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Insufficient evidence to back employment tribunal fees in current form, MPs say

"Substantial changes" to the current employment tribunal fee regime are required if an appropriate balance is to be struck between meeting some of the costs of operation and maintaining access to justice, according to an influential committee of MPs.

The cross-party House of Commons Justice Committee was particularly critical of the government for not having yet published the findings of its post-implementation review of the impact of the new fees, which began last June. It said that the "timing and scale" of the drop in cases brought to the tribunal since fees were introduced in July 2013 indicated that the introduction of the fee regime was substantially to blame.

"Where there is conflict between the objectives of achieving full cost recovery and preserving access to justice, the latter must prevail," said Conservative MP Bob Neill, chair of the committee.

"The Ministry of Justice has argued that changes to employment law and the improving economic situation, as well as the pre-existing downward trend in the number of employment tribunal cases being brought, may account for part of the reduction in the number of cases. These may indeed be facts but the timing and scale of the reduction following immediately from the introduction of fees can leave no doubt that the clear majority of the decline is attributable to fees," he said.

The committee said that it was unable to make firm recommendations for reform of the rules as the government had not supplied any of the factual evidence uncovered by its review when requested by the committee. However, options such as reducing the overall level of fees and increasing the thresholds for fee remission, as well as replacing the "binary" categorisation of claims with a sliding scale of fees depending on the complexity of the case, should be considered, it said.

"Special consideration" should also be made in the rules for women alleging maternity or pregnancy discrimination, reflecting the fact that there had been a 40% drop in this type of claim since fees were introduced, the committee said.

Employment tribunal fees were introduced on 29 July 2013, partly to transfer some of the costs of operating the tribunals from the taxpayer to those that use the service. Parties now have to pay an upfront fee to raise a claim, followed by a further 'hearing fee' once the case is referred to a tribunal. Claims are subdivided into the administratively simple 'Type A' claims, with fees of £160 and £230 respectively; and 'Type B' unfair dismissal or discrimination claims, with fees of £250 and £950. Flat fees apply to employment appeal tribunal (EAT) cases.

A remission system operates to exempt people on low incomes from having to pay the full fees, while the introduction of the new rules also coincided with a new requirement for mandatory conciliation via the government-backed Acas service before a case can proceed to tribunal. However, the committee head that the number of cases brought to the employment tribunals had fallen by 70% since fees were introduced. Statistics provided by the Trade Unions Congress (TUC) and Unison showed unfair dismissal claims had fallen by 72%, breach of contract claims by 75% and sex discrimination claims by 68%, the committee said.

Earlier this year, Unison was given permission to take its legal challenge to the fee regime to the Supreme Court. Although its case was dismissed by both the High Court and the Court of Appeal, judges at both levels have been sympathetic to arguments that the level of fees had prevented some people from bringing arguable claims against their employers or former employers to the employment tribunal.

In its report, the committee emphasised that it had no objection to the principle of introducing "some degree of financial risk" for those considering legal action, and noted that the budget of the Ministry of Justice was not protected from government spending cuts. However, it said that there had to be a "clear and justifiable relationship in the fee system" between these factors and the degree of financial risk that those bringing claims should be asked to bear, particularly in cases where the level of the fees covered or exceeded the full cost of operation of the particular court or tribunal.

The government should also review the effect that the April 2015 increase in fees for money claims had had on the international competitiveness of London as a litigation centre, and reverse its recent increase in the divorce petition fee, the committee said.

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