No new legal challenge to tribunal fees as consultation ends

The government’s consultation on bringing back employment tribunal fees has closed with no sign yet of a fresh legal challenge to the policy. Trade unions, and Unison in particular, had been warning that the proposed scheme is impractical and discriminatory. The consultation closed on 25 March but trade unions so far appear to be taking a ‘wait and see’ approach. 

A reminder. The government is proposing to reintroduce fees for employment tribunal claims nearly seven years after the Supreme Court quashed the previous charging regime ruling it to be unlawful following legal action brought by trade union Unison. The government is proposing a modest £55 fee to issue any claim at an employment tribunal and, unlike the previous regime, there would be no additional hearing fee. The government says reintroducing fees would help to fund the under-resourced tribunal service, incentivise parties to settle disputes at an early stage and encourage better engagement in Acas early conciliation. 

The Law Society Gazette reports on this with their headline ‘No new legal challenge on tribunal fees as consultation closes.’ Shantha David, Unison’s head of legal services, told the Gazette: ‘The new fees scheme is embarrassingly unbalanced between workers who must pay fees and employers who are not required to pay any fees at all. A better starting point would be ‘the polluter pays’ with a focus on the early resolution of problems at work, the extension of limitation to bring claims - which would take the pressure off all parties and the tribunal - and the enforcement of successful tribunal claims, which is a particular issue which must be addressed urgently.’  Unison is not commenting on the prospect of a fresh legal challenge to a new fee scheme.

Meanwhile, Justice minister Mike Freer MP has restated the government’s position. He said: ‘The Ministry of Justice has carefully considered the 2017 Supreme Court ruling on the previous approach to fees in the Employment Tribunals and has endeavoured to ensure that the fees proposed in this consultation are proportionate and affordable, in line with the judgment.’

The government has previously indicated that tribunal fees could be brought back as soon as November of this year, so let’s consider that possibility. Earlier, I spoke on the phone to employment lawyer and experienced tribunal user, Rebecca Sulley. First question, why does the government want to bring fees back?”:

Rebecca Sulley: “The government's proposal to introduce fees is based on a number of different reasons, one of them being the fact that it costs a huge amount of money to run the tribunals and the EAT system. I think, in 2022-2023 that was £80 million so what they're looking to do is have tribunal users make a small contribution to running that system in the hope that they can improve the admin, the technology, and improve usability of it. I think they're also looking to try and make sure that things are resolved early on, if they can do, through Acas and they're also mindful of the fact that in the civil courts you've had to pay fees for a very long time to bring a claim so it puts the tribunal on a similar footing to the civil courts. What they're hoping to do is generate fees of around £1.3 million to £1.7 million, which is still only really a very, very small proportion of how much it actually costs to run the tribunal, so it will be interesting to see in practice whether it actually makes a difference to improving the tribunals and the experience that people get from bringing a tribunal claim, but given the actual amount that the tribunal are proposing to charge is so significantly lower than it previously was I'm not sure whether it will have such a huge impact on the claim numbers as the previous system. Certainly, I don't think we'll see the drop anywhere near the 50% that we saw previously, but it will still be interesting to see how unions react, how claimants react. There's clearly an issue, still, about whether it's indirectly discriminatory against women and against individuals who have protected characteristics because that was exactly why the Supreme Court determined that the fees were unlawful in the first place. So, we may still see challenges coming through as a result of it if they do introduce the fee system and we also potentially might see more joint claims because the £55 fee is per claim and if there are a number of claimants bringing one consolidated claim then it's still that £55. So, we might see in things like redundancy exercises, or TUPE transfers, more claimants joining up, potentially, to bring a claim. So, we'll have to wait and see what impact it has if it does get through.”

Joe Glavina: “You’ll remember the impact fees had in that period between 2013-2017. How do you think the new fees regime compares from a client’s perspective?”

Rebecca Sulley: “So, from a client's perspective, we saw from the previous introduction of fees back in 2013 a massive drop in tribunal numbers for all of our clients which was obviously quite welcome, in many respects, because it drove down the number of spurious tribunal claims, but we did see a lot more discrimination being added in to really warrant the fact that they're having to pay quite a large fee to put in their claim. So, we saw a huge reduction and I believe that the case volumes actually fell by half after the introduction of those fees. Now, these fees being introduced are obviously quite a lot lower than the fees that had been introduced back at that time so I don't anticipate that there will be such a drop in claim numbers so I don't think our clients will see a massive difference. What they might see is, perhaps, more willingness from claimants at an early conciliation stage to accept an offer. Clients might be slightly more willing to settle at that stage because they'll have to factor in the fact that they will, undoubtedly if they need to settle at tribunal, they would have to pay the issue fee that the individual has lodged. So, we might see more of an emphasis at an early stage on Acas early conciliation, but I certainly don't think we will see a huge drop in claim numbers coming through as a result of these new fees.”

Joe Glavina: “Last time we chatted, Becki, you talked about the long delays in the tribunal system with clients waiting a very long time to get cases listed and you said you’d noticed a willingness on the part of clients to try mediation to resolve the dispute. Is that still the case?” 

Rebecca Sulley: “So, my recent experience with mediation is that clients are actually quite willing to take part in mediation for a number of reasons, really. So, one being the fact that a lot of tribunals, especially those down south, are listing hearings still 18 months, two years, away from when the actual events took place and because, generally speaking, turnover is higher, especially in this kind of generation, we are seeing a lot of people leaving employment and therefore not willing to give evidence at these hearings. So, we do find clients are quite interested in mediation to account for the fact that they might not have key witnesses available, but also to account for the fact that tribunals are invariably listing hearings for longer than they ever used to. So, whereas we used to see a lot of one-to-three-day hearings, typically now they are five days or more where you have discrimination involved and that really drives up fees so there is more incentive for the client to enter into judicial mediation. One of the things that I have found, though, is that we do find a lot of claimants are becoming increasingly unrealistic in their expectations and we also find that that's quite helpful to suggest mediation to them because then you have a judge who is able to give them a bit of an insight as to what a more realistic level of compensation might be. So, we have certainly found an increase in people interested in judicial mediation and some tribunals are still taking part in the trial for alternative dispute resolution, which is a mandatory short mediation just before the tribunal hearing itself. So, once the whole case is prepared, once you've done your witness statements, the judge will have a mandatory meeting with both parties to give a bit of an assessment as to whether they think the claim is one that will be won or lost, and also to encourage the parties to have a kind of last-ditch attempt at settlement. So we are seeing that on the increase as well.”
The government’s consultation paper suggests that, if implemented, fees may become payable from November 2024. It is unclear whether Labour, if they came to power, would reverse this policy so that is a possibility and might help explain Unison’s current stance. Meanwhile we await the government’s response to the consultation and as soon as they publish that we will come back to this and get more reaction. 

LINKS
- Link to government’s consultation on employment tribunal fees