What you need to know about the Supreme Court decision on Employment Tribunal Fees.

The Supreme Court abolished fees for bringing claims before the Employment Tribunal in a landmark judgement issued on 26 July 2017. The judgement is publically available on the Supreme Court website and is easy to follow notwithstanding that it deals with complex legal issues including EU law.

The case, brought by UNISON, resets the clock back to 28 July 2013 which was the day before the fees were introduced. The Ministry of Justice have indicated that they will refund any claimant who was required to pay fees during the four years that they were in force.

The fees were introduced with the aim of addressing the following points:

• Transferring the costs burden to users of the tribunals. The Court established that the fees failed to achieve their aims. The estimate of costs' recovery prior to introducing the fees was 33%. The actual costs' recovery was 13%.
• Deterring unmeritorious claims – The proportion of successful claims was found to be consistently lower since fees were introduced.
• Encouraging earlier settlements – The picture here is not straightforward. There was an increase in the number of cases referred to ACAS but which did not proceed to a tribunal claim, from 22% in 2012/13 to 80% in 2015/16. However, these figures include cases where no settlement was reached but for other reasons the claim was not pursued, including the person's view of the affordability of fees.

The fees varied depending on whether an employee was seeking to bring a Type A or B claim and whether the case proceeded to a hearing. The more complex Unfair Dismissal and Discrimination claims fell under Type B. The fees for issuing a claim and a hearing for a Type A claim were £390 and for a Type B claim £1200. When compared with fees for small claims they are greater despite the value of the claim often being equivalent to a small claim.

In some circumstances fees could be refunded or if a claim was successful the fees could be awarded against the employer and paid to the employee or, finally, the Lord Chancellor could waive fees in “exceptional circumstances”. The following statistics indicated this system was not working fairly:

• Fees Waived – Before the fees were introduced it was estimated 24% of claimants would not pay fees and 54% would get a partial refund. The total of claimants receiving a total or partial refund was only 29%.
• Payment of fees by the employer when the employee's claim was successful – A 2013 survey by the Department of Business, Innovation and Skills found that only 53% of claimants received part of their award without having to take enforcement action. After enforcement action 49% were paid in full, 16% in part and 35% received no money at all.
• Use of the Lord Chancellor's discretion – In the period 1 July 2015 to 30 June 2016 there were 86,130 claims. The discretion to waive fees during that period was exercised on only 31 occasions.

The key question for the Court to determine was whether the fees were unlawful because of their impact upon access to justice. Lord Reed made the following comment, which could be seen as a wider criticism of recent Government policy, in his judgement:

“The constitutional right of access to the court is inherent in the rule of law. The importance of the rule of law is not always understood. Indications of a lack of understanding include the assumption that the administration of justice is merely a public service like any other, that courts and tribunals are providers of services to the “users” who appear before them, and that the provision of those services is of value only to the users themselves and to those who are remunerated for their participation in the proceedings.”

The Judges were making the point that the Courts and the law deliver a greater public good than simply providing results for the individual claimants. This ethos underscores the importance of allowing claimants access to justice and that a court case must be seen as distinct from a commercial transaction.

Lady Hale who was recently appointed as the President of the Court gave a commentary in her current role as Deputy President on the discriminatory impact of the fees. She commented that females were more likely to bring discrimination claims requiring payment of the higher fee. It was noted that 57% of the Type B claims were brought by women whereas only 37% of Type A claimants were female.

The introduction of fees has resulted in a fall in claims of between 66-70%. The Court ruled that taking into account the nature and value of Employment Tribunal cases, the level of the fees imposed, the failure of the fees to achieve the aims for which they were imposed and the resultant drop in claims that the fees themselves had the effect of preventing access to justice.

Stephen Britton – Partner specialising in employment law at Sills and Betteridge commented:

“The Supreme Court judgement is very significant and may see a return to a greater number of claims to the Employment Tribunal. The judgement makes for very interesting reading for any employee thinking of taking a claim and for employers and HR professionals acting as respondents. The judgement reveals that despite the decrease in the volume of claims the percentage of successful claims actually decreased. Time will tell whether the repeal of the fees will have any longer term effect on reducing the number of claims or whether they will return to pre-July 2013 levels.