ET fees: High farce in the High Court

In the days immediately following the High Court’s dismissal, on 17 December, of UNISON’s second application for judicial review of the ET fees regime, I was too busy eating humble pie and shouting “The law is an ass!” at anyone looking vaguely lawyer-like to sit down and bash out a blog. And, in any case, folk such as Kerry Underwood and James Medhurst were doing a fine job of pointing out the High Court Emperor’s lack of legal clothing. So I thought I’d keep schtum and let my irritation subside over the Yuletide break.

But, far from subsiding, over the past ten days my frustration and disappointment has solidified into a certainty that the UNISON legal team did not fail to convince Elias LJ and Foskett J of the detrimental impact of ET fees on workers’ access to justice. The learned judges simply bottled it.

The giveaway lines are by Elias LJ in paragraph 60 of the judgment, and Foskett J in paragraph 96. Elias LJ says:

“The [MoJ statistics on tribunal claims] demonstrate incontrovertibly that the fees have had a marked effect on the willingness of workers to bring a claim” and “I suspect that there may well be cases where genuinely pressing claims on a worker’s income will leave too little available to fund litigation.”

And Foskett J says:

“The effect of the new regime has been dramatic … so dramatic that the intuitive response is that many workers with legitimate matters to raise before an ET must now be deterred from doing so because of the fees that will be demanded of them before any such claim can be advanced. For my part, I would anticipate that if the [MoJ] statistics … were drilled down to some individual cases, situations would be revealed that showed an inability on the part of some people to proceed before an ET through lack of funds which would not have been the case before the new regime was set in place.”

In short, the learned judges fully accept the contention at the heart of UNISON’s application for judicial review: that the hefty fees make it exceptionally difficult for a significant number of potential applicants to bring a claim (by consensus the legal test on effectiveness). But they then swerve away from the obvious next step – allowing the application – by pointing out that, as UNISON’s application was not brought on behalf of any individual workers, the Court had not seen any actual evidence of this.

Well, yes. But a jury can justly convict a defendant of murder without having witnessed the fatal stabbing. And a parent dashing from the kitchen to the sitting room, in which his children have been noisily pillow-fighting, can justly conclude that it was his offsprings’ careless exuberance that produced both the sound of shattering glass that induced his frantic dash, and the shattered fragments of glass now littering the sitting room carpet – even if his offspring contend that it was not their fault.

High Court judges are not stupid (or so I am assured by people who are definitely not stupid). So Elias LJ and Foskett J must have known, when drafting their judgment, that what they were implicitly asking of UNISON is nigh on impossible. The jury in a murder trial cannot be transported back in time to the scene and moment of the crime, and a parent cannot be everywhere at once. Equally, even if the hard-working UNISON legal team had been able to find ten, 20 or even 100 potential ET claimants who were deterred by the fees – a difficult enough task in itself – how could it be proven that this was the reason the workers had not pursued a claim?

In court, the judges would not want simply to take each such assertion at face value. And the Lord Chancellor’s counsel would no doubt seek to challenge the merit of each potential claimant’s claim, and to ask why, for example, the potential claimant and her husband had not downsized from their three-bedroomed house in order to fund a claim for unlawful, pregnancy-related dismissal. After all, they would surely only need two bedrooms, even after the birth of their child.

So, let’s assume that the trojans in the UNISON legal team had somehow unearthed the cases of 20 potential but deterred claimants to highlight before the High Court, and that the Lord Chancellor’s counsel had managed to knock out ten of them. By any standards, that would still have been some achievement on the part of the UNISON team. But what would those ten remaining cases have added to the evidence before the learned judges?

The answer is: nothing. It could still have been argued that the ten cases do not amount to a significant number, when set against the overall number of tribunal claims – all ten could just be cherry-picked outriders. And Elias LJ and Foskett J would not have been present when the workers made the decision not to proceed.  So they could just as easily have dismissed the application with the throw-away line that, should UNISON be able to come up with evidence of a more significant number of potential but deterred claimants, “the Lord Chancellor would doubtless feel obliged to address it.” To which one can only say: and pigs might fly. After all, that’s just what the High Court said when dismissing UNISON’s first application for judicial review, in February.

All of which leaves me thinking that, in this case at least, the law really has been an ass. Elias LJ and Foskett J know as well as anyone – including the hitherto emu-like BIS employment relations minister, Jo Swinson – that the fees regime introduced in July 2013 has drastically narrowed workers’ access to justice, to the benefit of dinosaur and rogue employers. But – for whatever reason – the learned judges were not prepared to say so by allowing UNISON’s application, and so embarrass the Lord Chancellor.

The three of us (apart from a handful of court correspondents) who were in Court 2 of the Royal Courts of Justice on 17 December know this to be true. Maybe Elias LJ delivers all of his judgments near inaudibly in less than five seconds before scuttling out of the courtroom (after his abrupt departure, we had to ask clearly bemused court officials what he had said). For my part, I am convinced that what I witnessed that day is a very clever man deeply ashamed of his unprincipled and rather silly handiwork.

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ET fees: BIS gives ad hoc succour to Ministry of Injustice

Sitting in Court 3 of the Royal Courts of Justice last week, I was surprised to hear Susan Chan, counsel for the Lord Chancellor in his defence of UNISON’s judicial review of the ET fees regime introduced in July 2013, calling in aid a new, specially-produced statistical analysis of ET claims by the Department for Business, Innovation & Skills (BIS). For I’d always got the impression – not least from a series of tweets by the BIS employment relations minister, Jo Swinson – that BIS ministers regard ET fees and their impact on access to justice as a matter not for them, that their own hands are squeaky clean. But here was BIS, proactively aiding and abetting the Ministry of Injustice in the High Court.

