Lawyers fear reforms to the arrangements for remitting fees will lead to inequality and more litigation
At the end of July fees are due to be introduced in employment tribunals for the first time. The following fees will become payable in all tribunal cases.
Level 1 fees will cover straightforward claims, such as unpaid wages, redundancy pay, holiday pay and notice pay. The fee to start the claim will be £160 and the fee for taking the claim to a hearing will be £230.
Level 2 fees will cover all other claims such as unfair dismissal, discrimination, equal pay and whistleblowing. The issue fee will be £250 and the hearing fee will be £950.
Additional fees
There is a complicated system for multiple cases (where there’s a number of claims arising out of the same or similar circumstances), and there will also be fees for reviews of default judgments, applications to dismiss a claim after settlements between the parties, judicial mediation, and counterclaims in breach of contract cases. To appeal a tribunal decision will cost £400 and the fee for taking a case to an Employment Appeal Tribunal hearing will be £1,200.
Remissions
Part of the new approach will involve using a remissions system (under which fees are waived or reduced) to allow claimants who cannot afford tribunal fees to still bring claims. However, the current civil courts remissions system is due to be replaced. The government has just closed a consultation on a new system and a response can be expected in the summer. This means we may have to get used to a new system within a few months of the introduction of employment tribunal fees.
The current remission system provides for a full remission if the claimant is in receipt of a listed income-related benefit or has gross income of no more than £13,000 if single or £18,000 for a couple. There can also be full or partial remission based on disposable income using the legal aid criteria: below £50 a month means the claimant will be completely exempt from paying the fees, and every extra £10 of income makes the claimant liable for a fee of £5.
Changes
The consultation proposes a number of amendments to the system including:
- reducing the number of benefits receipts which will be accepted as proof of entitlement to a remission
- introducing a ‘disposable capital’ test when assessing eligibility for fee remission
- reducing the period during which claimants can apply for a retrospective fee remission from six to two months.
Access to justice
The Employment Lawyers Association (ELA) was concerned that the government only set aside four weeks for responses to a complex paper with substantial implications for access to justice and fairness. The proposed ‘disposable capital’ test sets limits that are lower than those used for legal aid. Claimants with little more than £3,000 could be asked to use one third of their capital to pay fees. And the practical difficulties involved in gathering evidence of disposable household income within the time limit of three months for most tribunal claims, at a time when income and capital may be changing drastically, is underestimated. There could be significant levels of satellite litigation over time limits if claims for remission are not processed in a timely fashion. Reducing the time limit for retrospective applications to two months could penalise claimants with proper claims for a remission.
Overall the ELA thought these proposals should be reconsidered. They could have an adverse impact on equality, especially for older workers who are more likely to have savings for retirement which could count as disposable capital and so not qualify for a remission. This in itself could lead to legal challenges.
Paul Statham is a partner at Pattinson & Brewer. With Michael Reed, director of the Free Representation Unit, he co-chaired the Employment Lawyers Assocation sub-committee that responded to the consultation. The response records the concerns of employment lawyers who act for both claimants and respondents.
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