16 August 2017 |King’s Legal Clinic

On 26 July 2017, the Supreme Court in R (on the application of UNISON) v Lord Chancellor [2017] UKSC 51 ruled that the implementation of fees in the employment tribunal was unlawful, under both common law and EU law. Lord Reed and Lady Hale, with the support of their fellow justices, gave the explanation behind deciding the fees were unlawful.

After setting out the background to the claim and how “the constitutional right of access to the courts is inherent to the rule of law” (para. 66 of the judgment), Lord Reed went on to set out the objectives for initially implementing fees in the employment tribunal. There were three key aims that influenced the enforcement of fees:

(1) Transferring the cost burden

The primary aim was to shift the burden of financially supporting the tribunal system away from taxpayers and on to users of the tribunal system or those that caused the system to be used.

(2) Deal or No Deal

Secondly, the hope was that the prescription of fees would act as an incentive for potential users to amicably settle their cases early; preferably even before a claim had been lodged in the tribunal.

(3)  Preventing unreasonable behaviour

Thirdly, the introduction of fees was aimed at discouraging potential users bringing claims that were legally unarguable or tenuous, particularly those users who repeatedly lodged such claims.

By preventing unnecessary claims being brought and shifting the financial burden, the idea was to free up and/or create tribunal resources that could secure greater access to justice.

The Decision

The statutory basis for the implementation of fees is s.42 of the Tribunals, Courts and Enforcement Act 2007 (TCE 2007 Act). Lord Reed explained, at paras. 86 and 87 of the judgment, that although:

“Fees paid by litigants can…reasonably be considered…a justifiable way of making resources available for the justice system…The Lord Chancellor, cannot…lawfully impose whatever fees he chooses in order to achieve those purposes.”

Lord Reed goes on to explain that “…if there is a real risk that person will effectively be prevented from having access to justice” then ordering the enforcement of fees in the employment tribunal will be beyond the power of the Lord Chancellor (‘ultra vires’). Lord Reed concluded that this in fact would occur because s. 42 of the TCE 2007 Act does not explicitly authorise the prevention of access to justice through the imposition of fees.

Furthermore, the fees would only be lawful if they are “…set at a level everyone can afford, taking into account the availability of full or partial remission” and based on a the evidence that had been presented before the justices, it was decided that that requirement had not been met (para. 91).

Lady Hale seemed to suggest that the fees were likely to be also indirectly discriminatory in accordance with the meaning under s.19 of the Equality Act 2010.

It was proposed that the fees were more discriminatory towards women because they tended to bring a higher number of claims that fell within the Type B category (e.g. discrimination claims and pregnancy dismissals). The higher fee for Type B claims compared to Type A claims (e.g. unfair dismissal and unpaid wages) meant that women were at a particular disadvantage compared to men. Additionally, whether imposing higher fees for Type B claims was consistent with the aims for implementing fees as set out above.

However, as the justices had decided the implementation of fees altogether was unlawful, Lady Hale stated that it was “…not necessary…to resolve this question in these proceedings…And in any event, it is excepted that the higher fees generally have a disparate impact…”.

Final Thoughts

I think that the Supreme Court justices delivered a very well rounded judgment; balancing the reasonable aims behind introducing the fees against the actual realities of those fees having been implemented. I think it was important that the justices made it clear that, in this case, access to justice could not be compromised because the use of fees was not proportionate in attempting to increase tribunal resources.

It will be interesting to see whether the removal of fees in the employment tribunal will result in a surge of claims being brought. Or whether, in addition to the use of fees, the process of trying to bring a claim to the employment tribunal will still mean that claim numbers remain fairly stable or only increase slightly.

Furthermore, whether there will be a knock on effect to challenge the use of fees in other court systems like the magistrates’ courts for criminal cases or the first-tier tribunals for immigration & asylum cases.

Only time will tell.

By Deborah Acquaah | Legal Clinic Coordinator