Employment Tribunal fees will be scrapped

UNISON have won their Supreme Court challenge against the imposition of Employment Tribunal Fees. The Supreme Court website is about a week out of date and at the time of writing the full judgment is not listed however UNISON has issued a press release.

The introduction of fees, four years ago, is one factor that has contributed to rising claims costs for legal expenses insurers; however the potential costs savings to be realised following the scrapping of fees will be tempered by a potential increase in the volume of claims. UNISON’s victory will not be welcomed by businesses whose vulnerability to be claimed against will return.

We don’t yet know whether fees will be refunded automatically or whether, in the future, it will be possible to charge a lower fee.

UNISON makes a valid point when it says, “We’ll never know how many people missed out because they couldn’t afford the expense of fees. But at last this tax on justice has been lifted.”

ARAG policyholders will not be in the unknown pool of individuals who were deterred from pursing their employment dispute as their decision to take out Family Legal Solutions has given them protection against the unfair fees. Business policyholders who settle fees or are ordered to pay them have also been covered.     

ACAS’s 2016-17 report shows that around 1800 requests for early conciliation are received each week on average. Just below 50% of cases settle through ACAS early mediation and avoid being escalated to a hearing. ARAG policyholders have the reassurance of legal representation throughout early conciliation and beyond.

In relation to employment disputes, the fees have enabled the Government to save around one-third of the costs needed to run employment tribunals. Since introducing fees for employment claims other tribunal jurisdictions have introduced a fee system. For example, low fees of £100 for an application/ £200 for a hearing are payable for claimants seeking dispute resolution through the Property Chamber of the First Tier Tribunal. This level of fee seems much fairer and it’s possible the employment tribunals could adopt something similar.

Aside from charging fees in tribunals, did you know that last year HM Courts & Tribunal Services turned a profit of £100m through the imposition of “enhanced court fees”?  Enhanced court fees apply where court fees are set at a level that exceeds the state’s cost of running a case. This in effect turns courts into profit centres.  We deal with a number of landlord repossession claims and the last hike in fees increased court fees for landlords by 20%.  As tribunal fees have been judged to be unfair surely these enhanced fees are also unfair? 

ARAG’s vision is that all citizens should be able to afford to assert their legal rights and we exist to protect consumers, landlords and businesses against incurring heavy expenses to make or defend a claim. While the abolition of employment tribunal fees is welcome news for employees we will keep a close eye on the impact the decision might have on our business policyholders and we remain concerned at the high cost of bringing other types of claim. 

Unrepresented struggle with employment tribunals

I was surprised by the harsh line taken by the employment tribunal and employment appeal tribunal in a case summary prepared by James English of Hempson’s Solicitors and circulated by barrister Daniel Barnett in his excellent employment law bulletin.

The Claimant brought several claims, including constructive dismissal, against his former employer.

Perhaps he didn’t have legal expenses insurance because he initially contacted ACAS for Early Conciliation without any legal representation.  The claimant named a director of the business as the party he wished to make his claim against (the Respondent). It seems that in this case matters could not be resolved through ACAS Early Conciliation and the claimant instructed solicitors to prepare his Claim Form to pursue the matter at tribunal.

The solicitors correctly named the claimant’s ex-employer, 'SNA Transport Limited' as Respondent.  The employment tribunal rejected his claim as the Respondent had not been correctly identified on the Early Conciliation Certificate. His solicitors applied to the tribunal to reconsider that decision on the basis that the use of the director's name was a "minor error", which (under the rules) allows a tribunal to overlook it.

The employment tribunal rejected that application taking the view that confusing the director with the company was not a minor error, and it had been right to reject the claim. The Claimant appealed.

The Employment Appeal Tribunal, although sympathetic, rejected the Claimant's application. It said that a two stage test should be applied. Firstly, was it a minor error? If not, the claim would be rejected. Secondly, if it was, the tribunal should go on to consider whether or not it was in the interests of justice to allow the claim to proceed. Although in principle the distinction between a natural and a legal person could amount to a minor error, in this case it did not. Each case should be considered on its facts, and as there was no error in the tribunal's Judgment, the Claimant's appeal was dismissed.

I’m disappointed about this decision as it’s an easy mistake for someone who is acting without legal representation to make. The case does however underpin the value of legal expenses insurance for ACAS Early Conciliation.  Although the system was designed with the intention that employees should negotiate without legal assistance it is not free of obstacles. If this claimant had taken out LEI, the error in completing the ACAS form would have been avoided, allowing him to pursue his action at tribunal. Additionally, the insurance would have covered the Tribunal fees and legal costs incurred.