When is an ET claim not a claim? (Answer: When it’s part of a case)

For some years now, policy debate around reform of the employment tribunal (ET) system has been befuddled by confusion – some of it inadvertent, some of it wilful and malevolent – about whether the system’s workload should be measured in terms of the number of claims, or the number of cases – which includes the relatively small number of multiple claimant cases consisting of tens, hundreds or even thousands of claims. In 2011 and 2012, the Conservative/Liberal Democrat Coalition grubbily presented its erosion of the legal protection against unfair dismissal and introduction of hefty tribunal fees as necessary responses to ever-rising numbers of ET claims, even though the number of ET cases (mostly comprised of single claims by individual workers) peaked in the last year of Gordon Brown’s Labour government and fell in each of the Coalition’s five years, reaching a near-historic low even before the evisceration from July 2013 onwards due to fees.

With both claim and case numbers having hit rock bottom since the introduction of both fees (in July 2013) and Acas early conciliation (in May 2014), and the Ministry of Justice having switched to regarding case rather than claim numbers as the most meaningful measure of the ET system’s workload, the distinction has become somewhat less significant, and last month I paid little more than cursory attention to the latest set of quarterly ET statistics, covering the period July to September 2015. For the number of cases was remarkably similar to previous quarters. Move along, nothing to see.

But an article in the Guardian earlier this week by the campaigning journalist Frances Ryan – about how, thanks to fees, disabled workers cannot afford to challenge workplace harassment and discrimination – had me scurrying back to add the monthly figures for July, August and September 2015 to these three charts, created when the latest available figures were those for April to June:

disability

sexorientation

race

Clearly, LGBT and ethnic minority workers cannot afford to challenge workplace harassment and discrimination any more than disabled workers. However, when it came to summing these and other monthly figures to add Q2 2015-16 to the following chart, I noticed something my cursory study of the Ministry’s spreadsheets in December had missed. Whereas in most discrimination jurisdictions the claim numbers were little different to those in previous months, as shown above, the number of age discrimination claims shot from 93 in May and 85 in July, to 11,415 in September. With the result that the total number of discrimination claims, not including equal pay claims, rocketed from 875 in May, and 1,047 in July, to 14,020 in September.

AllDisc

From which – especially if you are, say, a super-intelligent but rather slow-reading Parliamentary Under-Secretary of State for justice, or a crack reporter at HR Director, the Solicitor’s Journal or the Law Society’s Gazette – you might conclude that the ET caseload has finally ‘rebounded after its post-July 2013 slump’ as ‘claimants adjust to the fees’.

Except it hasn’t, of course. Claim numbers don’t just leap from a 12-month average of 80, to 11,415 – at least, not in any meaningful way. My first thought was that it must be a data input error (of which there were several in the previous quarter’s set of statistics). But then I looked at the figures for equal pay claims, and saw that they also rocketed, from 359 in May and 529 in July, to 11,471 in September.

Yet, over the same period, the total number of ET cases fell, from 1,555 in May 2015, to 1,453 in August, and 1,433 in September. How does that fit with the stellar increase in age discrimination and equal pay claims in September?

Most people reading this won’t need me to spell it out, but just in case you are junior justice minister Shailesh Vara MP, or Emma Burns of Hugh James Solicitors, or David Barr QC of Temple Garden Chambers, here’s the explanation. In September 2015, when the number of multiple claimant cases was at a record low – just 80, compared to a pre-fees monthly average of 450, and a more recent monthly average of 171 – there were one or two exceptionally large such cases, involving a total of some 11,400 claimants bringing claims for both age discrimination and denial of equal pay. That case (or cases) aside, everything else continued much as before. So, there was no associated stellar increase in the workload of the ET system – which will have to determine only a handful of lead claims from among the some 11,400 claimants in that unusually large case (or cases) – even though the updated charts for age discrimination and equal pay claims now look like this:

age

pay

All of which is a rather long-winded way of saying it’s about bloody time HMCTS started breaking down its figures for jurisdictional claim receipts, so as to distinguish between ‘single claim receipts by jurisdiction’ and ‘claim in a multiple claimant case receipts by jurisdiction’. We have these things called computers these days, which can easily make such distinctions, at minimal cost. We should use them.

Oh look, a new set of quarterly ET statistics …. zzzzzzzzz

Warning: This post contains selected statistics, taken in isolation and out of context (© S Vara)

I have already written here about how yesterday’s latest set of quarterly tribunal statistics has cast yet more doubt over whether we humans will ever solve the Hancock Theorem, the last great unsolved mathematical puzzle of our time. But that post contained only two charts. And that is never enough to satisfy Gem Reucroft. So here are some more. With new colours!

ET case numbers are now really, really boring

Never mind the denial of justice, just look at the stability! Great for management planning. In Q2 of 2015/16, there were 4,345 single claims, just 58 fewer than in Q1. Such uniformity is unprecedented, and suggests ET claim/case numbers really have hit rock bottom.

