The rise and rise of the no-cost Employment Tribunal

by Heat Recruitment

By Patrick McMahon

It’s been a long time coming, but in July of 2017, there was a shift in the way that employment tribunals were handled. In the case of R (Unison) v Lord Chancellor (2017), Employment Tribunal fees under the Employment Tribunals and the Employment Appeal Tribunal Fees order 2013 (Fees Order) were officially abolished.

According to a number of legal experts, and indeed the initial ruling itself, Employment Tribunal fees meant that employees were invariably required to pay two separate charges – both a claim fee and a hearing fee – when bringing a claim. The purpose of which was to deter people from making groundless claims.

The issue that was brought forward specified that paying fees in the first place discriminated against women and other protected groups indirectly, due to the increased likelihood of them bringing discrimination cases (which required higher fees).

Notably, following the ruling, there was initial surprise at the relatively low uptake of employment tribunal refunds. It was estimated that the UK government would have to repay up to £33m in refunded fees from tribunal claims between July 2013 and July 2017 – £10.8m during 2018 alone. Despite this, in July of 2017, just 4,500 applications were put forward, at a cost of £1,808,310.

In 2018, however, we see an entirely different story – one with strong implications for the legal sector.

New figures have come to light from the UK government, showcasing that for October to December 2017, 8,173 single claims were brought. This, compared to 4,200 claims in the same period of 2016, represents a 90% increase – the highest level since 2013 when the fees were initially introduced. This has, however, resulted in a significant backlog increase for these single claims – increasing by 66%.

For multiple claims, we see a continuation of this trend. The government figures confirmed a 467% increase on 2016 figures.

Helen Crossland, Head of Employment at London law firm Sneddons, advised that “This follows the initial 64% rise in new claims being brought after fees were scrapped last summer. Unfortunately, this has also made for a corresponding backlog in claims; one consequence being that parties will need to factor into their case strategy the fact they will have to wait much longer for hearings to be listed and for applications (including to address unmeritorious claims) to be processed.”

Despite this significant surge in the number of claims brought forward, this has evidently not been met with an increased level of staffing to meet the greater demand.

Paul Quain, Partner at GQ Employment Law, confirmed: “To help deal with the already rising number of cases, a larger budget for employment tribunals will be necessary. The backlog of claims has increased significantly, and it is important to manage this going forward as it can be a major bugbear for both employees and employers.”

With one judge highlighting that these claims are often based around unfair dismissal or wage disputes, one key takeaway is that businesses will see an increased requirement to mediate these issues before they reach the stage of legal action.

While the removal of tribunal fees for the purpose of public good is indeed a noble cause, without an adequate increase in the staffing levels required to handle new cases, the results will quite simply remain static. Many legal specialists are now noting a significant delay between bringing a claim, securing a hearing date and then having the overall case heard – often taking a minimum of a year. While in theory this seems to be a good move, in reality, it appears to have replaced one barrier for another.

If you’re looking to secure the next step in your legal career or are searching for your next top hire in the sector, get in touch with the team at Heat Recruitment. You’ll be thrilled you did.

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