The Ministry of Justice (“MoJ”) has launched an open consultation to discuss the possible reintroduction of Employment Tribunal fees. It is proposed that claimants should pay a £55 fee to issue proceedings in either the Employment Tribunal (“ET”) or Employment Appeal Tribunal (“EAT”) in each jurisdiction. The benefit of doing so may, among other things:
- relieve some of the costs on the general taxpayer;
- incentivise parties to settle disputes in an ‘out-of-court’ setting;
- better utilise the ACAS early conciliation procedure; and
- alleviate the pressures that the Tribunal service is currently facing.
This news may come as an unwelcome surprise to many, particularly given the Supreme Court's decision in R (Unison) v The Lord Chancellor (2017) which declared the use of Tribunal fees to be unlawful. The Court found that, in practice, the fees were unaffordable and rendered the pursuit of non-monetary and low value claims futile thus preventing one’s access to justice. However, this was when the Tribunal fees were considerably higher than £55.
Prior to the Supreme Court’s decision, a claimant either had (i) a Type A claim (i.e., simple disputes such as holiday pay), (ii) a Type B claim (i.e., complex disputes such as discrimination) or both.
In total, Type A claims typically cost £390 and Type B claims, £1,200. Furthermore, if a party was dissatisfied with the ET's decision, they could refer the point of law on which they believed the ET had erred but would need to pay £1,600 (total) in court fees. Of course, there would be no guarantee they would win their appeal.
These immediate out-of-pocket expenses were only a fraction of what claimants would have had to incur - they also had a legal team to instruct, assuming they could afford to do so. Even if they instructed a lawyer who was willing to take the case on a no win no fee, the Tribunal fees generally still had to be paid up front by the individual. If they then won their claim, unlike in the Civil courts, (where the loser pays) each party would bear their own costs and this position has not changed today.
An important lesson from the UNISON case is that the Tribunal service must be affordable. After all, its purpose is to offer a more informal and cost-effective forum for employment disputes to be resolved. Typically, a person will have three months to issue their claim (six months for equal pay and/or statutory redundancy pay claims) before they are deemed time barred. That is not a lot of time for the average person to, after paying their usual outgoings, save up the necessary funds to bring an ET or EAT claim, particularly for those who are struggling financially anyway.
Under the proposed fee regime, the MoJ opines that £55 is “generally affordable”. But, to ensure that access to justice is not impeded, plans to reform the ‘Help with Fees’ remission scheme will be made in order to offer targeted financial assistance to those in need.
Regardless of financial standing, the key question for any prospective claimant to ask is whether the cost of running a piece of litigation is proportionate to the value of their claim, especially if they are bearing their own costs. In the majority of cases, it may be simpler and more efficient to settle such disputes ‘out-of-court’. And, that seems to be the MoJ's desired outcome. However, in cases that are so serious, where the only appropriate course of action is to rely on the Tribunal service, it would be a sad day indeed to see claimants, with genuine whistleblowing, discrimination, or any other claim that served in the public’s interest, being dissuaded from issuing legal proceedings due to financial constraints. However, from an employer's perspective, to make claimants think before they issue would be no bad thing.
On the other hand, the Tribunal service is struggling, particularly with the backlog of cases caused in no small part by the COVID-19 pandemic. The unfortunate truth is that the Tribunal service is not adequately funded to deal with the demands placed upon it. Some positive news is that the MoJ estimates that the reintroduction of fees will generate between £1.3million - £1.7millon (less Help with Fee remissions) on year-by-year basis starting in 2025/2026.
In the grand scheme of things, this is not a lot of money but it may help right the ship. While the paper provided no outline of an investment plan, it has been suggested that these fees will be allocated to parts of the Tribunal service which are in desperate need of funding. In turn, it is hoped that this will enable the Tribunal to focus on administering justice in a fair, balanced, and proportionate manner.