ETmonthlyDec

Except ….

One story partly hidden in the above chart is the long, slow death of the multiple claimant case – that is, the kind of case that, in 2011, provided Coalition ministers with their bogus reason to introduce fees.

MCCs

Have such multiple claimant cases been displaced to the civil courts by fees? Or have Stefan Cross QC, and the trade unions, simply run out of local authorities and NHS trusts to bring equal pay claims against? I haven’t got a clue, but someone who must know is Shailesh Vara, the cleverest man in the Government, who’s been reading the report of his Ministry’s post-implementation review of ET fees for the past two months. One paragraph at a time, it seems.

One day – quite possibly within the next year or two – Mr Vara will get to the end of the report, and will then tell the rest of us what it says. Maybe it just doesn’t have enough colourful charts for someone of Mr Vara’s intellect. They could have asked me!

In the meantime …

… while the junior injustice minister makes his stately progress through the post-implementation review report, as of the end of September 2015 the number of single ET claims/cases ‘lost’ to fees since July 2013 was somewhere between 52,290 and 58,380. But then my projections are so selective and out of context. And, in any case, according to the Hancock Theorem, not one of those 52-58,000 claims would have been well-founded.

Yes, the ability of the Ministry of Injustice to calibrate their ET fees so precisely as to weed out up to 58,000 vexatious and otherwise unfounded ET claims without denying access to justice to one single exploited worker makes the RAF’s Brimstone missile – now pounding Syrian sand into even smaller grains of sand with great if highly expensive accuracy – look like, well, an unguided missile.

Proj

 

Impact of ET fees: a Hancock and bull story

Warning: This post contains selected statistics, taken in isolation and out of context (© S Vara)

So, today the Ministry of Injustice has coughed up another set of quarterly tribunal statistics – this one covering July to September 2015 (Q2 of 2015-16) – and we can hammer a few more nails into the coffin of that wonder of Tory intellectual thought, the Hancock Theorem of Vexatious ET Claims.

According to the second cleverest member of the Government – I’m sure Mr Hancock himself would concede top place to that titan of intellect, injustice minister Shailesh Vara – the success rate of employment tribunal (ET) claims should by now be bobbing around at or just below 100 per cent, all the vexatious and otherwise unfounded claims having been weeded out by the hefty, upfront fees introduced by the also very clever Chris Grayling in July 2013.

Unfortunately – not that the Cabinet Office minister gives a flying fuck – the Hancock Theorem has not been supported by the Ministry of Injustice’s own figures, even when taken in context. These have so far suggested that, far from going through the roof, the success rate has fallen significantly since mid-2014. Oops.

And today’s new figures will not increase Mr Hancock’s chances of winning the Fields Medal. Once again, in what is the sixth quarter since we could first have expected to see the impact of fees reflected in the outcome figures, the overall success rate – that is, including claims conciliated by Acas, or settled – is well down on pre-fees levels (but, at 63%, is one whole percentage point up on the last two quarters, so maybe there’s still some hope for the Hancock Theorem).

At 14%, the narrow measure of success is also down on pre-fees levels – and certainly not zooming towards 100 per cent, as the Hancock Theorem predicts. And, at 37%, the proportion of unsuccessful claims is once again significantly up on pre-fees levels, despite all the weak and vexatious claims having been weeded out by fees.

Luckily for Gem Reucroft, who likes charts, this is best illustrated by means of two charts:

Overallsuccess

narrowoutcomes

 

Given that the Ministry statistics on which the above charts are based are highly selective, are taken in isolation and are 110 per cent out of context, I can’t really be arsed to explain the dotted lines in Q1 of 2015-16. But if you really need to know, all is explained towards the end of this previous post.

 

 

 

Hurry up, Mr Vara!

If you were travelling to work on the 159 bus yesterday morning, and the peace of your journey was ruined by a lot of swearing, moaning and face-palming by a clearly disturbed man in the front seat, then I apologise. Yes, that was me. And I was reading my print-out of the Hansard of Tuesday afternoon’s Westminster Hall debate on the impact of employment tribunal (ET) fees.

At that point, I hadn’t even got to the Alice in Wonderland contribution of the junior injustice minister, Shailesh Vara. My huffing and puffing was due to the failure of Justin Madders, who had initiated the debate, and other opposition MPs to grasp that, far from rising dramatically since the introduction of fees in July 2013 – as one could expect if the fees were deterring only ‘vexatious’ or otherwise weak claims – the success rate of claims has fallen significantly.

“If the objective of introducing fees was to weed out unmeritorious claims, the policy has been a failure. The success rate has not really changed,” said Mr Madders, before reiterating, a minute later, that “Ministry of Justice statistics indicate that success rates have in fact remained broadly the same, rather than increasing.” Mr Madders even flourished some of those Ministry figures, stating: “In the four quarters after fees were introduced, success rates were broadly similar at 9%, 9%, 5% and 13%.”

