MoJ’s new line on ET fees as spurious as the old one

As if further proof were needed, the latest set of quarterly tribunal statistics – released by the Ministry of Justice on Thursday – confirm the dramatic impact of the employment tribunal (ET) fees introduced in July last year. For the third quarter in a row, the number of new ET cases is down by 65 per cent or more, compared to the same quarter a year ago. Over the nine months immediately prior to the introduction of fees, 44,000 employers had an ET case brought against them. But over the nine months up to June 2014, just 15,750 did.

As can be seen from the following chart, this is unquestionably a sudden and dramatic decline. Back in March 2013, the Department for Business, Innovation & Skills (BIS) noted that ET cases are “relatively rare”. They’re a lot rarer now.

Chart 1: Single claims/cases & multiple claimant cases (= total number of respondent employers), April 2012 to June 2014

casesSource: Table C1 of Annex C to Tribunal Statistics: April to June 2014, Ministry of Justice, September 2014.

Think of it this way: on average, each of the UK’s 1.21 million employers now faces an ET case just once every 58 years.

In the face of such evidence, the Ministry of Justice now seems to have abandoned its laughable initial line that this pattern is no more than a long-term downward trend. Conservative ministers such as Matt Hancock now proudly acknowledge the scale and suddenness of the decline, but seek to suggest it is no cause for concern as all the thousands of cases ‘lost’ to fees since July 2013 are simply vexatious or spurious claims that should not have been brought anyway.

Until the release of this week’s set of tribunal statistics, this was not an argument that was readily susceptible to disproof by analysis or chart, as that requires data on claim/case outcomes and – due to the time taken to process cases through the system – such outcome data lags at least two quarters behind that on new claims made. But the latest quarterly data – relating to the period April to June this year, so up to almost one year after the introduction of fees – allows us to start putting the new ministerial line to the test. For we can be reasonably confident that the great majority of the claims resolved in this quarter will have been issued after July 2013, not least because the dramatic fall in the number of cases has reduced the average time taken to resolve most types of claim.

If ministers are right, and fees have simply cut out all the vexatious and spurious claims, but have had no effect on access to justice by workers with meritorious claims, we would expect to see substantial shifts in the proportion of cases that are ultimately successful (whether at a hearing, by a default judgment, or through settlement), or unsuccessful. Indeed, we would expect successful claims to be heading towards 100 per cent, and unsuccessful claims towards zero.

So, what does the this outcome data tell us? Well, the following chart compares outcomes in the period April to June 2014, to the same quarter a year ago (i.e. immediately prior to the introduction of fees), and to previous full years. And from this it is clear that the introduction of fees has had no significant impact on outcomes (at least, not yet). Whilst the proportion of successful claims has increased slightly since the same quarter a year ago, from 13 per cent to 17 per cent, it’s still no higher than in any full year since 2007-08. And the proportion of unsuccessful claims is down, but only marginally so. (Note that the only significant changes evident in the chart – those in the proportion of cases settled by Acas, and withdrawn – not only cancel each other out, but pre-date the introduction of fees in any case).

Chart 2: Outcomes of ET claims (singles & multiples).

outcomesSource: Table 2.3 in Tribunal Statistics: April to June 2014 (Tables), Ministry of Justice, September 2014.

In short, not only is there no evidence whatsoever to support the new ministerial line – hardly a unique occurrence under this evidence-averse government – but the only available evidence shows it to be a pile of pants.

I imagine that some in government (and elsewhere) will try to claim that it is still too early to tell. But that is a weak argument that will get ever weaker with the release of each new set of quarterly tribunal statistics.

Or, as Alice might have said, spuriouser and spuriouser.