Working Theory

by Michael Reed

Me?

I do employment law for the Free Representation Unit.

Email?

michael at workingtheory.co.uk

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The fees escarpment

18 March 2014

The headline figure is that employment tribunal claim receipts – October to December 2013 – dropped 79% compared with the same period in 2012.1

Richard Dunstan has pointed out that, if you’re judging the impact of fees on ‘the average / normal claimant’, the more representative figure is single claims. Over the same period these have reduced from 13,862 to 4,961; a reduction of 64%.

But why has there been such a big drop? My estimate, at the point fees were introduced was that we’d see a reduction of 20-30%.

The government’s impact assessment guessed a drop of between 0.01% and 0.05%, per pound of fee. So they thought a reduction of 12-60% in type B claims. But that estimate was for those who had to pay the full fee. Accounting for those claimants they estimated would gain remission (26%), their estimate was a reduction of between 9% and 44%.2

This reflects my memory of the general consensus. Everybody thought there’d be a substantial drop. Most people were suggesting something between 25% and 50%.

A 64% drop just makes little sense to me. Even knowing that it’s happened, I’m not sure how to explain it.

Obviously fees were always going to be a powerful disincentive. But not in all cases. Some tribunal litigants are rich. If you’re bringing a City discrimination claim over hundreds of thousands of pounds, it makes no sense to be put off by the fees. At the other end of the scale, many poorer litigants are entitled to remission. In the main, they shouldn’t be put off by a fee that they don’t have to pay. Then there are trade union claimants, some of whom are having fees paid by the union. Finally, there will, inevitable, be some claimants willing to pay the fee, either because they believe its a logical investment in a valuable case, or out of cussed determination to enforce their rights (or a combination of both).

It seems to me that these groups, together, should add up to more than 36% of the previous level of claims.

So what is going on? I don’t know, but here are some possibilities:

Remission process is delaying the acceptance of claims

Claims are only included in the statistics once they’ve been accepted by the tribunal system. This means only once a fee has been paid or remission granted. Which means that there is a delay between a claim being presented and it being included in the statistics.

The current statistics go up to December 2013 and were extracted some time in March. I think we can assume that, they include all the claims where the fee was paid when the claim was lodged and where remission was granted on the basis of the initial application. But they won’t include at least some cases where remission has been refused and more information provided or the decision appealed.

So the numbers will almost certainly be revised upwards. But by how much?

It’s tea-leaf reading, but I think only slightly. Even those cases received right at the end of 2013 have been in the system for at least two months at the point these statistics were produced. Most will have been there for much longer. Given the fairly positive things said at the last National User Group meeting about remission processing, I’d be surprised if it’s taking that long to process a substantial proportion of claims – even allowing for appeals.

Further, the monthly statistics show a rise from October to November, then a relatively small dip for December (which was also a quiet month in 2012 – and I suspect always is because of Christmas). If there was a substantial number of remissions building up, I’d expect the earlier months to have more cases, not fewer, because more of their remissions would have been dealt with.

So, while it wouldn’t surprise me if the December figure went up by a few hundred claims, I doubt we’ll see any substantial change when these figures are revised.

Remission is keeping more people out than we thought

One of the key concerns prior to the introduction of fees was that litigants would have difficult navigating the remission process and producing the necessary evidence. Another key concern was that HMCTS might not be very good at making these remission decisions, particularly since employment litigants were disproportionately likely to be entitled to a remission, despite not being on a passported benefit.

My anecdotal experience is that claimants are finding the process hard to manage and some decisions from HMCTS look a bit questionable. I wouldn’t say, on the basis of that experience, that I’d expect it to cause this sort of drop. But it might explain some of it.

People are put off by fees they don’t have to pay

The other, related possibility, is that people who are eligible for remission know about fees, but don’t realise that they won’t have to pay them. The introduction of fees received a certain amount of publicity. The existence of fees is simple to understand and remember – while the detail of remission is not.

I’m sure this is happening to some extent, but I don’t think it explains much of the drop. Most people, frankly, are not following the ins and out of employment tribunal policy. I strongly suspect a survey of the population would show a lot of people have no idea whether there are fees or not; a lot who think the old, no-fee regime is still in place and a lot of people who think you’ve had to pay a fee for many years. There will be some people who’s heard about fees, but don’t think of remission, and who don’t check or seek other information. But I suspect it’s a small minority.

This also reflects what I’m hearing from people on the front-line of advice – both solicitors and the voluntary sector. They tell me that the number of people seeking advice hasn’t changed.

Something else

I’m not convinced that any of this is the right answer. Or at least not the complete answer. I do think there is some dynamic in play – beyond just the fact of the fees or the issues I suggest above. We might learn more from a further round of statistics. Or from any research into the post-fee tribunal system. Or from the accumulation of anecdotal experience.

Or we might not. The employment tribunal is a complex system and we’ll never fully understand why litigants act as they do.

The future

I think at least some of the present decline has to do with the short-term shock impact of fees. I think the numbers will go back up. The big question is how quickly (I’m guessing slowly) and how much (I’m guessing significantly, but not dramatically). Time will tell.

  1. Tribunal Statistics (quarterly) – October to December 2013

  2. This is a significant simplification. It ignores partial remission. And the fact that, in relation to type A claims the government estimated the decrease would be smaller, because of the smaller fee.

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