Last month’s Supreme Court judgment on employment tribunal (ET) fees, now reported in the Weekly Law Reports, has knocked a massive hole in the government’s strategy for the funding of justice as a “service”. By setting ET fees at prohibitively high levels, the court ruled, the government was effectively pricing claimants out of justice altogether. We look at the background to UNISON’s epic battle and what the decision means for access to justice.

The Fees Order

Employment tribunals (ETs) offer a speedy and informal procedure to determine workplace disputes. Until recently it cost nothing to issue a claim. But in 2013 the coalition government, as one of a series of measures aimed at cutting the cost of justice, brought in the Employment Appeal Tribunal Fees Order 2013 (SI 2013/1893).

The Fees Order required claimants to pay issue and hearing fees of either £390 for a relatively straightforward “type A” claim, or £1200 for a more complex “type B” claim, such as unfair dismissal, equal pay or discrimination claims. Additional fees were payable for appeals to the Employment Appeal Tribunal.

The thinking behind the fees was threefold. First, to transfer the costs burden from the taxpayer to those who used the tribunals. Second, to incentivise earlier settlement of disputes. Third, to discourage unreasonable, weak or vexatious claims.

However, some indication of the government’s intention can be gleaned from Matthew Hancock, Minister of State for Business, Energy and Enterprise, in February 2015, when giving the Future of Manufacturing speech to the EEF: “Our action on red tape has included cutting employment tribunals by 80 percent, freeing thousands of firms from unnecessary inspections. It’s part of a wider drive to remove unnecessary burdens.”

In other words, employees complaining about breaches of their workplace rights was basically a form of “red tape”, comparable to “unnecessary inspections”.

However, the fees actually introduced were so high, and the ensuing drop-off in the number of claims so great, that they destroyed the primary economic justification for their introduction. Figures later produced by the Ministry of Justice showed that the level of claims dropped off drastically after the fees were introduced. One report put the fall at 66-70%, which is still a bit lower than that proudly boasted by the minister.

UNISON’s battle

UNISON decided to bring a claim for judicial review of the Fees Order. The union’s Head of Legal, Adam Creme, explains to Lawyer 2B why it was so important to take up the cudgels on behalf of not just union members but employees everywhere: “We decided very early on that we would challenge the ET fees regime. We believed right from the start that the amount being charged could not be justified and that the vast majority of workers – especially those not able to join unions – would simply not be able to afford to take claims, no matter how strong their case.”

Right from the start they encountered set-backs. The initial application for permission to bring a judicial review claim was refused on the papers. But they persisted, despite losing twice in the Queen’s Bench Divisional Court (see R (Unison) v Lord Chancellor [2014] EWHC 218 (Admin); [2014] ICR 498 and (No 2)  [2014] EWHC 4198 (Admin); [2015] ICR 390) and then again in the Court of Appeal ( [2015] EWCA Civ 935; [2016] ICR 1).

“We knew it would be an uphill battle,” says Creme, “and I told colleagues we would need to be prepared to take the case all the way to the Supreme Court, whether we won or lost the early skirmishes. We would have taken it to the European Court if we had needed to do so.”

The Supreme Court judgment

The court’s decision [2017] UKSC 51; [2017] 3 WLR 409 does not merely declare, as a matter of administrative law, the Fees Order to be unlawful. The main judgment, given by Lord Reed, is also a landmark statement on the rule of law, the importance of access to justice, and the role of the courts in holding the democratic system of government to account: see, in particular, paras 65 to 72.

Lord Reed puts paid to the idea that “the administration of justice is merely a public service like any other”, and that those services are of no wider value to society. Rather, the courts exist “to ensure that the laws made by Parliament, and the common law created by the courts themselves, are applied and enforced.” Without access to the courts, “laws are liable to become a dead letter, the work done by Parliament may be rendered nugatory, and the democratic election of Members of Parliament may become a meaningless charade.”

He also emphasised the value of court and tribunal determinations, not just in resolving the disputes that prompted the case, but also in developing the law and underpinning the enforcement of the relevant rights by other means. Procedures like negotiation or mediation “can only work fairly and properly if they are backed up by the knowledge on both sides that a fair and just system of adjudication will be available if they fail”.

Risks and consequences

The Supreme Court’s decision that the Fees Order was unlawful “ab initio” and must be quashed means the government will have to refund some £27m in fees already paid, as well as compensating others who, by reason of the fees, have lost an opportunity to pursue claims.

However some newspapers, taking their cue from some business leaders, reacted negatively, suggesting that the decision was a bad one for business and would encourage unmeritorious claims (a point specifically addressed in the judgment). This attitude harks back to Matthew Hancock’s boast about “red tape”.

However, they are right to suggest that there will be more claims, including many goods ones that might not otherwise have been fought. (Indeed, there may be a rush of late claims, seeking extension of time on the ground that the fees regime precluded them being brought sooner, as Amanda Sanders from Norton Rose Fulbright’s employment team has already explained on Lawyer 2B.

For Adam Creme at UNISON it was the obviously deterrent effect the fees were having that justified fighting them all that way. But however justified the struggle, all litigation carries with it a massive risk. What advice would he give to trainee litigators?

“You need a number of things to achieve justice,” he says. “Key obviously is a meritorious case – you have to be able to justify spending other peoples’ money. But if you have that as the starting point and you have reached that conclusion objectively, then don’t give up. You just don’t know what might happen four years down the line.”

His words are echoed by Shantha David, UNISON’s legal officer who worked on the case from the very beginning: “This was too important a fight to give up. We knew our best chance was in front of the Supreme Court, so we just had to keep going.”

Paul Magrath is Head of Product Development and Online Content at the Incorporated Council of Law Reporting for England and Wales (ICLR). He tweets as @Maggotlaw.