Even if you have a strong case against an employer, if you are poor you may not be able to fund taking it to court now, says Eilidh Wiseman
How much does justice cost? According to the UK government, the employment tribunal system costs £74 million – and this is a cost they are no longer willing to pay.
Until a week ago, bringing a claim to an employment tribunal was free of charge. It didn’t matter who you were – from ex-apprentice candidates to council cleaners – the principle was the same: no one had to pay to bring a claim.
On 29 July, the UK government introduced fees for employment tribunals. Even the simplest claim requires a fee to be paid before the tribunal will consider it. An employee (or more usually an ex-employee) pays £160 just to begin the process of challenging employers over relatively simple matters like non-payment of wages or statutory redundancy pay (with a further £230 payable prior to the hearing).
This is significantly higher than the fees payable to bring a small claim in the sheriff court in Scotland where the fee to recover the non-payment of sums between £200 and £3,000 is only £71. More complex claims, such as unfair dismissal, discrimination, or dismissals arising from whistle-blowing, will now have to pay £250 up-front, with a further £950 due before the full hearing.
If an employee wins their claim in the employment tribunal an employer can be ordered to reimburse the fees. Employers will also be affected in settlement costs, since employees will seek to recover any tribunal fees which have already been paid. Offering £500 as an economic offer to settle is not likely to be attractive to a claimant who has paid £1,200 to bring a claim.
The UK government has said that it is only fair that the people bringing claims should contribute to the cost of running the tribunal. They also believe that fees will reduce the number of claims the tribunals deal with, potentially by up to 25 per cent.
Employers will no doubt welcome any changes which may help to reduce frivolous or weak claims, but are fees the appropriate way to do this?
Many people believe charging people to bring a claim is simply unjust. Charging fees will disproportionately affect those who cannot afford to bring a claim, regardless of the strength of their case. It is equally plausible that wealthy claimants will still bring weak claims.
To counter this, the lowest-paid will not pay fees to use the tribunal. Claimants can apply to the tribunal for fees to be waived via the remissions system.
This is welcome, but critics say it still limits access to justice, particularly when many low-paid workers will not qualify for assistance. For example, a single employee who earns £13,500 a year would not qualify under the income test.
There are also many within the legal community who believe a more effective way of reducing weak or frivolous claims would be to change the system for recovery of legal costs. In contrast, the civil courts operate a different scheme where costs follow success. Generally speaking, the losing party will be ordered to pay their opponent’s legal costs. The risk of incurring legal costs can act as a strong deterrent for those with weak cases.
The same rules regarding costs do not apply in the employment tribunal. Costs are very much the exception and not the norm. According to the last set of annual statistics costs were only awarded in 8 per cent of tribunal cases.
Last week we saw most unions express their opposition to fees, complaining that £1,200 is a disproportionate sum to bring a claim, at a time when most people will have lost their job.
Unison and Unite have advised that they will meet the costs of fees for their members, which may result in membership of a union becoming a more attractive option.
Legal challenges are being made in both England and Scotland regarding the legitimacy of the fees. A full hearing on the issue is scheduled in Scotland in October. On Monday, 29 July Unison won the right to challenge the fees in England. If either challenge is successful it will mean that fees across the whole of the UK would be declared unlawful.
In the meantime, justice may be blind but the new fee system shows she can still count every penny.
• Eilidh Wiseman is partner and head of employment at law firm Dundas & Wilson http://www.dundas-wilson.com