Free-for-all on fee refunds?

Since the abolition of tribunal fees, the effect is not only that future claimants can bring employment claims for free again but, also, that all fees paid since July 2013 (when they were introduced) must be reimbursed by the government. The government has estimated that this would cost in the region of £33 million in total, including interest which will be paid at a rate of 0.5%.

As you can imagine, the process of tracing claimants, and their contact details, for those four years is a mammoth administrative burden on an already stretched tribunal service. As a result, the government has announced that it will be done on a phased basis. Although precise details about how this will work are yet to be released, the starting point is that 1,000 eligible parties will be invited to apply. Parties which do not get invited but are entitled can register their interest to be considered in the next round.

From a company perspective, you may be wondering how this affects your business? Well it is possible that your business could have paid for or contributed towards a claimant’s fees either because, following a tribunal claim an order for costs was made against the business, or because you reached a pre-tribunal settlement with the claimant which covered their costs. If this is the case, a distinction has been drawn. Where the tribunal made a formal costs order, respondent companies will be able to recover their fees (although we suspect they will be placed at the back of the queue). Whereas where a settlement was reached (either a settlement agreement or COT3 agreement) no reimbursement will be offered as this is considered a private contract between the parties.

Finally, the government has not yet addressed what will happen if an individual can genuinely show that they either: did not file a claim because they could not afford to pay the fees; or their claim was dismissed for failure to pay fees. To date we have not heard of any such complaints reaching the courts, and we are sceptical as to whether any such claims will be brought or would succeed. Even if an employee had previously been unable to pursue a claim during the period where the fees applied, they have had plenty of opportunities since last July to do so. Given the strict time limits in relation to employment related claims, our view is that unless any claims are now in the system, very few (if any) new claims will be considered.

For further information, help or advice please contact the Commercial Law team.