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Tribunal fees could benefit the legal system – But past errors must inform new scheme

5th February 2024
Birmingham employment solicitor on the right to disconnect

A consultation has been launched on the reintroduction of Fees for issuing claims before the Employment Tribunal – after previously being abolished in 2017.

This is a thorny and delicate issue which has been hotly debated in and amongst Government, workplaces, and Trade Unions.

There is clearly an ambition to create a service that can, at least in part, generate a certain percentage of its own costs rather than being entirely reliant on government funding.

However, doing so must balance access to justice and ensuring that those most vulnerable in society, often those on low incomes or who have lost their jobs, are able to access the system equally and fairly without such fees having a disproportionate effect.

Why did the last fee structure fail?

The Government initially introduced fees in the Employment Tribunal in July 2013, sorting claims into two categories which respectively totalled £1,200 and £1,6000 in potential costs.

The impact of the fees was almost immediate, with the number of claims being issued dropped off significantly – in the region of 50 per cent in the 12 months after the introduction of the fee scheme.

While this is a stark figure, we must also remember that this coincided with a time of early conciliation and an increase in the minimum required period of employment for unfair dismissal claims.

We should therefore be cautious when attributing this fall in Tribunal cases to fees alone.

Nevertheless, the fees introduced in 2013 were deemed ‘unlawful’ after significant objections from workers and trade unions. The significant reduction in claims brought was largely attributed to Tribunal fees, as well as a limited ability for claiming fee exemptions – allowing for a successful appeal against them in 2017.

Of course, the challenge did not conclude that fees could not be introduced – only that those which were amounted to a restriction on the access of justice were unlawful.

It is therefore perhaps unsurprising that, in a time of high costs for public services, fees are being proposed once more.

What have we learned?

In terms of the impact of fees, we will most likely see a reduction in the number of claims issued. However, the exact impact will depend upon how the fees are structured and where they are put in place.

Currently, a £55 fee is suggested – a significant decrease from the fees faced during the 2013-17 fee period, and which looks far more reasonable and affordable for all concerned.

What we cannot be sure about is what level of fees will be genuinely prohibitive to those on the lowest income or those who have lost their jobs.

The majority of the criticism of both the previous fee structure and a proposed new one lies in the fact that, no matter the monetary cost, unmitigated Tribunal fees will undoubtedly prevent some employees from accessing justice.

The solution, then, may be an accessible fee-waiver system which allows for financial hardship support.

Clearly in order to ensure that this does not provide a bar to low-income individuals, the Government will again have to consider:

  1. A fee exemption and/or remission scheme which employs means testing and a consideration as to when payment may be made and how.
  2. There may be further consideration given to their working status of the claimant at the point the claim is issued, as a claimant issuing a claim whilst still employed may be more likely to have the means to fund such costs as opposed to if they have already lost their livelihood at that time.
  3. The issue of the recoverability of such costs.

Could the Tribunal system benefit?

Provided any fee structure did not deter genuine cases, such a reduction in Tribunal cases may not be entirely bad.

The imposition of Tribunal fees may deter the genuinely flawed claims which are sometimes run in a system which has limited adverse costs implications, and a in particular a reduction in “nuisance value” claims.

Further, the acceptance of fees may allow the Employment Tribunal system to generate some funds in order to support and maintain it going forward, and thereby reduce the burden on the state, and we might hope fund some improvements and provide much needed resources – of course the latter remains to be seen.

How can the legal profession help?

Employment law providers may need to tread carefully as the consultation progresses and be ready to advise on the viability of cases from those considering cost as a major factor in whether to pursue a case.

We may see our work change in a number of ways should fees of any amount come into play, such as:

  1. A reduction in the Employment Tribunal Litigation.
  2. An upturn in preliminary advice as people seek to understand their position better before committing to spending.
  3. Delays in new claims being issued and a series of satellite litigation around any fees/remissions/exemptions as the system seeks to get to grips with the new measures.
  4. A change in tactics by respondents, as there was before, where in some cases they sit tight at early stages to see whether a claimant will really “put their money where their mouth is” before fully engaging with the process.

It is clear that there will certainly be a perception of vulnerability for those in the low paid roles with the imposition of fees, and it is easy to see how and why that will arise.

However, whether that will be borne out in practice will remain to be seen and it will depend on the exact level and nature of any new fee structure, any measures put into place for those on low incomes, and exactly how fees are implemented.