Justice may come at a price

July 19, 2012 12:03 pm Published by

Employees to pay fees for Tribunal Claims

It looks as if, from late 2013, people who want to bring an Employment Tribunal Claim will have to come up with a fee, which they may get back if they win. The aim is to save some of the swelling cost of the system we have at present, where a claim is made without any fee. Will fees put people off? We shall see.

At the moment, an employee, or ex-employee can bring a Claim in the Employment Tribunal without paying a penny towards the cost. If they have insurance or choose to go it alone then they will not have legal costs either. To be fair, the employer has no fee to pay to the Tribunal, though the inevitable costs in time and usually legal costs in putting in a Defence can be painful.

The cost at present of processing and dealing with a Claim falls on the taxpayer. As soon as a Claim is registered, an ACAS employee is allocated, who has the task of trying to get the parties to settle so that the Tribunal does not have to deal with it any more. However, with many Claims not settling, the costs to the taxpayer are very high and the Government is determined to try to cut the number of Claims brought. Saving employers costs and hassle is part of the reason, but the main motive must be the saving of public money.

So, the matter of fees has been raised again. Charging a fee to bring a Claim would not only contribute to the cost of dealing with it, but also put some people off. At present, unless they have legal fees, an employee has no financial reason not to have a go a Claim, perhaps to make the employer account for their actions, and also to see if some money can be squeezed out of the employer on the basis that it is better to pay a small amount to stop the claim than to pay to fight it all the way. In the Tribunal costs are hardy ever awarded against the side that loses, unlike in the civil courts, so there little risk in having a go against an employer. Occasionally some costs are awarded against an employee if the Tribunal thinks the claim is very unlikely to win or is deliberately not being dealt with properly, but this is rare and certainly not enough to be a general deterrent.

Fees up front for a claim would make people put their money where their mouth is and make them think twice about how much they believe in their case. It will off course put some people off who have been treated unlawfully and who have a good claim. However in other areas of our justice system, like debt recovery in the County Court, fees are payable and there is no perhaps no logical reason not to extend this to Employment Tribunals.

The Ministry of Justice has published its response to its consultation on charging fees for bringing claims in the Employment Tribunal. The Government’s intention is to introduce such fees in the second half of 2013. Fees will be charged in two stages, the first at the issue of the claim, and the second before the hearing. In addition, tribunals will be given the power to order the losing party to pay any costs of the successful party incurred by way of fees, adding to the potential risks for both sides.

The proposed fee structure has two levels of fees, each with two stages.

  • Level 1 claims are generally the more basic factual claims for money, such as unauthorised deductions from wages and redundancy payments. These claims would carry a fee of £160 when the claim is issued and a further £230 at the Tribunal hearing stage.
  • Level 2 claims are those involving more complex matters, including unfair dismissal, discrimination and equal pay. These claims would carry an issue fee of £250 and a hearing fee of £950.
  • There is a fee structure for multiple claims which are dealt with together, often brought by Trades Unions. These Claims would be charged a multiplier of the fee for single claims e.g. claims involving more than one and up to ten claimants would be charged twice the fee for a single claim.
  • A remission system will mean that those on low incomes will not have to pay fees at all. The remission system will operate as part of the Government introduction of universal credit. The aim is that those who can afford to pay fees do so, while those cannot afford it remain able to bring a claim. The ‘cannot afford’ band is likely to be pitched at a very low level of savings and income.

Given the concerns raised by employers in relation to fees, the Government has said that it will consider the remissions system in a wider review required for the universal credit’s introduction. The review is intended to produce a single, simpler, remissions system for courts and tribunals which is more cost efficient and ensures that those who can afford to pay fees do so, while those cannot remain able to access justice through the courts and tribunal system.

The Government is bringing in fees to encourage parties to think through whether a formal claim needs to be lodged at a tribunal, or whether it can be settled informally via mediation or conciliation etc. They want tribunals to be ‘used as the option of last resort to resolve employment disputes’. This is moving towards the same sort of emphasis as is found now in the Family Courts, encouraging alternative ways of resolving disputes and saving the huge public expense of formal justice.

Making people gamble some of their own money will mean that many will prefer to settle rather than risk losing not just their case but some of their money – for a losing employer, money towards the employee’s fees in addition to any compensation awarded by the Tribunal; and for a losing employee, the money they paid in fees to bring and continue with their claim. Many may think it is not worth the candle and just walk away – right or wrong.

The above is general comment only. For specific advice contact Frances Barker, Employment Partner at Blocks Solicitors on 01473 343911 or frb@blockslegal.co.uk.

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This post was written by Frances