Since the Supreme Court’s decision on 26 July 2017 that the existing scheme of Employment Tribunal fees was unlawful, the future for employment claims has been in a state of flux. In our article in September 2017 “Tribunal fees: should you prepare for a deluge of claims and what happens next” we joined the speculation about what would happen next.
What more do we know a couple of months on?
Repayment of Fees
The government has given an estimated figure of £33 million (including interest) to reimburse those who paid fees and, as reported in our recent blog, they made a start at confirming how this was to be done.
Rather than try to deal with all repayments at once, this will be done on a phased basis. From 20 October 2017, approximately 1,000 will be written to by Her Majesty’s Court and Tribunal Service (HMCTS) and invited to apply for reimbursement as part of the opening phase. The HMCTS is also working with Trade Unions who may have supported large multiparty claims. Those entitled to a refund will also receive interest at a rate of 0.5% from the date of the original payment.
In addition to this, HMCTS is allowing parties to pre-register their interest in applying for a reimbursement when the full scheme has been rolled out.
The original phase of the scheme is expected to be rolled out by 20 November 2017 and more details will be made available then. We understand that the scheme will cover both claimants and respondents and fees in the EAT as well as the Tribunal. To avoid double recovery, the applicant will have to sign a declaration to confirm their entitlement and that they have not already been reimbursed through a costs award.
If a respondent received a judgment to pay a claimant’s costs to cover their fees, then this will be included in the scheme, but it is not expected to cover the complex issue of payment of costs through a settlement agreement.
“Zombie” Claims
There is much speculation that employers could now find themselves facing claims that were originally struck out due to claimants failing to pay the necessary fees, or even claims that were never brought (as the potential claimant was dissuaded by the fees scheme). As yet, the government have not said what their plans are for these so called “Zombie” claims”.
HMCTS should hold a record of claims that were originally struck out and it is expected that they will write to claimants asking if they wish to have them reinstated. It is reported that there is estimated to be approximately 7,500 claims of this type.
Of course, HMCTS cannot write to people who were deterred from bringing a claim because of the fees, but it appears possible that attempts may be made to resurrect these (despite the obvious time limit issues). The President of the Employment Tribunals (England and Wales) stated that these out of time claims should “proceed to be considered judicially in accordance with the appropriate legal and procedural principles in the usual way”. Nonetheless, a claimant wanting to do this will be expected to show that they could not afford the fees at the time, and had no other option to finance the claim. Tribunals are likely to consider if the individual had applied for fee remission and had initiated early conciliation with ACAS.
Employers are likely to face difficulties in defending historic claims, particularly if key witnesses have left or if the passage of time has affected witnesses’ ability to recall events in sufficient detail. In such cases, they will look to resist attempts to resurrect claims, arguing that it is now no longer possible to have a fair hearing.
Deluge or drip?
The Tribunal will not publish their figures for claims for July - September 2017 for a few weeks yet. It will therefore be some time before we can accurately analyse what impact the lifting of fees has had on the number of claims brought.
In the meantime, it has been reported that the East London Employment Tribunal received double the amount of claims in August 2017 than it did in August 2016 and there has been a two / three hold increase in claims in the Yorkshire and Humber region.
A new fee system?
Currently, there have been no signs of the introduction of a new fee system.
Interestingly, when asked in the House of Commons about ways of preventing weak claims being brought, rather than suggesting a new fees system Mr Rabb stated that the Early Conciliation System has had a strong impact on reducing the number of Tribunal claims and suggested reinforcing the role of ACAS. Therefore, one of the consequences of removing Tribunal fees may be the strengthening of the rules on Early Conciliation.
We will continue to keep you updated as to any developments in this area.