And Mr Madders wasn’t alone. Later in the debate, former Thompsons lawyer Jo Stevens noted that there is no evidence for ministerial assertions that fees are simply deterring ET claims by “people trying to make a fast buck” because “the success rate has stayed at the level it was at before the introduction of fees.”

Except it hasn’t. As set out ad nauseam on this blog, the success rate – however one measures it, and there are two ways of doing so – has fallen significantly in the four most recent quarters. I don’t recognise the four quarterly figures cited by Mr Madders, but if he really means the first four quarters after July 2013, then he is looking at the wrong quarters, for the simple reason that most of the claims decided in those four quarters were made before the introduction of fees. On average, it takes the system some nine months to determine a claim, so we can’t expect to see any noticeable impact of fees in the outcome figures – upwards or downwards – until about the middle of 2014. And, as the following chart shows, that is indeed when we see a sharp downwards change in the overall success rate.

Outcomes 2010 on

To be fair to Mr Madders and Ms Stevens, they are not alone in getting this wrong: Citizens Advice – which appears to have briefed the MPs – is guilty of the very same oversight. But then Citizens Advice hasn’t had an employment policy officer since 2013. These facts may or may not be related.

Anyway, I’m not going to repeat myself here, especially as the next set of quarterly figures will be published next week, and I will update my analysis of the data on outcomes then. But perhaps Mr Madders and Ms Stevens could spend five minutes reading the final section of this blog.

So, back to the real villain of the piece, the Parliamentary Under-Secretary of State for Injustice, Shailesh Vara. Luckily for Aviva, I had got off their bus before I got to Mr Vara’s contribution to the debate, otherwise I may have done it serious damage with my forehead. As noted previously on this blog, Mr Vara is not one of the Government’s most high-profile ministers. Apart from anything else, he’s one of the diminishing minority of MPs who don’t have a Twitter account, which begs the question: how on earth does he fill his working day?

Whatever Mr Vara does get up to in his Ministry office, it doesn’t appear to include reading the ET fees review report that was completed by Ministry officials and dumped on Mr Vara’s desk at least two months ago. Throughout his contribution to Tuesday’s debate, Mr Vara gave the impression that the review – belatedly launched in June – is still keeping his officials busy looking for ways to back up his evidence-free claim that “it is too simplistic to say that the fees [have been] responsible for the drop [in claim numbers].”

Yet, no sooner had I finished reading the Hansard, and recovered from the shock of learning that “criticism [of the fees] has tended to focus on selected statistics, taken in isolation and out of context”, that I came across the minutes of the 7 October meeting of the ET National User Group. And, according to Ministry official Bill Dowse, as recorded in the minutes, the review report was by then complete and “with the relevant minister.” Which is Shailesh Vara.

Screen Shot 2015-12-02 at 21.24.10

So, come on Mr Vara, don’t tell us what the review report might say. Tell us what it does say. We’ve been waiting long enough. Or are you waiting for the Justice select committee of MPs to give you cover?

 

The one in which Mrs Wonky and I are as one

Last weekend, as Mrs Wonky and I walked to the bus stop together – not something that happens very often – conversation turned to the abolition of the paper tax disc. We know how to live, do we Wonkies. How the ****, Mrs Wonky wanted to know, do the wardens know who to clamp these days?

I may have muttered something about digitalisation before we mwah-mwahed and went our separate ways, but it was quite early and I was busy trying to solve, in my head, an outstanding clue from that Saturday’s Guardian prize cryptic crossword. Well, the setter was Mrs Wonky’s half-sister’s daughter – the incomparable Arachne – so I was simply fulfilling familial duty. And cousin Sarah had come up with some crackers, such as: Principled Greek, close to Syriza, agreed to be bound by resolution (10).

Anyway, it turns out Mrs Wonky is a better policy wonk than I may have credited in the past. Because a few days later it emerged HM Government has lost some £80 million in car tax revenue in just 12 months, as the number of unlicensed vehicles has doubled. So much for digitalisation. As Mrs Wonky postulated, thanks to the absence of colour-coded paper tax discs the wardens now don’t know who the **** to clamp. Even with their hand-held, digitalised thingamabobs. And their Nazi uniforms.

Now, £80 million may not seem very much, especially when set against the £4 trillion that the suddenly profligate George Osborne will be splashing out on what remains of the Welfare State over the next four years. But it’s still quite a lot of money. It’s certainly more than Mrs Wonky and I bring in each year, despite our obvious brilliance. And, as I quickly realised – me being a genuine policy wonk, unlike Mrs Wonky, who works in what she calls ‘marketing’ but I still call ‘fundraising’ – it’s equivalent to about four years’ worth of abolishing the Coalition government’s employment tribunal (ET) fees.

