Employment tribunal fees abolished

We were not surprised by the Supreme Court’s decision that employment fees were unlawful on the basis that they prevented access to justice – all of the statistics since tribunal fees were introduced in July 2013 showed the number of claims effectively dropping off a cliff.  They also showed no significant percentage increase in success rates for claims since the fees came in, to back up the Government’s argument that tribunal fees would prevent nuisance or unmeritorious claimants.

Are claims likely to increase?

Headlines at the time of the decision promised an “upsurge” or “deluge” of employment tribunal claims.  We’ve been asked since the decision whether we expect to see a significant increase in the number of employment tribunal claims?  We may be proved wrong, but our answer is that whilst we do expect there to be more claims issued, we do not expect to see a substantial increase in tribunals back to the levels that they were at around 2010.

The number of non-equal pay or multiple claims (i.e. claims brought on behalf of a large group of affected staff) had been falling for a number of years before fees were introduced in 2013. This had been for a number of reasons.  These drivers have not changed and include:

• the reduction in trade union membership overall and the consequent depletion of union legal budgets to pursue matters which do not benefit more widely their membership
• the introduction of Acas pre-claim conciliation
• the reduction of lawyers taking employment claims on a “no win no fee” basis.  The relatively high cost of litigation if an employee is uninsured and the fact that, even if they are, insurance panel lawyers manage claims based on providing cover only where a claim has sufficient prospects which means many claims are not brought or are settled or withdrawn during the process
• most importantly, that many employers are better organised, have become far more proficient at managing matters on a daily basis and often manage termination decisions via the settlement agreement process.

Can the system cope with more claims?

If there is even a modest increase in tribunal claims, we might see the tribunal system start to creak again.  With the downturn in claims, the tribunal system has itself shrunk.  The tribunals have more actively managed cases which has been positive for all involved and again, with more cases, this proactive stance may change.

For more information on how we can help your business, please contact Chris Maddock on 0191 211 7919.