Will tribunal fees make a comeback?

Philip Richardson makes the case for fair and affordable employment tribunal fees

The news that the Ministry of Justice (MoJ) is considering re-introducing employment tribunal fees is the latest twist in a long-running saga. Over the course of a decade, tribunal fees were controversially introduced, became a constant talking point in the legal profession as well as among potential claimants and businesses, and were then abandoned after the Supreme Court ruled against them in a groundbreaking case.  

Now, employment tribunal fees are back on the agenda. Richard Heaton, permanent secretary at the MoJ, confirmed that ministers are working on a new scheme when he answered questions from the Justice Select Committee. 

I believe the government is right to consider reintroducing fees for employment tribunals – as long as they are set at an affordable rate that doesn’t deter or impede people from taking their claims forward.

Fees were first introduced in 2013, following much criticism that the system was unbalanced in favour of the claimant. Lord Chancellor Chris Grayling’s scheme aimed to reduce the number of malicious and weak cases reaching court.

Claimants had to pay steep fees starting at around £160 and increasing to between £230 and £950 for further hearings. In certain circumstances, claimants had to pay up to £1,200.

Over the next three years, the number of cases brought in employment tribunals plunged by approximately 80 per cent, stoking concerns about the level fees had been set. 

For many, they were simply not affordable. People who may have been unfairly dismissed or discriminated against were priced out of access to justice and could not pursue their claims, even if they had a particularly strong case.

In 2017, in a high-profile case, the Supreme Court found that the level of fees imposed by the government was unlawful and that it had acted ‘unconstitutionally’ in making the decision to introduce them.  

An overwhelming increase in claims

Fees were scrapped as a result, raising fears once again that many employees would flood the courts, bring unfounded claims and impact financially upon businesses. 

The MoJ has indicated there has been a 90 per cent increase in claims since then. This has resulted in employers having to wait almost seven months for a tribunal claim against them to be heard. 

From first-hand experience, we at Stephensons have seen an overwhelming increase in claims over the past 12 months and employment tribunals are finding it difficult to deal with the increase in demand. 

Regrettably, this has a knock-on effect. We’ve seen instances of simple applications to the court not being dealt with for many months when previously we would have had an answer within weeks. Many now feel that some sort of compromise needs to be made. 

Careful thought and debate are needed

What is needed is a new approach that is fair to both claimants and employers. The government could consider reintroducing a fee-based structure but at a much more affordable rate. 

Some careful thought and debate around this issue will strike the right balance and also force some individuals to stop and think, as well as take advice before lodging their claim. 

Mr Heaton told the House of Commons Justice Committee there were no immediate plans for fees to be introduced. 

He said: “We have to get the fee level right. I can see a scheme working that is both progressive and allows people out of paying fees where they can’t afford to… What we are not trying to do is squeeze as much income as we can out of every litigant.” 

If the MoJ is taking this approach, the new fee structure may end up being more long-lasting than its first iteration. 

Philip Richardson is a partner and head of employment law at Stephensons