Back in the happy-clappy days when even serious people like Sean Jones QC believed Ed Miliband would win the May 2015 general election and justice secretary Sadiq Khan would then reverse all of Chris Grayling’s stupidity, I suggested that the total cost of scrapping the hefty, justice-denying ET fees introduced in July 2013 would be in the region of £20 million per year. Net income from the upfront fees may be negligible – just £4.3m in 2014-15 – but the near 70% fall in case numbers has generated substantial operational cost savings.

So, £80 million could go quite a long way, if one was genuinely concerned that mistreated and exploited workers have access to justice, so as to ensure a level playing field for law-abiding employers. Especially if one was prepared to consider replacing the existing, grossly disproportionate ET fees regime with an income-generating, nominal fee regime for both claimants and respondent employers.

As Stephen Cavalier of Thompsons Solicitors noted in his oral evidence to the justice committee of MPs earlier this month (see Q127), “if the [ET] system is to be funded by users, it should be taken into account that employers are users, as well as claimants.” Such a pragmatic, balanced approach could replace much if not all of that £20 million per year cost of abolishing the current fees regime. So that £80m could last a lot longer than four years.

But then that would be giving in to the existential threat to the UK economy of the Vexatious Claim Ogre. So Michael Gove and his officials at the Ministry of Injustice probably won’t be going there. They are too busy looking for ways to throw millions of pounds down the toilet. Like abolishing paper car tax discs.

Anyway, here’s me and Mrs Wonky as one, at Grounds for Sculpture, New Jersey, August 2011:

OLYMPUS DIGITAL CAMERA

OLYMPUS DIGITAL CAMERA

Will the Justice committee prove to be au fait with access to justice?

We should perhaps take encouragement from the fact that, on the same day it published the transcript of its oral evidence session on the impact of the Coalition’s disastrous employment tribunal fees, the Conservative-majority Justice Committee of MPs also published a scathing report calling on ministers to scrap the Coalition’s disastrous criminal court charge. However, even a quick reading of the transcript reveals deep levels of ignorance and prejudice on the part of some committee members that may yet prevent delivery of a double-whammy to everybody’s favourite justice secretary, Michael Gove.

In particular, several Conservative members of the Committee appear unable to shake off their irrational fear of the patently non-existent Vexatious Claim Ogre. “What is the solution for the employer facing a vexatious complaint? What is your solution to that particular issue, which affects lots of small businesses around the country?” demanded Philip ‘filibuster’ Davies, blithely ignoring a mountain of actual evidence, from the 2007 Gibbons review of employment tribunals – which concluded that “weak and vexatious cases make up only a small minority of tribunal claims” – to any number of past statements by the Federation of Small Businesses (FSB) that the number of such businesses affected by a tribunal claim, vexatious or otherwise, is actually very small indeed.

In October 2014, for example, in its written evidence to the Small Business, Enterprise & Employment Bill committee, the FSB stressed to MPs that “only 3 per cent of our members were summoned before an employment tribunal between 2004 and 2009”, and in its oral evidence to the committee it happily noted that “a very small percentage of our members are damaged by tribunals, which is good news”. Indeed, as noted previously on this blog, at the time Coalition ministers decided (in 2011) to introduce hefty upfront claimant fees, the average private sector employer risked facing an ET claim about once every 27 years. Now, it’s about once every century. Can our valiant entrepreneurs really not cope with such minuscule risk? Maybe they should just stay in bed.

And before anyone says “yes, but 2004-09 is a long time ago”, Mr Davies himself had gone back to the last century to look for data that might prove the existence of the Vexatious Claim Ogre. In what must have been a frustratingly short intervention for a man used to talking non-stop for 52 or even 90 minutes at a time, Mr Davies stated that “between 1999 and 2005, the success rates for discrimination cases at employment tribunals were 28% for sex discrimination, 15% for race discrimination cases and 29% for disability discrimination cases. To most people, that would indicate that quite a lot of vexatious [claims] were being dealt with by the employment tribunals.”

Fortunately, Sybille Raphael of Working Families was on hand to point out to Mr Davies that his figures “do not take into account the far bigger number of claims that are settled, either during the tribunal process or before the tribunal process. They would not be settled if there was no tribunal there.” Shantha David of Unison noted that, in his written evidence to the Committee, the current President of the Employment Tribunals, Brian Doyle, had indicated “that only a very small percentage of claims can be [readily] identified as weak or unmeritorious, and that we need to be a bit careful about the way in which we bandy around the term ‘vexatious’.” Furthermore, Ros Bragg of Maternity Action noted that “we see no evidence that fees are effective in removing weak or vexatious claims”, and Rebecca Hilsenrath of the EHRC agreed that “there is no evidence of the fees having an impact on vexatious claims.”

