Please click here to read the consultation in full.
History of tribunal fees
Fees were previously charged for ET claims from 29 July 2013 until they were quashed following the Supreme Court Judgment in R (on the application of UNISON) v Lord Chancellor [2017] UKSC 51 in July 2017. The Supreme Court held at that time that:
- The fees were unaffordable in practice;
- The charging of fees meant that it was worthless to pursue low value claims or claims seeking non-monetary judgments; and
- The fee structure was indirectly discriminatory towards those with protected characteristics, including race, sex and disabilities.
At the time, ET fees fell into Type A claims, including simpler disputes that took up limited ET time, and Type B claims, which included more complex claims such as discrimination or whistleblowing. In Type A claims, issue fees cost £160 and hearing fees cost £230. For Type B claims, issue fees were £250 and hearing fees were £950. An appeal to the EAT cost £400 for issue fees and £1,200 for hearing fees. Since 2017, the ET and EAT have not charged fees at all.
Why reintroduce fees?
Currently, Employment cases are among only a number of areas of law for which fees are not charged. The purpose of charging fees for legal cases has always been to reduce the burden on the tax payer to maintain the justice system. At present it costs approximately £80 million per year to run the ET and the EAT and £58 million to fund ACAS.
The Government also seems to be aiming to reduce the number of ET cases. The consultation announcement highlights that case numbers have increased from around 18,000 per annum in 2016/17 to 33,000 in 2022/23. The hope is that the introduction of fees may result in more parties settling claims early in ACAS early conciliation, so as to avoid having to issue a claim.
What's changed?
The big question is whether or not the Government can sufficiently address the issues highlighted in the Unison case in 2017 in order that the any reintroduced fees are not quashed again. It has explained in its proposal how it hopes to achieve this aim.
Ultimately, the consultation proposes introducing modest fees for the ET and the EAT. Although the consultation refers to this being aimed at employers, employees, trade unions, employer organisations, representatives and other interested parties, as Claimants will be paying the fees, this will affect employees more than anyone else. The consultation is purely investigating the level and structure of fees, not taking account of whether or not fees should be paid in the first place. This suggests that it is likely that fees will be reintroduced soon.
Affordability
The Government has recognised that the fees previously in place did not strike the right balance between reducing that tax payer's burden and ensuring that justice remains accessible. They have also identified the need for a simple system that does not impact on the economic balance between the parties. For this reason, the current proposal is for there to be just one tier of fees and only an issue fee to be charged. The current proposal is for ET and EAT cases to be charged at £55 respectively.
In addition to this, the Government has identified a number of specific types of cases in which a fee will not be charged based on specific technical reasons, rather than any economic basis.
The Government has also confirmed that Claimants will also be able to apply for a fee remission through the Help with Fees scheme. This applies to low income households where they pass a low disposable capital test and can result in either a partial or full fee remission.
Impact of the changes
The Government has said that it believes that this would result in a reduction of cases by 20% and would generate an income of £1.3-1.7 million per annum from 2025/26 onwards.
It is clear that the fees are significantly more modest than under the previous scheme and should be affordable in most cases. At £55 per case and the remission scheme, it seems realistic to suggest that the Government has addressed the issues of affordability and whether it is worthwhile pursuing a low value case.
However, there still remain certain issues that could render the scheme ineffective or unlawful:
- The scheme may not be economically worthwhile: By the Government's estimations, the scheme would reduce the bill to the tax payer by approximately 2% only. Considering the costs of the consultation, setting up and administering the scheme, there seems a strong possibility that it will cost more to run the scheme than it would generate. This also does not take account of the potential that this could result in delays to claims being lodged or potential strikeouts due to non-payment of fees, which could well result in additional Tribunal time being needed to address such issues. Another factor is that fee remissions would still mean that cases are paid for by taxpayers, meaning that the scheme could amount to a false economy.
- Discrimination: The proposal is silent as to how it eliminates the risk of the scheme being found to be discriminatory again. Furthermore, the Equality Statement specifically identifies that those who are not white British, disabled or older are likely to be adversely impacted due to indirect discrimination relating to their protected characteristic by the introduction of fees. While the Government points out that any review of the fees would find the indirect discrimination to be justified by the policy aims of reducing the costs of running the ET and the EAT, if it were to arise that no saving was achieved by the scheme, such justification would not apply.
Authored by Ben Mordey
