Employment Tribunal Fee Proposals ‘Must Strike A Balance’

Expert Comments On Latest Reports


An employment lawyer at Irwin Mitchell has warned that a delicate balance needs to be struck if fees are to be introduced for those who are pursuing tribunal claims against employers.

Reports have revealed that many businesses are keen on such fees to be launched in an effort to cut the number of so-called ‘spurious’ claims which arise and in turn reduce the costs faced by firms forced to defend themselves against cases with little chance of success.

It has been suggested that some government ministers have taken an interest in the plans, which could see fees of between £30 and £500 introduced per case. The issue has also been in the spotlight after figures revealed that the BBC spent £600,000 on addressing employment tribunals throughout 2010.

Fergal Dowling, Partner in Irwin Mitchell’s Employment team, said: “While the ‘no-costs’ rule is central to the tribunal system and the need for it to be accessible, fees - which can be forfeited if a claim is unsuccessful - are theoretically a good idea.

“The difficulty is that most claimants in an Employment Tribunal are out of work, and there is a natural concern that claimants may be unable to pay a fee if it is set too high. Conversely, if the fee is too low, it will not have the deterrent effect that employers are hoping for.”

Considering the current set-up, he explained: “There is already a provision in the rules which enables an employer to ask the Tribunal to either strike out a claim or order a claimant to pay a deposit of up to £500 as a condition of continuing with the claim in cases where it can be demonstrated that here are either no or little reasonable prospects of the claim being successful.

“The problem with that is an employer still has to go to the expense and trouble of filing a defence to a claim and then attending a pre-hearing review at the Tribunal to secure such orders. There is also a concern from employers that the Tribunals are too reluctant to use their powers to award costs against an unsuccessful party, which are rarely exercised.”

Fergal added that another potential way to address the issue of tribunals could be to avoid the introduction of fees but instead give more consideration to pre-claim conciliation that may be linked to costs powers.

He explained: “Of course, this was the aim of the statutory dispute resolution procedures which were in place between 2004 and 2009, but that experiment failed essentially due to poor drafting and over-complexity. Moreover, in hindsight, it was perhaps asking too much for employers to take the responsibility for easing the burden on the Tribunal system.

“A better alternative would be to expand the range of powers exercisable by ACAS or some other similar body, which could be required to attempt to mediate all prospective Tribunal claims, and to then make recommendations to the Tribunal as to whether any party has acted unreasonably at the pre-claim stage.

“This process could then be used to determine whether a fee should be payable when a claim is lodged, as well as in deciding on any costs consequences.”