Tribunal Fee Structure...Reducing Costs or Claims?

As with a lot of things in today’s world, an employment tribunal claim can be commenced at the click of a button, and at no cost.

However, following Government responses to the Charging Fees in Tribunals and the Employment Appeal Tribunal consultations in July 2012, it is likely that from Summer 2013 there will be the introduction of a fee structure to the tribunal process.

The fee structure, the amount of which will be determined by the type of claim, will consist of two stages; an initial fee will be paid by a claimant when they present a claim, and the second fee will made payable once a hearing date is set.  The rationale for introducing this is to place some of the burden of the cost of the tribunal service, which is currently £84million a year, on the users, opposed to the current regime which is funded solely by taxpayers, most of whom will never use the service.

Howard Robson, Employment Partner, explains, “This is just one of many cost saving exercises which are currently being introduced by the Government, and whilst this move should mean we see fewer claims which lack any merit, such as the infamous John Berry who issued 60 claims against 60 different employers following unsuccessful interviews simply with a view to obtaining a £1,000 settlement from each of them, it will also prevent those with genuine claims from pursuing them.”

The second reason for introducing the fee structure is to encourage the parties to explore settlement through earlier and faster means.  “However, for various reasons many disagree that the fee structure will have this effect,” explains Howard.  “Firstly, claimants who benefit from the remission scheme (a fee waiving system designed to assist those who have difficulty paying a court fee such as those in receipt of income support or job seekers allowance) will have no incentive to settle, and those who have financial means will be equally disincentivised.  Secondly, those who pay the fee may see it as an investment and wish to proceed to the tribunal regardless.  Finally, the respondents will no doubt take advantage of this and not engage in settlement discussion until the claimant has demonstrated their intention to proceed by paying the fee to issue the claim.”

While the foreword of the Government response highlights that these changes will be made to ensure that public services are cost effective, to confront the barriers that prevent competitiveness, employer confidence and the creation of jobs, it does seem that the real motive is to dissuade claimants from issuing claims.  However, a well advised employer will know they can dismiss an employee in the first, and now second year of employment easily on notice.

Howard concludes, “There are various other obstacles which the proposed fee structure presents which cannot be explored in this article but, needless to say, all tribunal users are awaiting the final fee model with interest!”

If you are an employer or an employee with a legal question and want some advice, please contact Howard or the Warner Goodman LLP team on 02380 639311 or visit their website www.warnergoodman.co.uk.

ENDS

This is for information purposes only and is no substitute for, and should not be interpreted as, legal advice.  All content was correct at the time of publishing and we cannot be held responsible for any changes that may invalidate this article.