Government proposes new Employment Tribunal fees
By Denis McGettigan:
The Justice minister Jonathan Djanogly has announced formal
proposals to introduce fees for applications to the Employment
Tribunal which will bring the Tribunal in line with other courts
that currently already have a similar fee requirement.
The proposals are:
- A: an initial fee of between £150-£250 for a claimant to begin
a claim, with an additional fee of between £250-£1250 if the claim
goes to a hearing, with no limit to the maximum award; or
- B: a single fee of between £200-£600 - but this would limit the
maximum award to £30,000 - with the option of an additional fee of
£1,750 for those who seek awards above this amount.
In both options the tribunal would be given the power to order
the unsuccessful party to reimburse fees paid by the successful
party.
It is difficult to say which option (if any) would be better for
claimants, it is true to say that many cases do settle before a
hearing but the reality is that this can be as late as the day
before, or even the morning of the hearing.
By this time if it was option one then the claimants would have
incurred two fees already amounting to over £1000. This is clearly
unacceptable for many cases as they are simply even at their
highest not worth this amount, so there would be no point in last
minute settlements as the claimant will need to continue to a
hearing in the hope of a costs order against the respondent, unless
the respondent accepts the costs as part of the settlement offer.
This therefore discourages settlements rather than encourages them
in lower value cases as the respondents will not want to pay
claimants costs, and the claimants will not be able to accept an
offer after having paid a significant amount in fees.
Another disadvantage to the claimant under option one is that
clearly an unscrupulous respondent could use this to his advantage
knowing a claimant cannot afford to pay such an amount to being
their case to a hearing and effectively bully their way to an early
lower settlement with the treat of the claimant having their case
struck out if they don't pay the hearing fee.
The best way forward under option one would be if respondents
change the way in which they operate and were prepared to settle at
a much earlier stage than is current practice in many cases before
the claimant incurs the additional hearing fee but often this may
not be possible depending on disclosure, witness statement and
other evidence.
My biggest concern for either option would be the implication of
very low value claims such as claimants owed one week's notice pay,
or unpaid wages or holiday pay that may only amount to several
hundred pounds. It is really unreasonable to expect someone to pay
£250-£600 for a claim worth less than this. Obviously if the
claimant is successful and obtains a costs order then yes, but what
about claimants that are successful, either by a default judgement
or otherwise, and even get an order to pay costs but the respondent
simply never do? This claimant will be out of pocket for the
original amount claimed, then the court fee and will then have to
bring proceedings in the county court to pursue the debt, incurring
yet more expense. There is mention that low earners may be able to
obtain a fee waiver, but no specifics have been given as to who
would qualify, this may have serious restrictions for access to
justice for those who need it the most.
For high value cases, option one or two would make little
difference to how they are brought and may have little bearing on
encouraging or discouraging a settlement and therefore both fee
proposals seem reasonable.
On the other hand, from the Tribunal and respondent's point of
view, I think we would all agree that there are a large number of
cases brought to a tribunal that really ought not to have been
brought. Vexatious, or low merit cases currently are easy to pursue
as the claimants lose nothing by bringing a claim and will only be
disposed of if a PHR is called and the claimant has the option of
simply withdrawing their claim at that point and walking away
having wasted court time, representatives time, and caused the
respondent significant amounts of money in defending the claim.
Introducing option one may well eliminate a certain amount of
these cases but if the initial fee is only £150 then many claimants
may still be prepared to pay this knowing they will never pay the
second instalment for a hearing but will have caused inconvenience
to the respondent and may be even obtained a commercial settlement
to withdraw.
In that regard then option two would be potentially better to
eliminate the low merit or vexatious cases as the fee is much
higher and would likely discourage such claims, but the difficulty
then is option two makes its even more difficult for genuine but
low value cases to be brought.
I can clearly see the benefits for the Tribunal being funded by
claims brought, and I can see the advantage of trying to eliminate
weak or abusive cases, but this may well be to the detriment of
genuine low earners with low value cases when compared to the fee
costs but is still a significant amount of money to the
claimants.
The exceptions to the fee payment will be of vital importance to
protecting such claimants, but then will this simply leave the door
open of certain abusive cases to be brought in any event also?
Denis McGettigan is a specialist employment solicitor at
Switalskis Solicitors LLP.