UK: Employment tribunal fees - plans confirmed for Summer 2013

The government has confirmed its proposals for tribunal fees following public consultation. From Summer 2013 claimants will have to pay an "issue" fee when they submit their claim or appeal followed by a "hearing fee" prior to a hearing. The aim is for tribunal users to bear more of the cost burden and, by using a two stage structure, to provide a second incentive to settle.

The level of fee will be determined by the type of claim.  The fee for more straightforward "Level 1" claims (including claims for breach of contract, unauthorised deductions from wages, holiday pay, various statutory time off rights, and failure to pay a protective award or redundancy payment) will be £160 for issue, £230 for the hearing.

All other claims will be "Level 2" (covering unfair dismissal, discrimination, whistleblowing claims) and subject to an issue fee of £250 and a hearing fee of £950.

The intention is to require the hearing fee to be paid around 4-6 weeks prior to the hearing, to balance allowing time for settlement with avoiding wasted costs when hearings are cancelled, but the Government has indicated that it is still considering this point in light of comments that settlement is more achievable after exchange of witness statements.  It will also review whether the same timing is appropriate for both levels of claim.  

The Government's announcement does not address what happens where a claimant submits a Level 1 and Level 2 claim together.  The original consultation proposal was that a single fee at the higher level would be payable.

The fee is multiplied by up to 6 where multiple claimants are bringing a claim, depending on the number of claimants.

There will also be charges for making certain applications:

• £100 for an application to set aside a default judgment
• £60 for an application to dismiss a claim following the claim's settlement or withdrawal. This will cost £60. (Note that proposed changes to tribunal rules will do away with the need to make such an application.)
• £600 for an application for judicial mediation, payable by the employer
• £160 to bring a breach of contract counter-claim
• £100  (Level 1) or £350 (Level 2) for an application for a review of a tribunal's decision or judgment.

The proposal to charge for written reasons has been dropped.

In the EAT there will be a fee of £400 to issue an appeal and £1,200 to proceed to a full hearing.

The civil courts fee remission scheme will be extended to the employment tribunals for claimants who cannot afford the fees. A full public consultation on remissions will be published in the autumn of 2012.

Tribunal judges will have a discretion to order the unsuccessful party to reimburse the fees paid by the successful party; guidance on reimbursement will be produced.

The jury is out as to whether claimants will be deterred from making justified claims by the fees proposed and how much revenue will actually be generated given the administrative cost.  What is certain is that the significant hearing fee is likely to impact on timing and tactics for settlement negotiations.