Claims tide unlikely to turn

New ‘pay-to-play’ rule  will do little to ease  the pressure on the Employment Tribunal system

Barnadette Daley

For employment lawyers and the Employment Tribunal system, 29 July was a significant date. First, new rules of procedure came into force, with the aim of simplifying rules criticised for not being user-friendly.

In many ways, the new rules formalise practices already in place. However, if tribunals take a proactive approach to the new sift stage – where the merits of the claim and response are assessed early, as a paper exercise – it could knock out unmeritorious claims or responses.

Given how stretched the resources of the Tribunal Service are, one  wonders how much time will be spent on the sift stage and whether employment judges will use their new powers. If this encourages each party to focus, at an early stage, on the merits of a claim or a response, that is no bad thing. It should also focus attention on remedy and quantum which could, in turn, help settlement discussions.

But the more controversial change is the introduction of tribunal fees, representing a significant shift in approach. Claimants will now need to pay £250 to issue a claim and £950 around six weeks before the hearing for claims such as unfair dismissal and discrimination, or £160 and £230 for more straightforward claims. Additional fees apply for certain types of applications and hearings.

Fees have been introduced to help fund the cost of the system and reduce the number of unmeritorious claims. 

Trade union Unison and a Scottish law firm have both applied for a judicial review of the Government’s decision to introduce fees on the basis that they would make it difficult to exercise individual rights conferred by EU law and could be indirectly discriminatory. A full hearing in the Scottish case is likely to take place later in 2013, but given that Unison’s application for a judicial review was rejected it looks like the reforms will press on, full steam ahead.

Will fees reduce the number of  claims or put off vexatious litigants? Ex-employees who are out of work and receiving benefits should be exempt because a remission scheme will apply. Those with higher value claims, or more highly paid employees, are also unlikely to be put off.

So, while fees may deter the truly spurious nuisance claimant with a very low-value claim, it is far from clear how many fall into that category. In any event, if fees are paid employers will no doubt be asked to cover them in any settlement package if a claim settles before the final hearing.

One short-term effect may be a spike in claims lodged before 29 July. As for the longer term, I suspect few employment lawyers or advisers are anticipating a significant decline.

Employee relations and the workplace is a heavily regulated area, subject to regular review in response to political, economic and social pressures. For as long as that remains the case, the sum effect of all the recent changes is that we may have a set of procedural rules that are more ‘fit for purpose’, but those rules will govern an ever-increasing number of claims.