Consultation on employment tribunal fees

Those involved in employment law, whether employment lawyers, HR professionals or employers will generally all agree that one of the single most significant reasons why the number of claims made in the Employment tribunal have been rising year on year is because it’s free to use, unlike the general country courts. This, allied with the general no costs rule has led many employees to the conclusion that they have very little to lose in starting a tribunal claim in the hope that the employer or former employer will decide it’s better to settle the claim than waste time and legal costs.

So, the Government’s current consultations, scheduled to last until March 2012, on the issue of costs are very significant, especially since the issue seems to be more  about which form of court fee structure should be used rather than whether court fees should be payable, since that is now effectively a given.

2 sets of proposals are under consultation, which are as follows.

• Proposal 1 – an issue fee of between £150.00 and £250.00, depending on the nature of the claim, with a further fee of between £250.00 and £1,250.00 if the claim goes to a hearing. There would be no limit to the maximum compensation award payable; or
• Proposal 2 – a single fee of between £200.00 and £600.00 where the claimant seeks an award of less than £30,000.00. Those seeking a larger award would pay an additional fee of £1,750.00.

The first proposal, if implemented, would come into force in 2013 whereas the second  would need a legislative change and consequently would not be introduced until 2014.

As in the county courts, fee waivers will be available for people who cannot afford to pay.

It is also highly significant that the new rules will incorporate discretion to award costs against either party, which would be a different approach to the current position which is no costs except in exceptional circumstances.

These changes are likely to have a profound effect on the Tribunal system and in all probability to significantly reduce the number of claims, since claimant’s will be forced to put their money where their mouth is, but whether they will also mean some appalling instances of employer breaches of employment rights are no longer punished is also a likely outcome. Whether employment lawyers will subsidise claims by paying the court fees is another moot point in this area.

What do you think of these developments ?