I suspect that Sybille, Shantha, Ros and Rebecca would be more likely to convince the Pope that God does not exist than to rid Mr Davies of his faith in the Vexatious Claim Ogre, but some of the other myths about fees propagated by Matt Hancock and his mates in the tabloid press took a good pasting during the evidence session. Front-line practitioners Kate Booth of Eaton Smith LLP, Stephen Cavalier of Thompsons solicitors, and Shantha David all confirmed there has been no significant displacement of ET claims (such as breach of contract claims) to the county courts. And, in what may well prove to be the killer evidence to the committee, Kate Booth – who acts for both employees and employers – laid to rest the Ministry of Injustice’s canard that fees would “encourage the use of alternative dispute resolution services, for example, Acas conciliation”:

I sit on both sides of the fence. When I advise an employer, why would they engage in early conciliation? You wait for the employee to pay a fee. Ultimately you want to call their bluff – are they prepared to put their money where their mouth is? – so you sit back and see whether they do it. There is absolutely no incentive to engage early, unless you know you are going to go down. Why would you?

Stephen Cavalier confirmed that “fees have had the opposite effect [to that intended by ministers] – employers sit on their hands and do not engage”, while Sybille Raphael told the committee that, in her experience, “employers [now] wait until the very end – until the hearing fee is paid, three weeks before the hearing – to engage in meaningful discussions, wasting everybody’s time and the tribunal’s resources.” And Shantha David noted that “the average clearance times for multiple [claimant] cases are actually longer than they used to be.”

On fee remission, Emma Wilkinson of Citizens Advice noted that “the complexity of the eligibility requirements is particularly harsh for vulnerable [CAB] clients,” while Sybille Raphael told the Committee that “in our view the fee remission system is very unfair. For instance, if you have just above £3,000 in savings – I believe that we want to encourage people, especially low-paid employees, to save – you cannot benefit from fee remission. We have terrible cases of women who were sacked the minute they told their employers that they were pregnant, but cannot bring a claim for unfair dismissal because there is no way that they can spend nearly half their savings on a highly uncertain employment tribunal claim – especially when we know that, even if they win, there is a 50% chance that the employer will not pay anything, so she would be £1,200 worse off for having dared to claim her rights.”

On the question of whether the cost of the employment tribunal (ET) system should be “moved away from the taxpayer on to those who can afford it”, Sally Brett of the TUC gave the committee members a quick lesson on the wider social and economic benefits of the system:

Often a division is made between taxpayers and users of the ET system, but all taxpayers are potentially users of the ET system, [which is] a very important backstop to ensure that basic rights such as the right to the minimum wage, rights to paid holiday, rights to time off and maternity leave, and rights not to be unfairly dismissed or discriminated against are effective.

Those rights bring important social and economic benefits for this country. They ensure that more people can participate in the labour market without facing unfair discrimination. They give vulnerable workers more job security and stability of income. If there is not that ultimate sanction that employers may face if they breach employment rights, it encourages rogue employers to flout the law, which undermines and puts at a competitive disadvantage businesses that are striving to meet the [statutory minimum] standards or to exceed them and use good practice.

Hopefully, such evidence will help steer the committee towards the only just outcome of its inquiry, even if some of its Conservative members would personally much prefer to accept the laughable oral evidence of James Potts of Peninsula Business Services. Despite having to concede to Andy McDonald MP that he is “not au fait with the particular nuances of the [fee remission] system”, Mr Potts stuck to the line first set out in his firm’s evidence-free written evidence to the committee, that up is down and down is up, and “there really is not an access to justice issue” with fees because “access to justice is through the remission system” – the system, that is, with which he is not au fait.

Thieving an idea from FT journalist and legal blogger David Allen Green (see link in first paragraph, above), I can only imagine the conversation went something like this:

Tory member of the Committee: “So, this inquiry is to give Michael some political cover for a retreat?”

Bob Neill (Committee chair): “That’s right.”

Tory member: “In which case, we need the pro-fees evidence from the employer lobby to be really crap.”

Bob Neill: “We do.”

Tory member: “Peninsula Business Services?”

Bob Neill: “Make the call.”

 

 

 

 

Everything you need to know about the impact of ET fees, but are too afraid to ask

Since October 2013, when the UNISON legal team forced a reluctant Ministry of Injustice to cough up astonishing figures for the number of ET claims made in the previous two months, much has been written and said – not least by yours truly – about the impact of the ET fees regime introduced on 29 July that year. Most of this comment has focused on the sudden, substantial and sustained fall in the number of claims/cases, evident from the Ministry’s quarterly tribunal statistics, but over the last year or so attention has also been given to the seemingly related impact on claim outcomes. In short, it is now increasingly clear not only that the fees have deterred a very large number of potential claims/cases, but also that, on average, those claims ‘lost’ to fees were of greater merit than the claims that have not been deterred by the fees since July 2013. Yet ministers continue to assert, without evidence, that only ‘vexatious’ or “questionable” claims have been deterred by the fees.

