What future for employment tribunal fees?

When the Scottish Government launched its Programme for Government in September 2015, it announced its intention to abolish employment tribunal (ET) fees in Scotland as part of the transfer of jurisdiction over employment tribunals to Scotland, as a means of “ensuring that employees have a fair opportunity to have their case heard”. This is a significant development for practitioners and potential users of the ET alike, not least given the dramatic falls we have seen in the number of ET claims since fees were introduced (between 50% and 90% depending on the type of claim, with an average decline of around 67% across the board for single claims).

Other than a commitment to abolish fees when “we [the Scottish Government] are clear on how the transfer of powers and responsibilities will work”, there is no schedule outlined as yet. We would expect a consultation on the matter. Therefore, while there is a commitment to consult, there are no clear plans on any future consultation or timescales at the moment.

UK-wide review

In the meantime, since June the UK Government has been carrying out its own review into the ET system and is expected to report its findings later in the year. The statement accompanying the announcement of the long-awaited review said that it would consider how effective fees have been in meeting their “original objectives, while maintaining access to justice”. The original objectives were to transfer some of the cost from the taxpayer to those who use the service, where they can afford it; to encourage the use of alternative dispute resolution services, for example Acas conciliation; and to improve the efficiency and effectiveness of the tribunal.

The Government stated, somewhat controversially at the time: “Fees are not intended to deter individuals from bringing a claim, and nor do we believe they will, given the remissions system.” Clearly the opposite has been the case, whether this was the intention or not.

We are told that the review will take into account a wide range of evidence, including tribunal data on case volumes; case progression; qualitative research on the views of court and tribunal users; and to what extent there has been discouragement of weak or unmeritorious claims. Many stakeholders have already made their views public, with Employment Tribunals (Scotland) commenting that “to the extent that it is suggested that the introduction of fees was, at least in part, to discourage weak and/or vexatious claims, one could reasonably expect that if this objective had been achieved then the proportion of claims that are successful at hearing would have risen, but in fact, according to MOJ statistics, it appears to have fallen since fees were introduced”.

Its submission concluded: “Employment tribunal judges in Scotland consider the fee system has acted to significantly reduce access to justice.” Meanwhile, the President and regional employment judges of Employment Tribunals (England & Wales) have recommended that respondents should become liable to pay response fees and hearing fees, with a nod to the model in civil litigation in Scotland. The Law Society of Scotland (LSS) made its views known as far back as July 2014, when the body urged the Scottish and UK Governments to rethink employment tribunal fees, having canvassed its members for their views on the impact of the fees.

Judicial review

Since their introduction, tribunal fees have been the subject of repeated judicial review proceedings. To date these challenges have been unsuccessful. As with the courts below it, the Court of Appeal concluded in August 2015 in respect of UNISON’s challenge to the fee regime in England & Wales that the judicial review could not succeed on the basis of statistical evidence alone. UNISON, we are told, has been refused permission to appeal by the Court of Appeal, so will be applying to the Supreme Court directly. There are no further proceedings in Scotland.

Whether the Government review or legal challenges will lead to any change in employment tribunal fees in England & Wales remains at this point unknown. However, it is anticipated that the abolition of fees in Scotland will not only lead to an increase in claims in general terms, but also may encourage “forum shopping” as those with any link to the Scottish jurisdiction will seek to bring claims here rather than in England & Wales.