Tribunal fees: should you prepare for a deluge of claims and what happens next?

It has been a tumultuous few years for the Conservative party and the recent Supreme Court ruling has added to the party’s list of woes. The government will now have to repay £32m to parties following the Court’s unanimous decision that the tribunal fee regime was unlawful.

The Court was scathing in its criticisms of the regime and found that tribunal fees prevented access to justice under both the common law and EU law and they indirectly discriminated against women who were more likely to make the more expensive Type B claims, (attracting fees of up to £1,200).

Future claims: should employers expect a deluge?

It is inevitable that tribunal claims will rise, particularly low value claims which were previously worth less or little more than the actual fees. It is also expected that the number of equal pay and discrimination claims will rise as those working for larger employers gain a greater insight into pay differentials as a result of gender pay gap reporting.

There is also the risk that some claimants may argue that they were prevented from bringing claims due to the fees, or their claims were struck-out for non-payment of fees. The Supreme Court’s judgment gives claimants hope that they could bring these claims back to life, even if out of time.

The first decision on this issue was made in August at Southampton Employment Tribunal. In Dhami v Tesco Stores Limited the claimant initially requested help with fees so that she could bring her age and disability discrimination claims. Her request was rejected, she was required to pay an issue fee and her claim was subsequently rejected once she failed to pay the issue fee. The claimant was out of time to lodge a fresh claim following the rejection of her claim.

The claimant successfully argued at tribunal that time should be extended because of the Supreme Court’s ruling on fees. The tribunal agreed that it was just and equitable to extend time and was influenced by the fact that the claimant could demonstrate prompt attempts to bring her claim on time. In this case the claimant could clearly evidence her attempts to bring the claim on time and it being struck out for non-payment of fees but what would have happened had the claimant not attempted to bring a claim? What evidence will be required to show that the fees acted as a deterrent? We will have to wait and see how tribunals will approach such cases.

If claimants are able to overcome this initial hurdle and revive claims which are out of time, employers could face claims dating back to summer 2013 which obviously presents a number of problems if key evidence has been destroyed and key witnesses have moved on.

But before panic strikes and employers start to batten down the hatches in fear of a tidal wave of tribunal claims, it is important to remember that the requirement to contact ACAS before lodging a claim still exists. Prudent employers may therefore make every effort to seek to settle meritorious claims at this stage rather than incurring legal fees defending the claim once it has been lodged.

It also remains to be seen how the tribunal system will cope with an increase in claims. Following the reduction in judges and the closure of a number of tribunals, the system is already groaning under the weight of current claims so how will it cope with the expected surge? The answer is it probably will not in the short term and claimants hoping that their claim will be heard very quickly will have to think again.

Future legislation: are fees gone for good?

The Supreme Court’s judgment did not say that any level of fee is unacceptable.  The issue was the previous structure in place, which the Court felt acted as a barrier to justice and did not mirror the civil court system which has a sliding scale fee system depending on the amount claimed.

It is likely that the government will issue a consultation paper and then possibly bring in a new fee regime with fees at a lower level, or requiring the employer to pay a fee when it lodges its ET3. However, with Brexit related legislation to contend with, it seems unlikely that the government will be in a rush to push any sort of fee regime through parliament. Watch this space.