John Sprack Training

Justice Committee criticises Employment Tribunal Fees

22 June 2016

The House of Commons Justice Committee has released its report on court fees, including some forthright criticism of the fees regime applied to employment tribunals. The report was published just three days before the EU referendum, so it may not have received the publicity which it deserves. But those who have argued and campaigned against the impact of ET fees, will find that it reinforces their arguments. And the government ought to find it embarrassing reading.

The report deals with the issue of costs in courts and tribunals generally, and it focuses on the question of access to justice. It regards the issue of employment tribunal fees as particularly controversial, and deals with the staggering drop in the number of claims. There was a decline of 67% in single cases and a drop of 72% in multiple cases in the two years after the introduction of fees. 

It asks the question: Is the drop in claims due to early conciliation? The reliance of government upon this contention was “even on the most favourable construction, superficial” says the Committee. The main survey carried out by ACAS showed that of the 68,000 cases referred to them for early conciliation in the first nine months of mandatory early conicliation,15% settled and 22% went to tribunal. Of the remaining 63%, 26% said that they did not progress because of fees (this amounts to 16% of the whole, or 10,880 claims).

In fact, the Committee gave prominence to the view that the introduction of fees had hindered, rather than helped, the prospects of settlement being reached for prospective claims. They quoted Sir Ernest Ryder, Senior President of Tribunals, who said:

 ‘respondents are ….avoiding engagement in conciliation processes and waiting for the next fee to be paid, which means that settlement opportunities are being lost”

Kate Booth, partner at Eaton Smith LLP, said she advised employers to  

“..wait for the employee to pay a fee. Ultimately you want to call their bluff - are they prepared to put their money where their mouth is? - so you sit back and see whether they do it.” 

The Select Committee concluded that ‘in many cases the existence of fees provides a disincentive for employers to resolve disputes at an early stage.

What about deterrence of vexatious claims? That was one of the stated objectives of government in introducing fees.The evidence received was to the effect that It is not the case that the proportion of cases in which the claimant is successful has increased. “So fees deterred claims which would potentially have been successful to roughly the same extent as potentially unsuccessful claims”, the evidence suggested.

The Select Committee concluded:

“The arguments presented to us by the Government in this inquiry, limited as they are for the reasons we have previously set out, have not swayed us from our conclusion, on the evidence, that the regime of employment tribunal fees has had a significant adverse impact on access to justice for meritorious claims”

The Committee was particularly concerned about the impact of the fees regime on claims for maternity and pregnancy discrimination. 

Its report points out the effect of  saving for the arrival of the baby by a pregnant woman- for toys, bedding etc. Any such savings are taken into account in deciding on remission from fees.

The remission system was also felt to be unhelfpul in the case of those who had received a payment on termination e g for redundancy, as this would be taken into account in calculating capital when determining whether remission of fees should be granted.

The review pointed out that virtulally no money claims at all were being brought in the tribunals, whereas formerly many had been brought by low paid workers in sectors such as care, security, hospitality, cleaning. In such cases, few defences were available. The sums involved were small, but important to those involved.

The classification of claims into Type A and Type B was too simplistic and should rather be into “short, standard and open” as classified by the tribunals themselves. 

What would be an appropriate fee? Some rejected any fee. Citizens Advice survey showed that 90% would not be put off by a £50 fee.

The government came in for particular criticism for its failure to publish its own review into employment tribunal fees. It is clear that they have been sitting on their own report for some time, despite a commitment to publish it by the end of 2015. The Justice Committee referred to "inconsistencies in the Government's account of the progress of its review into the impact of employment tribunal fees". They had held up publication of their own report ont he basis of the government's commitment to publish by the end of 2015, so that they could take it into account. They state: "We have not appreciated being strung along in this fashion" and characterised it as "unhelpful and not good practice".

The Justice Comimitte have made the following recommendations (subject to any new factual information to be revealed in the government’s review)

  •  the government should “publish forthwith” the factual information collated in their review
  •  the overall quantum of fees should be reduced
  • the distinction between Types A and B cases had no logic, and should be replaced by single fee, three-tier fee, or fee set as proportion of the claim
  • disposable capital and monthly income thresholds for remission should be reduced
  • claimants should only have to make one application for remission, to cover both the issue and the  hearing fee
  • special consideration should be given to claims for maternity or pregnancy discrimination, and time limit of three months for such claims should be reviewed

In reponse to the argument that this would reduce revenue, the report argues that an increase in the number of legitimate claims would bring in additional fee income. Further, it says, access to justice must prevail over income from fees.

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