Law Society and employment lawyers round on tribunal fee proposals

The government’s proposed fees for bringing claims in employment tribunals and Employment Appeals Tribunals will create a barrier to justice, the Law Society has claimed.

The Employment Lawyers Association has also warned that the proposals “could backfire” by creating a system that is expensive to administer.

In a consultation paper published in December 2011, the Government set out two options for consultation:

• Option 1: For a single claim, claimants would be charged a fee of between £150 and £250 (depending on the level of complexity) to lodge a claim and a further £250 - £1250 if that claim reaches a hearing. Further fees would be chargeable for additional demands on the tribunal service. The number of claimants would also affect the fee.
• Option 2: Rather than splitting the fees for issuing a claim and requesting a hearing, there would be a single fee of between £200 and £600 for claims under £30,000 depending on the perceived complexity of the claim and £1750 for larger claims, to be paid by the claimant. This would cover both costs of issuing proceedings and the cost of a hearing.
Further fees would be chargeable for additional services. Unless the £1,750 fee for larger claims is paid, the tribunal will not be able to award compensation greater than £30,000, no matter what the loss assessed.

Commenting on Chancery Lane’s submission to the government consultation, Law Society President John Wotton said: “Many people who have just lost their job and are facing financial uncertainty will be unable to pay fees of between £150 and £1250.

“The inevitable effect of introducing fees will be to deny such people the right to have their case heard in a tribunal. Access to justice in employment matters will be confined to those with the means to afford these fees.”

The Government has argued that the introduction of fees would transfer the cost of the tribunal system to users and encourage the resolution of disputes without having to go to tribunal.

The consultation suggests that the fee remission system for users of civil and family courts in England and Wales should be extended to the proposed fee structure in employment tribunals.

The ELA meanwhile expressed disappointment that the Government had not offered any opportunity for consultation on the principle of charging fees (the consultation only covers implementation).

The ELA also outlined a number of points of concern with the proposals. These included that:

• The consultation seriously underestimated the practical difficulties for claimants (many of whom had no realistic prospect of obtaining advice prior to lodging a claim) of identifying the correct fee, assessing their eligibility for remission of all or part of the fee and providing the documentary evidence they would need to support an application for fee remission;
• The administrative burden on ETs in dealing with payment and remission of fees was seriously underestimated, “undermining the aim of saving taxpayers money”;
• The process, as outlined, demanded an estimate of the fee to be paid to be made before the claimant had had a chance to explore the weight of their claim, how long it might take to pursue and other factors that could affect costs;
• Claimants might therefore underestimate their claim value, pay a lower fee and either be barred from receiving a just settlement in terms of the award paid or face a penalty for paying the wrong fee at the outset; and
• Proposed time limits around fee payments ran the risk of satellite litigation if legitimate claims were excluded by application of the collection process;
• As regards Option 2, the ELA doubted whether the Government could devise a loss calculator “sophisticated enough to take account of factors such as mitigation of loss, loss of pension rights, injury to feelings awards and the like, without which unrepresented claimants could not produce a reliable schedule of loss, as would be required, at the start of the claims process”;
• Claimants needed experienced guidance to assess accurately the fee they should pay but the ELA feared that with with Law Centres and Citizen Advice Bureaux under pressure from reduced funding and government proposals to withdraw legal assistance in employment cases, claimants would have nowhere to turn for the advice they needed;
• The charging of fees in multiple cases had not been thought through properly and risked resulting in “unintended, potentially, unfair” outcomes;
• Some proposed fees were disproportionate to those charged in civil courts;
• The threshold of £30,000 proposed in Option 2 for a step-change in fee level was artificial. “The higher value may have more to do with the salary level of the claimant than the complexity of the case. Lower value claims can be complex, costing more to administer”; and
• The fact of a fee payment might lead to an expectation of service level from the claimant “which, at a time when under-funded ETs are already struggling to cope, would be counter productive”.

Peter Wallington QC of 11 KBW Chambers and Paul Statham of Pattinson and Brewer, joint chairs of the ELA sub committee which examined the proposals, said: “The Government is in danger of implementing a fee system which will be expensive to administer, generate relatively little revenue. At the same time they risk excluding legitimate claimants from the tribunal system, either because they do not fully understand the new fees requirements, or because they simply cannot afford the cost of bringing a claim, but do not qualify for remission of the fees.

“We are also concerned about the possible disproportionate impact fees will have on the already disadvantaged, and the likelihood that the fee regime will result in cases being less easy to settle without a full hearing, precisely the opposite of what the Government seeks, and we would endorse, as a policy.”

Philip Hoult