In this post, I try to summarise – using some simple charts – what I see as the most important data for assessing the impact of fees on workers’ access to justice. And, in doing so, I will expand on my submission to the current inquiry into court and tribunal fees by the Justice select committee of MPs.

I strongly recommend that you read this post in conjunction with the excellent House of Commons library briefing paper, written by the excellent Doug Pyper and Feargal McGuinness, and published last month. And you might also want to read the submissions to the Justice committee’s inquiry from the Fawcett Society, the Law Society, Maternity Action, the President & Regional Employment Judges (England & Wales), the TUC, the Equality & Human Rights Commission (EHRC), and Working Families. The submission by Working Families includes this case study of what justice secretary Michael Gove would call ‘rough justice’:

Camilla, pregnant and until very recently working 30 hours per week as a hotel cleaner on a zero-hours contract, contacted the Working Families legal helpline in 2015 after being summarily dismissed for taking time off work due to a pregnancy-related illness. The helpline team considered Camilla to have a strong claim for unlawful pregnancy-related dismissal, but she was unwilling to risk up to £1,200 of her savings on issuing and pursuing a tribunal claim. Not without difficulty, Camilla had managed to save just over £3,000 to cover the extra expense she knew would come with having a baby – not least because she would receive only the statutory rate of maternity pay (just 60% of the National Minimum Wage) while on maternity leave. And those savings meant that Camilla would not be eligible for any remission of the tribunal fees.

The impact of fees on ET claim/case numbers

To fully understand the impact of fees on access to justice, it is important to understand that there are two different types of ET case: (a) single claims/cases brought by individual workers; and (b) multiple claimant cases involving tens, hundreds or even thousands of workers, each with an identical (or very similar) claim against the same employer. For example, in 2012-13 – the last full year before fees – there were 54,704 single claims/cases, and 6,104 multiple claimant cases involving a total 136,837 claimants, brought against an overall total of 60,808 employers (give or take some single claims brought against the same employer).

Most press and media reports about ET claim/case numbers misleadingly cite the grand total number of claimants (i.e. 54,704 + 136,837 = 191,541 in 2012-13), but that figure gives a grossly inflated impression of the ET system’s workload as, in most multiple claimant cases, the system will only need to determine one or a handful of lead claims. It is far better to focus on either the total number of cases (i.e. 60,808 in 2012-13) or, better still, the number of single claims/cases.

Not only is this the most meaningful measure of the ET system’s varying workload – and, indeed, the measure now favoured by the Ministry of Justice – but, as the vast majority of multiple claimant cases in recent years have been equal pay claims brought against local authorities and NHS trusts, it is also the most relevant measure when considering the impact of ET claim/case numbers on private sector employers. In that context, it is also worth bearing in mind that approximately one-third of all single claims/cases are also brought against public or voluntary sector employers.

In fact, and as the following chart shows, since July 2013 there has been a substantial and sustained fall both in the total number of new cases, and in the number of new single claims/cases. (The unusually high number of claims/cases in July 2013 was undoubtedly due to some claims being submitted earlier than they would otherwise have been, in order to beat the introduction of fees on 29 July).

Monthly

Much the same pattern – of claim/case numbers remaining steady or declining no more than marginally between January 2012 and June 2013, then plummeting from August 2013 onwards – can be seen if we look at some of the major jurisdictions.

UnfairDismissal

DisabilityDisc

RaceDisc

OrientationDisc

Equal pay and sex discrimination are two of the few jurisdictions in which there was an upwards trend in claim numbers, prior to the introduction of fees in July 2013.

EqualPay

SexDisc

While the officially stated objectives for the fees regime do not include ‘deterring potential claimants’, it is (and always was) abundantly clear that this was in fact the principal objective of ministers. For example, in November 2014, the then justice secretary, Chris Grayling, stated that, by introducing fees, the Coalition government was “trying to deal with a situation where it was too easy to go to a tribunal and where employers, often good employers, were easy prey for questionable claims”. And in June 2015, the current justice secretary’s legal counsel, David Barr QC, told the Court of Appeal that the ‘policy problem’ that fees were intended to address was that “there were increasing numbers of [ET] claims and the existing model was unsustainable.”

In fact, as the following chart shows, having flat-lined in the mid-2000s, and then risen to a peak in 2009-10, at the height of the wave of business failures and redundancies that followed the onset of economic recession in late 2008, the number of single claims/cases was already falling when ministers announced their intention to introduce ET fees in November 2011. And, by the time fees came into force in July 2013, the (modest) “historic downward trend” in single claim/case numbers now cited by ministers as an alternative to the introduction of fees as an explanation of the decline in claim/case numbers was already well established. Indeed, by that time, claim/case numbers had fallen back to the pre-recession, record low level of the mid-2000s.

