TRIBUNAL FEES ARE DEAD! LONG LIVE TRIBUNAL FEES?

Some of us may have experienced a sense of déjà vu on learning of the Government’s announcement on 29th January of a consultation into the structure and level of proposed fees for using the Employment Tribunal and Employment Appeal Tribunal. Didn’t we do this back in 2013?

Tribunals In The Time of Fees
Well, yes and no. There was, as you will recall, a Tribunal fees regime in place from July 2013 to July 2017 when it was abandoned as a result of the Supreme Court decision in R (Unison) v The Lord Chancellor [2017] UKSC 51.

While fees were payable, Claimants had to stump up £160 or £250 to issue a claim and £230 or £950 for an Employment Tribunal hearing, depending on the type of claim. In the EAT the issue fee was £400 and the hearing fee was £1,600.

Surprise, surprise! Case volumes dropped by 53% in the 12 months after the introduction of fees, from roughly 59,000 cases between July 2012 and June 2013 to around 28,000 cases between July 2013 and June 2014. The coffers of HM Courts and Tribunals Service (HMCTS) swelled considerably in The Time of Fees, but the money received had to be returned when the Supreme Court ruled that the fees regime was unlawful.

Even though there was a fees remission scheme in place, the fees deterred low earners from bringing claims especially the types of claims which attracted the higher issue and hearing fees. Since theses were the more complex claims like discrimination, and since it was more likely to be women or those from minority groups who had such claims and were deterred from bringing them, the regime was found to be discriminatory and had to be dismantled.

Tribunal Fees 2.0
Since the last fees regime was abolished, cases have increased, from around 18,000 in 2016/17 to about 33,000 in 2022/23, and the new consultation paper insists that lessons have been learned from the Supreme Court ruling which put an end to that regime. In particular there is an acceptance that the previous fees charged were too high which led to a denial of access to justice.

The Government indicates that it is keen not to repeat previous mistakes and the new proposal is underpinned by three admirable central pillars: affordability, proportionality and simplicity.

The proposed fee is therefore just £55 per claim, and this will cover the matter all the way through from issue to hearing. Appeals would also cost only £55 per decision appealed and, again, this would include the hearing. Where there are several claimants it’s proposed that the £55 cost can be shared between all claimants.

Certain claims, such as s.188 claims and claims relating to the National Insurance Fund will not require a fee.

On the face of it, this sounds like the proposal does indeed meet the intended criteria of being affordable, proportionate and simple to understand and operate. If anything, given the actual costs involved in providing the Employment Tribunal and Employment Appeal Tribunal services, the proposed fee might even be undervalued, particularly as there will be a simple fee remission scheme (“Help with Fees” or “HwF”) which will be more generous than the last time (the earnings threshold for disqualification from the scheme will be higher).

Certainly, the anticipated fee income (£1.3m–£1.7m a year from 2025/26 onwards) will not make much of a dent in the £80 million cost of running the Tribunals Service, but part of the rationale behind introducing fees is that users of the service at least pay something rather than have the taxpayer paying the whole bill. Another reason is that it puts the Employment Tribunals on a similar footing to Courts and other Tribunals which resolve legal disputes.

Comment
Although reducing the volume of claims is not a stated aim of the proposal, the Government has assumed that (coincidentally?!) there will be a 20% drop and it hopes that more claimants will settle through ACAS Early Conciliation. My view was always that any kind of fee, however small, is likely to reduce the number of spurious claims. If an individual is just “trying it on” with no genuine conviction, it seems to me they are a lot less likely to press “submit claim” if they first need to provide debit or credit card details and authorise payment. So, this looks like it could be a welcome development – especially for employers who routinely have to pay lawyers to fend off claims which are completely devoid of merit. Good news for good employers.

The consultation is only on the structure and level of the fees, so it would appear that the principle of introducing fees (again) is not open to discussion. However, I do wonder whether there might still be a denial of access to justice issue if a 20% reduction in claims is anticipated. That’s 20% even taking into account the HwF scheme and an additional safety net in the form of the Lord Chancellor’s Exceptional Power to remit fees for claimants who are ineligible for HwF but are nonetheless unable to afford a fee due to financial or other hardship. If that 20% (or whatever the number turns out to be) consisted entirely of spurious claims then fair enough, but surely that’s unrealistic. What’s likely is that there will be more genuine claims which will not now be brought which means this proposal is also likely to be good news for bad employers.

The consultation closes on 25th March and the Government expects the rebooted Tribunal fees regime to become law by November 2024. If that sounds like a fairly swift turnaround, it is! If this suggests unseemly haste for what will still be a fairly significant change, one might reasonably ask Cui bono?