30th May 2013
Running the employment tribunal system costs the taxpayer annually around £84 million. The Government announced in 2011 that it wanted to pass some of this cost onto those using the employment tribunals and it proposed a fee charging structure. This has now received royal assent and with effect from Monday 29 July 2013 claimants bringing a claim in the employment tribunal will be required to pay a fee on issue of their claim (between £160-£250) as well as a hearing fee (£230-£950) if the case progresses to a final hearing. The level of the fee will depend on the type of claim and claimants who can’t afford fees will be able to apply for a waiver of the fee. Employers will also have to pay in certain circumstances such as judicial mediation or appealing a tribunal judgment.
Currently, it is relatively easy for an employee to start a tribunal claim and sometimes they do so speculatively to see if their employer will make an offer of settlement rather than become embroiled in legal proceedings. The introduction of fees is bound to make employees (if they don’t qualify for the fee waiver) think twice about bringing ‘nuisance’ claims. Another likely effect is that there could be a decline in early settlements as employers may adopt a ‘wait and see’ approach.
However, it is not all good news for employers as the costs of settling a tribunal claim may rise as employees are likely to request that the terms of settlement include reimbursement of their tribunal fees. Furthermore, an employee who has paid the hearing fee (required 4-6 weeks before the hearing) may take a more entrenched view towards litigating their claim and prefer to chance their luck at the tribunal rather than accept a settlement offer which they don’t consider reasonable.
The contents of this update are intended as guidance for readers. It can be no substitute for specific advice. Consequently we cannot accept responsibility for this information, errors or matters affected by subsequent changes in the law, or the content of any website referred to in this update. © Mundays LLP 2013.
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