Business Law: Carrie March examines the impact of employment tribunal fees

Carrie March of Ashton KCJ.

Carrie March of Ashton KCJ. - Credit: Archant

HM Courts & Tribunal Service has recently published its annual report which shows that just under £4.5million has been generated from Employment Tribunal fees up to March 31, 2014, since fees were introduced for claims issued on or after July 29, 2013.

While £4.5m is a high figure it actually represents a marked reduction in employment claims being issued; there was a 79% fall in the number of employment tribunal claims lodged between October and December 2013, compared to the previous year’s figures. The report points out that the number of single claims being issued has been declining in recent years but the significant drop since fees were introduced is telling.

The Citizens Advice Bureau also published survey results recently showing that fees were a big deterrent for those coming to see them about claims in June and July 2014. The reduction would be a positive result if it were simply eliminating weak claims, but it is likely it is also putting people off who have claims with good prospects of success.

So, is the introduction of fees causing the reduction? The reality is that it is difficult to reach any other conclusion. The Justice Minister has said that the introduction of fees was an alternative to having to charge tax payers for the provision of the employment tribunal service. Some will sympathise with that approach but may also agree with the TUC’s statement that the move is a “huge victory for Britain’s worst bosses.”

The introduction of compulsory early conciliation via the free advisory service ACAS is also likely to have an impact on single claims issued, with more people agreeing to settle or realising that they have low prospects of success.

Another consequence of the fees is that those who cannot get fee remission may be more difficult to persuade with a settlement offer unless it takes into account the tribunal fees that they have incurred. Likewise, some have mentioned that those who have had to pay a tribunal fee can be more minded to bring a “kitchen sink” claim, where individuals claim anything that could possibly relate to their situation. That approach could be to their detriment if they are not mindful of cost orders that can be imposed against them for each claim that lacks real prospects of success.

: : This article is for general information purposes only and does not constitute legal or other professional advice. We would advise you to seek professional advice before acting on this information.

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Carrie March is a solicitor at Ashton KCJ.