Do tribunal fees need to be brought back?

With claim charges back on the government’s agenda despite the Supreme Court ruling them unlawful, Adam Penman explores whether a compromise could be reached

In 2013, the government introduced fees to bring a claim to the employment tribunal, primarily to reduce the number of vexatious and weak cases. The fees, which ranged from £160 to £1,200, were seen by some – particularly small businesses shaking off the impact of a recession – as a shield from effectively being coerced into settling illegitimate claims simply to mitigate the costs of defending such claims. The impact of the charges was dramatic: over three years there was a 79 per cent reduction in claims being filed.

In 2017, the Supreme Court ruled that the government was acting unlawfully and unconstitutionally by introducing the fees. In particular, the court found that the charges were indirectly discriminatory because a higher proportion of women would seek to bring discrimination cases, and lower-income employees would have to jump the fee hurdle to access justice. Following the Supreme Court decision, the government pledged to repay up to £32m in tribunal fees to claimants.

A reduction of resources in the tribunal system inevitably followed the shrinking of the caseload but, since the abolition of the fees, the number of claims being filed has surged. This has led to an overload in the tribunal system and in long delays, sometimes of up to a year between filing a claim and the date of a hearing (the average time for claims to be heard in the UK is eight months). It is not uncommon for key witnesses to move on or for memories of events to become blurred in this time – justice delayed is simply justice denied.

The Ministry of Justice confirmed late last year that there had been a 90 per cent rise in claims since the scrapping of the charges. The burden this increased caseload has placed on the tribunal system and the resulting restraint on its ability to deliver timely justice has provoked further debate within the Ministry of Justice, which is seeking to strike a better balance between protecting claimants’ interests and their ability to access justice and ensuring there is a viable infrastructure in place to deliver it. 

The existing tribunal system is funded by the taxpayer and it is questionable that they are getting value for money – the Ministry of Justice is considering alternatives to the status quo. Alternatives include a more sophisticated system of tribunal fees; for example, means testing fee applications or reintroducing much lower charges. 

The Supreme Court ruled that the fee regime established in 2013 was unlawful, but not that the application of any employment tribunal fees would be unlawful. Ultimately, any reintroduction of charges would need to comply with the Supreme Court judgment and ensure that the shortcomings of the fee structure previously implemented are addressed. Any new fee structure would need to serve the purpose of focusing a potential claimant’s mind, with a view to reducing the volume of weak cases, and be affordable enough that it would not be prohibitive for individuals on lower incomes.

Adam Penman is an employment lawyer at McGuireWoods