Working Theory

by Michael Reed

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I do employment law for the Free Representation Unit.

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michael at workingtheory.co.uk

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We've accidentally disproved the case for nominal fees

26 September 2014

Before the introduction of the current fees a number of people argued a system in which claimants had to pay a fairly nominal fee to start a claim. Proposed figures varied around the £50-£200 range. This idea also gets mooted as an alternative the current fees regime.

The argument for nominal fees is that paying a small fee would focus people’s minds on whether their claim was really worth bringing; encouraging people to resolve cases outside the tribunal; to get advice and not to bring weak claims.

In theory, this may have sounded sensible. But the current fees system shows that it isn’t likely to work – at least in relation to discouraging weak claims.

At present, you need to pay at least £390, and more likely £1,200, to pursue your claim. The fees just to lodge a claim is £160 and £250 respectively. Fees are well above the level anyone could describe as nominal.

And yet, the outcomes of cases aren’t shifting.1 If draconian fees don’t weed out weaker cases, why would nominal ones?

Fees do make people think twice. It would be strange if they didn’t. But that this doesn’t help in the absence of proper advice. It’s hard to assess your own employment tribunal claim. You probably don’t know much employment law and, even if you do (or can find out a bit) it’s difficult to make cool-headed decisions about your own case.

For most people, good employment law advice is hard to find. Legal help has been cut; the advice sector is struggling and solicitors cost money.

When people can’t accurately assess the strength of their case trying to use fees to encourage them not to bring weak claims can’t work. Incentives only make sense if people can do whatever you’re incentivising them to do. Otherwise it’s like demanding a fully colourblind person press the green button, but on no account touch the red one.


Hat tip to Hannah Reed, Senior Employment Rights Officer at the TUC, who gave a talk to employment advisers at the Trust for London, arguing against nominal fees, that got me thinking about the topic again.

  1. See my previous post and Richard Dunstan’s post on Hard Labour.

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