Annual

The number of claims/cases ‘lost’ to fees

As is clear from the above charts, the introduction of fees in late July 2013 had an immediate, substantial and sustained impact on ET claim/case numbers: in August 2013, the number of new claims/cases fell off a cliff, and has not recovered since. In the six months up to 31 March 2014 – i.e. up to immediately prior to the introduction of Acas early conciliation in April 2014 (see below) – new ET cases (single claims/cases + multiple claimant cases) were down 62% on the same period in 2012-13, from 30,095 to 11,508. Unfair dismissal claims were down by 64%, sex discrimination claims by 80%, and equal pay claims by 84%. In the words of Lord Justice Underhill in the Court of Appeal in July 2015:

It is quite clear … that the introduction of [ET] fees has had the effect of deterring a very large number of potential claimants.

Indeed. And that “very large number” is easily quantified, by comparing the actual number of single claims/cases against the number we could have expected, had fees not been introduced in July 2013. To do so, we simply need to generate projections allowing for (a) the “historic downward trend” in case numbers that began in 2010/11, but which ministers either failed to spot or ignored in 2012, when deciding to introduce fees; and (b) the introduction of Acas early conciliation, which was intended to bring about a 17 per cent reduction in the number of claims, in April/May 2014.

Clearly, that “historic downward trend” may not have continued at the same rate (or even at all) in recent quarters, and the actual impact of Acas early conciliation appears to have been more modest than intended – the combined impact of any remaining downward trend and the introduction of early conciliation has been an annual rate of decline of just 15.4%. So the following chart sets out two alternative projections (one low, one high) of single claim/case numbers.

Screen Shot 2015-09-10 at 13.10.29

For the ‘low’ estimate (Projection A), I have assumed that claim/case numbers continued to decline at an annual rate of 6.3% over all eight post-fees quarters, and that the introduction of Acas early conciliation caused a further 17% reduction over the last four quarters. And, for the ‘high’ estimate (Projection B), I have assumed that claim/case numbers declined by 3% over the first four quarters, and then by 15.4% over the last four quarters (i.e. the same rate as the actual decline due to the combined impact of Acas early conciliation and any remaining ‘historic downward trend’).

According to these calculations, as of 30 June 2015, the “very large number” of potential single claimants deterred by and so ‘lost’ to fees was somewhere between 47,350 and 52,200, and continues to rise by some 5-6,000 every quarter. Furthermore, based on historic (i.e. pre-July 2013) case outcome trends, about 80% of those individuals – four out of every five – would have obtained a favourable judgment or settlement, had fees not been introduced. (Note that these figures do not include any claimants in multiple claimant cases ‘lost’ to fees. The number of such MCCs has also declined since mid-2013, but that decline may well be due to factors other than the fees).

How many of the claims/cases ‘lost’ to fees were meritorious

As it is pretty much indisputable that – after allowing for the “historic downward trend” in claim/case numbers and the introduction, almost a year after fees, of Acas early conciliation – some 47-52,000 single claims/cases have been ‘lost’ to fees (as of 30 June 2015), the key outstanding question is: how many of those ‘lost’ claims/cases are likely to have been meritorious?

There is of course no way of knowing for sure. Because – as noted recently by the Department for Business, Innovation & Skills – “only an employment tribunal can determine whether unlawful discrimination or unfair dismissal has occurred.” And, by definition, none of the 47-52,000 single claims/cases ‘lost’ to fees will ever go before a tribunal. (It is worth noting that this was a key factor in the failure of UNISON’s two applications for judicial review – the courts said they needed to see individual cases of ‘justice being denied by the fees’, but by definition cases in which the claimant has been deterred by fees yet a tribunal has found their claim to be meritorious simply don’t – and can’t – exist).

However, in July this year, when giving oral evidence to the Justice committee of MPs on the work of his Ministry, justice secretary Michael Gove appeared to suggest that none of these 47-52,000 single claims/cases ‘lost’ to fees were meritorious, stating:

“There is no evidence yet that the bar being set at a high level has meant that meritorious claims by people who feel they’ve been discriminated against aren’t being heard.”

Yet it simply defies logic to think that the impact of ET fees could have been so precisely calibrated by the Ministry in 2012 that some 47-52,000 unmeritorious claims/cases have been deterred by fees in just two years, without even one potential claimant with a meritorious case being so deterred. Moreover, the available evidence on claim/case outcomes flatly contradicts the justice secretary’s assertion that none of the 47-52,000 single claims/cases ‘lost’ to fees were meritorious.

Were it the case that all (or even just most) of the 47-52,000 single claims/cases ‘lost’ to fees were without merit, then we could expect the overall success rate of claims to have risen substantially. And, as the average ‘age’ of concluded cases is about nine months, this effect would have become clearly evident in the official outcome statistics from at least the first quarter of 2014/15 onwards, if not earlier.

