Tribunal fees change signals trying times

KATIE Russell foresees great increase in claims ahead

Picture: Phil Wilkinson
Picture: Phil Wilkinson
Picture: Phil Wilkinson

Hot on the heels of the Scottish Government’s announcement that it intends to abolish tribunal fees in Scotland, the Law Society of England and Wales has released a discussion paper which proposes a complete overhaul of the tribunal system south of the Border. The proposals could result in a significant divergence in tribunal practices and procedures across the UK.

Although the Scottish Government has clear intentions to abolish fees for employment tribunals, the finer details and timings are yet to be determined.

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If and when fees are abolished in Scotland, we are likely to see a significant increase in the number of claims being raised. However, whether numbers will return to pre-fee levels is unclear, especially given the introduction of the Acas early conciliation regime.

Interestingly, the abolition of fees in Scotland might encourage so-called jurisdiction shopping by claimants unless the rules on where an employee may competently bring a claim are tightened up.

The future of employment fees UK-wide remains uncertain as Unison continues to challenge their legality through the courts. While the Court of Appeal recently rejected Unison’s arguments, the trade union intends to raise a further appeal to the Supreme Court. The UK Government has recently commenced a review of the tribunal fee regime.

Separately, in a discussion paper, the Law Society of England & Wales has put forward its proposals for an overhaul of the tribunal system. As the proposals relate to England and Wales only, this – alongside the Scottish announcement on fees – could mark the beginning of a divergence between the two tribunal systems.

While most people would be forgiven for thinking the employment tribunal already operates as a single jurisdiction for employment matters, there are still some breach of contract claims which can only be brought in the civil courts – the most common examples are restrictive covenant claims; and contract claims brought during employment (the tribunal can only hear a contract claim if the employment relationship has already ended).

The tribunals are also restricted from making breach of contract awards in excess of £25,000 whereas there is no such limit in the civil courts.

The Law Society for England & Wales proposes all employment-related claims should be heard in a single forum and have asked for feedback from key stakeholders on whether this should continue to be the employment tribunal or a new employment court.

The Law Society proposes a new four-tier system. Claims would go through a “filtering” process to determine which level was the most appropriate, based on the complexity of the legal issues involved and the value of the claim.

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Currently, parties in the UK must pay a fee to use the tribunal’s “judicial mediation” scheme. The Law Society of England & Wales suggests that in addition to making parties aware of what other options are available, removing this fee could encourage better use of these alternatives. It is anticipated that judicial mediation fees would be abolished in Scotland at the same time as tribunal fees.

The UK Government’s Department for Business, Innovation and Skills has also encouraged businesses and employees to use alternative resolution mechanisms in order to resolve workplace issues.

In the majority of cases, this will ultimately mean entering into a settlement agreement following negotiation and/or mediation. However, current government policy in the UK prevents public sector employers from reaching settlements other than those reached through an Acas-approved settlement, once a claim has been raised.

The Law Society discussion paper provides food for thought, and it will be interesting to see if government policy in England & Wales will be relaxed in line with the proposals to promote the use of alternative dispute resolution.

There has already been speculation that employees could “forum-shop” to avoid fees if the plans to remove fees in Scotland are implemented. If these more radical changes to the English and Welsh tribunals are implemented, could we see employees face a choice between saving money, or paying for a quicker resolution? Or will the Scottish tribunal system opt to undertake a similar overhaul? The jury (or tribunal) is still out…

• Katie Russell is a Solicitor with Shepherd & Wedderburn, qualified in Scotland, England & Wales.