for their services, which is already the case where ‘no win, no fee’ arrangements are agreed.
In all, it is easy to conclude that a Government seeking to preserve access to justice (rather than just reduce the Tribunal system’s cost to the State) would have focussed on toughening up the Employment Judges’ powers to award costs against those bringing spurious claims or conducting them unreasonably. While not as immediate a deterrent as a cash payment up front, an employee would at least know that if he tried to bring a clearly untenable claim (and especially if he disregarded advice to that effect) he could well get stung pretty badly.
At the moment there is no Tribunal mechanism for offering any independent evaluation of a claim at an early stage, and the new ACAS pre-claim conciliation process is not intended to fill this gap. Perhaps the Government should have focused on these options instead of the current fee structure, which deters only the financially-challenged, not those with weak or vexatious claims.
