Surprise at low uptake of employment tribunal refunds

23 Jan 2018 By Emily Burt

Only £1.8m paid out so far, as government launches ‘reform’ consultation that may lead to cuts and closures in tribunal provision

The first official analysis of the initial level of claims for employment tribunal fee refunds following their abolition in July 2017 suggests uptake has been slow – but experts warned the government will have to pay more out in coming months.

The Ministry of Justice (MoJ) received more than 4,500 applications for tribunal fee refunds between October and December 2017, after the Supreme Court ruling that the fees were unlawful led to their abolition and the launch in October 2017 of a refund scheme for eligible claimants.

The government said it had so far refunded 2,151 payments to claimants, totalling £1,808,310, according to newly published figures by the Ministry of Justice. 

Following the Supreme Court ruling, it was estimated that the government may have to repay up to £33m overall in refunded fees to claimants who paid for employment tribunal claims between 29 July 2013 and 26 July 2017. Based on the initial uptake rate, the government could expect to refund around £10.8m during 2018.

Laurence Anstis, director at employment law firm Boyes Turner, said the initial refund statistics were lower than expected because it was still “early days so [the government] may not [yet] have reached everyone, but there is an awful lot more that was paid in tribunal fees, and thousands of claims where fees were paid”, he told People Management

“Not every claimant will get around to reclaiming their money, but those that have come in so far are just the tip of an iceberg.

“I believe the tribunal was supposed to write to claimants inviting them to claim their money back, so I’m surprised it’s so low at this point. There should be much more to come.”

Richard Fox, Kingsley Napley partner and head of employment practice, said the initial low uptake could be down to a lack of understanding over the tribunal system. “I think there was a degree of confusion in the aftermath of the Supreme Court decision, and it was not clear at first how the refund programme would work – whether claims should be made by individuals or lawyers acting on their behalf, or those who had paid fees via a settlement arrangement,” he said. 

“The government estimated they could pay back up to £33m in refunds, and I do expect more fees to be reclaimed, but of course people move on and have other things to think about besides claiming back their fees.

“A greater focus in the coming months is likely to be the number of applicants being issued to tribunal, and how the HM Courts & Tribunals Service and the MoJ will provide increased resources to cope with those numbers.”

The overall number of claims taken to tribunal rose by 66 per cent in the three months after the fees were abolished in July, statistics released by the Courts Service in December 2017 found. 

The conciliation process may also affect the number of employment tribunal claims being brought. Official employment relations service Acas reported in early January that demand for its early conciliation service rose by 20 per cent in the two months after fees were abolished. Acas estimated that the number of tribunal claims had risen 60 per cent during that period compared to 2016.

The figures follow the launch on 18 January of a new government consultation to change the justice and tribunal system, including proposals to move more services online and close tribunals and courts, as it is claimed the need for physical locations will be reduced.  

In its consultation documents, the government emphasised the need to ensure it is “spending public money well”, with plans to shut public buildings it feels are not needed and increase online and virtual court services.

While employment law cases may be “at the back of the queue in terms of this new transformation”, the Employment Lawyers Association had commented on how online courts could affect employment work, Fox said. 

“I think this will become an increasing feature for employment lawyers – it may not come immediately because the latest consultation paper doesn’t focus on employment work, but tribunal work will be in the queue and there is likely to be more of a clamour to get some of these employment cases held online,” he added.

Justice minister Lucy Frazer said: “As we increase the use of digital services, it makes sense to consider the wider role and need for court buildings and assess whether some are still necessary to provide effective access to justice. 

“Where physical courts are to close, every penny raised will be put back into funding changes that will make justice easier to access for all at the same time as offering protections for the most vulnerable.”  

In a unanimous judgment of seven Supreme Court judges in July, Lord Reed said that employment tribunals “are intended to provide a forum for the enforcement of employment rights by employees and workers, including the low paid, those who have recently lost their jobs and those who are vulnerable to long-term unemployment”. 

The fees, the judges concluded, were unlawful as they prevented access to justice and were indirectly discriminatory towards women, who were more likely to bring a more costly and serious Type B case than a Type A case. The fees also contravened EU law, the judges found.

In the light of the decision, the lord chancellor had to quash the fees order that introduced the fees, which could amount to as much as £1,200 for a single claim, and issue refunds to those who paid to bring a case. At the time, Unison said these refunds would amount to more than £27m.

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