The Supreme Court has today ruled that the introduction of Tribunal fees in July 2013 was unlawful.

Fees were introduced by the Government in 2013 with a view to weeding out malicious and unmeritorious cases. Most cases required the Claimant to pay £1200 in fees. The effect was a 79% reduction in cases being brought over the last 3 years.

The union UNISON brought proceedings to challenge the lawfulness of the fees, arguing that they had a discriminatory impact and had prevented access to justice for workers unable to fund their cases. They didn’t just weed out weak cases, they stopped genuine cases as well. The Supreme Court agreed and concluded that the reduction in claims after the fees were introduced was “so sharp, so substantial and so sustained” that they could not be afforded by workers on low to middle incomes or those seeking a modest or non-monetary remedy. They also concluded the provisions amounted to indirect discrimination against women and could not be justified.

The Court was not convinced that the introduction of fees had effectively moved the cost of the tribunal system from the taxpayer to those using the service. Neither had it had the effect of encouraging settlement via ACAS. Instead it had deterred early settlement as employers were waiting to see if the Claimant actually issued proceedings.

The ruling means that those that have paid fees will be able to claim them back from the Government which the BBC has reported will cost an estimated £32 million. It also means (for the time being at least) that Claimants will not have to pay fees to bring claims. However, it is anticipated that rather than the fees regime being completely abolished, an alternative fees regime may be brought in with lower fees and the possibility of employer’s having to pay a fee when they lodge their ET3, defending the claim. The Tribunal rules will need to be rewritten and the on-line Claim Form will need to be altered which currently requires the Claimant to confirm that they have paid the fee for the claim to be accepted.

Those individuals who did not lodge claims, over the last 4 years, due to the fee may seek to issue claims now, arguing that time should be extended to allow the claim as it was not reasonably practicable for them to have done so earlier, in view of the fees regime. Whether Tribunals will allow such claims remains to be seen.

What is clear is that some employers have taken a fairly bullish approach to their treatment of staff in recent years in the knowledge that many would not take proceedings against them due to the cost of doing so. Now the barrier to proceedings has been removed, it is anticipated that claims will start to rise again. Employers will need to bear this in mind when making business decisions and dust off any files relating to employees who had alluded to bringing a claim over the last 4 years and didn’t. They may come back to haunt you…

If you would like to discuss any issues raised in this article please contact Angela Gorton or a member of our award winning Employment Law Team.

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Please note this information is provided by way of example and may not be complete and is certainly not intended to constitute legal advice. You should take bespoke advice for your circumstances.

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