Employment Tribunal Fees: The evidential ‘hot potato’ to be heard by Court of Appeal

18 December 2014 by Lauren Godfrey

Unison (No.2), R (on the application of) v The Lord Chancellor – read judgment [2014] EWHC 4198 (Admin)

The Divisional Court (Lord Justice Elias and Mr Justice Foskett) has dismissed Unison’s second-generation attempt to challenge by judicial review the legality of the Employment Tribunal fees system but gave permission to appeal to the Court of Appeal. The “striking” reduction in claims (79 per cent fewer) presented to Employment Tribunals, Lord Justice Elias accepted, was evidence that the system was “extremely onerous” for people in the position of the hypothetical claimants construed by Unison in their legal argument but “not so burdensome as to render the right illusory” (paragraph 53).

Noting the potential infringement of Article 6 rights, Lord Justice Elias was not convinced that the evidence available to the Court surmounted the high threshold set by the European Union case law on effectiveness (paragraphs 23-51; & 60-64); particularly where hypothetical rather than real examples deprived the Lord Chancellor of an opportunity to redress any alleged deficiencies in the scheme (see paragraphs 62-64).

Litigation background in summary

The original judicial review application was lodged in the summer (see my previous post) and was dismissed by the High Court (read the judgment here). However, permission was granted to appeal that decision to the Court of Appeal where the appeal has been stayed pending Unison’s renewed application for judicial review on the basis of fresh evidence. Unison has indicated that permission has been granted in respect of the second application for judicial review to appeal to the Court appeal where the intention is to invite the Court of Appeal to hear the appeals concurrent: see Unison’s statement here.

Points of interest to note in the decision

1. Effectiveness

The principle of effectiveness is quite simple: rights guaranteed to European citizens must be more than theoretical or illusory in that they must be guaranteed by enabling rights of citizen to access to appropriate bodies (Courts and Tribunals) in order to secure or enforce those rights (paragraph 23).

2. Case Law on effectiveness principle

In a comprehensive review of the law relating to the effectiveness principle (paragraphs 23-51), Lord Justice Elias distilled two principles from the case law (see paragraphs 43-44) –

(i) there should not be unnecessary and disproportionate limitations placed on access to the Court;

(ii) even where proportionate a limitation should not be such as to make it virtually impossible or excessively difficult to access the court.

3. The test applicable to the lawfulness of the fee system

The second principle was in issue in the current case (paragraph 44):

The argument in this case is that there is no effective right of access. The imposition of a fee in order to help pay for the service is plainly in principle a legitimate aim designed to ensure that the users of the service make a contribution towards its costs. The only issue in my judgment is whether it does in practice make access impossible or exceptionally difficult. The cases on disproportionate limitation do not in my view bear on that test.

4. The outcome: Applying the high standard to the facts: Lord Justice Elias stated that (at paragraph 60):

The figures demonstrate incontrovertibly that the fees have a marked effect on the willingness of workers to bring a claim but they do not prove that any of them are unable, as opposed to unwilling, to do so.(emphasis added)

5. Access to Justice

For those interested in human rights law, the principle of effectiveness will sound strikingly similar to the principles underpinning Article 6 guarantees of access to justice. In fact, the Divisional Court noted that while not expressly framed as an Article 6 case, it might have been (see paragraph 24) and appears to have applied Article 6 considerations to the question of effectiveness: see paragraph 43.

6. Fee remission

Within the Employment Tribunal fee system is only available to those with less than £3,000 in assets including the assets of their spouse or partner after allowing for a 10 per cent cost of sale (paragraphs 19-20).

7. The Lord Chancellor’s discretion

The Court decided that it was significant that no actual individual’s case was evidenced by the claimant and neither was there any evidence that the discretion reserved to the Lord Chancellor to waive the fees had been called upon (see paragraphs 22 & 63). This is an aspect of the case that may be revisited particularly in light of the recent decision in relation to a similar discretion in relation to civil legal aid: see the post here.

8. Discriminatory Effect

Unison advanced an argument that fees represented an indirect discriminatory barrier to the Employment Tribunal claims of women in the workforce. Indirect discrimination occurs when an apparently neutral provision criterion or practice has a disproportionate impact on a protected group (section 19 of the Equality Act 2010). Lord Justice Elias doubted that the claimant had established a prima facie case on the evidence available and concluded that in any event such minimal disparate disadvantage could be justified: see paragraph 81.

Justification requires the Court to test whether the provision criterion or practice – while discriminatory in effect – can be justified as a proportionate means of achieving a legitimate end. Lord Justice Elias noted that the key aim of the Lord Chancellor was saving cost (not sufficient justification on its own) but went on to conclude that this aim was allied to the aim of encouraging settlement of claims (paragraphs 82-90); an objective the Lord Chancellor was also pursuing through compulsory early conciliation (paragraph 83).

Comment and Analysis

1. Cost alone approach:

Those familiar with the justification of discrimination will also be familiar with the debate surrounding a cost alone as opposed to a ‘cost-plus’ approach, the development of which is controversial. However, it must be doubted that there is a meaningful distinction between fees on the one hand – which reduce cost to both government, in running the Employment Tribunal system, and employers in defending claims – and the requirement on claimants to enter early conciliation on the other, as both requirements unquestionably serve the same identical dual aims. Further, and with due respect to the Court, they are requirements whose aims are grounded in cost alone.

2. Statistical Evidence

While there is some force in the argument that real rather than hypothetical cases ought to test the restriction on access to the court – and also perhaps the discriminatory effect (although discrimination law is accustomed to hypothetical comparison) – the statistical analysis is startling. Even the Lord Chancellor accepted that fees were causative of a 60 per cent reduction in case being brought in the Employment Tribunal (see paragraph 57) and that cannot be explained by weak cases or the whimsical choices of putative claimants. Practitioners will report anecdotally that fees (like deposit orders, and costs warning before the introduction of fees) do not deter determined but misguided claimants with inherently weak claims. The natural inference is that while fees might deter some weak claims, they are also deterring those with otherwise legitimate grievances from seeking redress in the Employment Tribunals. It is arguable that this issue will only ever be evidenced adequately either anecdotally or statistically (the latter must be preferable). Faced with individual cases, the Lord Chancellor would no doubt argue they are atypical.

Lauren Godfrey is a barrister at Crown Office Row Brighton

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