Claimants' ability to pay tribunal fees will be based on combination of income and savings, Government confirms

Out-Law News | 10 Sep 2013 | 2:26 pm | 2 min. read

A single system of fee remission, based on a combination of claimants' income and "disposable capital", will be introduced across all courts and tribunals, including employment tribunals, the Government has announced.

In a written ministerial statement, Justice Minister Helen Grant said that the new system would "provide a better, targeted, fairer and easier to use system which ensures access to justice for those unable to afford a fee".

The new remission system that the Government proposes to take forward has been slightly changed from that it consulted on earlier this year. The final plans include a slightly different capital test for those of retirement age, and make it clearer what types of savings will be considered or disregarded.

The new system will be introduced on 7 October, according to the Justice Minister.

Under the current system, fee remission is automatic for those in receipt of certain qualifying means-tested benefits or whose income is below certain thresholds. Under the new system, claimants will need to meet two tests: an income test, which will be the same for every court and tribunal and will require a greater contribution from fee-payers; and a disposable capital test.

In the response to its consultation on proposals for a single fee remission scheme (60-page / 317KB PDF), the Government said that the majority of respondents had agreed that the introduction of a disposable capital test was reasonable. Those with savings of between £3,000 and £8,000 will be expected to spend no more than one third on a fee; and those with £8,000 or more will be expected to spend no more than half on a fee.

"If an applicant has disposable capital (e.g. savings) available to them, it is appropriate that they are expected to spend a portion of this capital before seeking taxpayer funds," it said in its response.

"We do not consider that the disposable capital test will penalise savers, as was suggested by some respondents; rather, we believe it will ensure that remissions are targeted at those who are unable to afford a fee due to low levels of disposable capital and income. It is unreasonable to expect taxpayers to continue to subsidise those with the funds available to pay a court or tribunal fee," it said.

Some respondents suggested that certain groups, such as older users, should be exempt. The Government disagreed that over 60s should be fully exempt from the capital test, but agreed that "pensioners are less able to replenish capital than working-age applicants". For this reason, applicants aged 61 or over will not be expected to pay a fee if they have less than £16,000 in savings and meet the income test.

The new single gross monthly income test will apply to applicants who pass the disposable income test. Under this second part of the test, single claimants with no children will be entitled to full fee remission if their gross monthly income is below £1,085. Different income thresholds will be applicable to those with children, and those who are part of a couple. Applicants whose gross monthly income is over the relevant threshold will be required to contribute £5 towards their fee for each additional £10 of income above the threshold, up to the value of the fee. An applicant whose gross monthly income is over £4,000 above the relevant threshold will not be eligible for any remission.

Applicants will not be required to provide proof of their disposable capital, unless asked to do so by the court or tribunal manager. They will still be required to provide evidence of net monthly income, but the evidence requirements will be simplified to either documentary evidence of a qualifying benefit, or three months' worth of bank statements and payslips.

The Government introduced fees for bringing a claim to an employment tribunal or the Employment Appeal Tribunal (EAT) at the end of July. Under the new structure, parties have to pay an upfront fee to raise a claim with a further 'hearing fee' once the case is referred to a tribunal. Flat fees apply to EAT cases.