Yet, as the following chart shows, far from rising, the overall success rate has fallen in each of the last five quarters, from 79% in 2013/14, to just 62% in the last quarter of 2014/15. In the first quarter of 2015/16 (April to June 2015), the figures for which were published last month, the overall success rate did leap to 75%. However, this figure is substantially inflated by unusually high proportions of (i) equal pay claims being conciliated by Acas or withdrawn (80%, compared to 40% in the same quarter in 2014/15); and (ii) unfair dismissal claims being conciliated by Acas (69%, compared to 32% in the same quarter in 2014/5). And, of course, outcome figures are given in terms of jurisdictional claims, not cases, so are easily skewed by one or two large multiple claimant cases. If we remove those two jurisdictions from the picture, then the overall success rate in the first quarter of 2015/16 falls to 62% – the same as in the previous quarter.

Outcomes 2010 on

Now, it can be argued that the ‘overall success rate’ shown above is too broad a measure of ‘success’. And it is true that, while the great majority of withdrawn claims are withdrawn as a result of a settlement of the claim, this is not true of all cases. So the following chart shows more narrow definitions of both ‘success’ and ‘failure’, excluding claims conciliated by Acas or withdrawn. And, again, we can see that, from the first quarter of 2014-15, both the ‘success’ rate and the ‘failure’ rate have moved in the opposite direction to what could be expected, were all or even just most of the claims ‘lost’ to fees of little or no merit.

NarrowOutcomes

As with the more broadly-defined ‘overall success rate’, the figure for ‘unsuccessful’ claims disposed of in quarter 1 of 2015-16 is distorted by the unusually high rate of equal pay and unfair dismissal claims conciliated by Acas or withdrawn, so the orange line excludes these two jurisdictions.

Such analysis tends to confirm the view of experienced employment law practitioners that, by and large, it is the ‘high merit but low value’ claims/cases by relatively low-income workers that have been deterred by fees. Yet, in the words of one (respondent) lawyer, “the fees regime really isn’t preventing [speculative] claims with little merit” by high earners, who can “easily afford” the issue fee of £250 “in the hope of making a return on this investment.”

Other considerations

In addition to citing the “historic downward trend” in case numbers and introduction of Acas early conciliation as factors that might explain at least some of the dramatic fall in ET case numbers since July 2013, ministers have repeatedly suggested that some potential ET claimants have simply decided to issue the claim in the County Court, where issue and hearing fees are lower, instead of in the ET.

It is certainly possible that some single claims/cases have been displaced to the County Court. However, all but a few types of claim can only be brought in the tribunal and – while there is some anecdotal evidence of large multiple claimant cases having been brought in the civil courts instead of the tribunal – I am not aware of any actual evidence of such displacement of single claims/cases. Accordingly, there is no good reason to think that such displacement accounts for more than a very small proportion of the 47-52,000 single claims/cases ‘lost’ to fees since July 2013.

Ministers have also stated – repeatedly – that access to justice has been preserved by the existence of the fee remission scheme. A great deal has been said and written about the adequacy or otherwise of that fee remission scheme, but here I simply note that the theoretical availability of full or partial fee remission to claimants on a very low income – and with less than £3,000 of household savings – has patently not protected access to justice for the 47-52,000 individual claimants ‘lost’ to fees since July 2013. More particularly, it has not protected access to justice for the 80% (i.e. 38-42,000) of those men and women who – based on historic case outcome trends – we can reasonably expect to have obtained a favourable judgment or settlement, had fees not been introduced.

Conclusion

Even after allowing for a pre-existing (but modest) downward trend in claim/case numbers, and for the (intended) impact of the introduction of Acas early conciliation in early 2014, the introduction of prohibitively high claimant fees in July 2013 has deterred some 47-52,000 single claims/cases in just two years. All the available evidence – including individual case examples, the experience-based views of a large number of employment law practitioners, and the official statistics on claim outcomes cited above – strongly counters the Government’s apparent position that none of those 47-52,000 single claims/cases were meritorious. And, prior to the introduction of fees, no credible commentator ever suggested that two-thirds of all such claims/cases were “vexatious”, “bogus” or otherwise without merit.

Apart from the obvious detriment to the 47-52,000 individuals in question, this amounts to a significant diminution of the ‘deterrence’ value of the ET system, with an associated risk of increased incidence of unlawful employment practice by rogue and dinosaur employers. That is not in the long-term interest of law-abiding employers, who quite rightly expect a level-playing field on which to compete with business rivals.

Yet this avoidable damage to access to justice and the ‘deterrence’ value of the ET system has brought negligible financial benefit to the government. In 2014-15, net income from ET fees (after both remission and annual administrative costs of some £1.3m) was just £4.3m – less than half the £10m that, in 2012, the Ministry said it expected fees to generate each year. (There have of course been more substantial operational cost savings due to the two-thirds fall in case numbers, but such savings were never an officially stated objective for the fees).

In short, only an idiot would deny that the fees regime needs to be reformed. What that reform should look like, I will explore in a future post.