The price of justice

An attempt to dissuade false claims of unfair dismissal has tipped the balance too far against employees

The judicial system in England and Wales is expensive. As the Government looked for ways to balance the books after 2010 it was perhaps inevitable that it would seek to trim the costs that legal services load on to the public purse.

Cuts to legal aid have already caused considerable unease. Now, a year after the Government introduced fees for claimants in employment tribunals, the Trades Union Congress (TUC) has launched a blistering attack on what it argues is a policy which aimed to cut costs (and protect employers) even at the expense of justice.

It is no surprise that the TUC should be critical. Its role, after all, is to protect workers’ interests; anything which might hamper employees’ rights is bound, therefore, to fall squarely within its sights. However, a fall of 73 per cent in the number of employment claims lodged in the six months to March when compared with the same period in the previous year is startling. With Citizens Advice also warning that legitimate cases are foundering as a result of claimants’ inability or unwillingness to pay a fee, the Government must investigate further as a matter of urgency.

Needless to say, the situation is not quite as clear-cut as the TUC would suggest. Some employment-law experts have suggested that the introduction of the new regime is only one reason for the fall in claims being made. An increase in the qualification period for unfair dismissal to two years in 2012 may also have had an impact, while small-claims courts are apparently be being used as a cheaper substitute in some contract disputes.

It is also hard not to believe that there have been abuses of the system in the past, when individuals brought claims with limited merit in the knowledge that employers might find it simpler to settle than to fight all the way to a hearing. The Government’s changes to the system were, in theory, a legitimate attempt to tackle that kind of exploitation as well as being a means to reduce the costs burden for the taxpayer. Moreover, claimants with little in the way of savings and those on a low income can be exempted from the usual tribunal fees.

Nonetheless, it is patently absurd that in some instances a claimant must pay a higher sum in obligatory fees than the value of their claim. Since the fees are, apart from in exceptional cases, non-recoverable, such low-value (but high-principle) cases will increasingly fall by the wayside. That in turn will bolster the impression that the workings of our legal system are driven by considerations of cost, rather than justice.

In addition, while the cost of bringing a claim in relation to more minor cases is less than £400, that is quite enough to put off plenty of low-paid or irregularly employed workers. More serious claims, relating to unfair dismissal, for instance, can incur a fee in excess of £1,000. It would be disastrous if employers felt emboldened to become more cavalier in the treatment of their workforces.

Vexatious litigants can tie up the courts just as much as red tape. But the fall in the number of tribunal cases is too dramatic to be explained by the removal of unmerited claims alone. If real wrongs are to be properly addressed, the level at which fees were set last July must be re-examined.