This BIS statistical analysis was so new that it hadn’t been included in Ms Chan’s detailed grounds of defence, let alone published. Indeed, Ms Chan wasn’t even able to produce a copy of it in court for the judges and UNISON’s counsel, Karon Monaghan, to examine. However, Ms Chan gave a solemn undertaking that BIS would publish the analysis at the same time she submitted a copy to the Court.

And so it was that, just before 6pm on Friday evening, BIS published its ad hoc statistical analysis.  Based on findings from the Survey of Employment Tribunal Applications (SETA) 2013, published in June, the eight-page document sets out “further analysis based on the [SETA] survey dataset on the characteristics of claimants who would have been required to pay a fee at the time of their claim, if the current fee regime had been in force.”

Most of the document’s eight-pages are taken up with guff demonstrating the reliability of its few findings. If you think it’s about time you learnt about 95% confidence interval lower and upper bounds, then the BIS document is as good a place to start as any other. The first of these findings is that 75 per cent of the single claims in the SETA sample group would have attracted the higher Type B fees (a £250 issue fee, and a £950 hearing fee), and only 25 per cent the lower Type A fees (a £160 issue fee and a£230 hearing fee).  And the document goes on to give the following breakdown of cases in the sample group, by fee-type and gender.

Women Men
All cases 43% 57%
Type A fees 36% 64%
Type B fees 45% 55%

It’s not entirely clear to me how or why Ms Chan thinks these figures support her defence against UNISON’s case that the fees regime is indirectly discriminatory to a protected characteristic group such as women (one of the two grounds of UNISON’s claim for judicial review, the other being that the fees regime breaches the principle of ‘effectiveness’), but the overall 25/75 breakdown by fee-type is certainly a very interesting finding. Because it’s pretty much the exact opposite of the breakdown of cases by fee-type that the Ministry of Injustice projected in May 2012, in its final regulatory impact assessment of the fees regime. (Please note that my term ‘pretty much’ is not the same as ‘within a 95 per cent confidence interval’).

That Ministry of Injustice projection – set out in paragraph 4.10 of the RIA, and based on the allocation of cases by HMCTS into short, standard and open tracks – was that 64 per cent of cases (i.e. single claims + the relatively small number of multiple claimant cases) would attract the lower Type A fees, and 36 per cent the higher Type B fees.

So who is right? If the Ministry was right with its 64/36 projection, then the BIS ad hoc statistical analysis, and its breakdown of claims by fee-type and gender, is quite possibly nowhere near as reliable as BIS claims. Indeed, it could well be a pile of pants. But if BIS is right with its 25/75 breakdown, then the Ministry misled Parliament (and everyone else) with its projection. Ms Chan’s job is now done, at least until the judicial review progresses to the Court of Appeal, but maybe now that BIS has made ET fees its issue too the previously elusive Ms Swinson can give us a few answers. At the very least, BIS should now offer an explanation of why it chose to overlook this glaring discrepancy when handing its findings over to the Ministry, and when publishing them in such unseemly haste on Friday evening.

And when she’s about it, perhaps Ms Swinson can also tell us when Autumn ends. In her detailed grounds of defence, Ms Chan informed Lord Justice Elias and Justice Foskett that the greatly anticipated review of the ET fees regime by the Ministry of Injustice (perhaps now with the help of BIS) will “take place this Autumn”. Maybe they operate to a different seasonal structure in government, but there are only 58 shopping days left until Christmas. Which in my house is not an autumnal event. And they haven’t even started the review yet.

Perhaps they are secretly hoping that Lord Justice Elias and Justice Foskett will save them the trouble.

 

Cliffs and claims: Employment Tribunal cases post-fees

EMPLOYMENT TRIBUNAL CLAIMS

POST-FEES

PART 1 

 

On 29 July 2013 the Government introduced fees for those wishing to bring claims in the employment tribunals seeking to enforce their rights. For a system set up to be quick, simple, informal and free, this was the single biggest – and arguably most controversial – change since the tribunals were created in 1964. The Government stated the reason for doing so was to make sure that the users of the system paid their fair share of the cost of it, rather than it all falling to the taxpayer. No mention was made of the fact that the users of the system were, almost without exception, taxpayers.

The suspicion was that a government which had, in some quarters, expressed hostility to employees having and exercising rights, was introducing fees in order to cut the number of claims. Those suspicions were not allayed when the size of the fees were confirmed. For simple ‘money’ claims there was to be a fee of £160 to issue and a further £230 should it proceed to a hearing. For more complex claims the issue fee would be £250 with a further £950 for the hearing.

Unsurprisingly the introduction of fees was challenged via a judicial review application brought by UNISON (current fee £60 plus £215 for a hearing. The Government has now proposed increasing this to £135 plus £680 for a hearing). The hearing for this challenge began on 22 October. Just days before, on 18 October, the Ministry of Justice published an “ad-hoc statistical notice” showing the number of claims received into the employment tribunal system in the period July to September 2013. The key messages in the executive summary were:

  • They normally have an average of 17,000 “receipts” per month
  • In June there were 25,000 “receipts” and in July 17,000
  • In August there were 7,000 “receipts” and in September 14,000
  • The top “key finding” was that, “Employment Tribunal receipts were around 40,000 for July – September in line with historical quarterly trends”

A cynic may suggest that what the Government was saying, in advance of the judicial review hearing, was that:

  • the introduction of fees hadn’t really had an effect on the number of claims being brought – “in line with historical quarterly trends” – showing a decrease of only 2,000 “receipts” over what they would normally expect.
  • That is only a 5% drop (which probably represented the unmeritorious claims usually put in by the idle, making use of a free-system funded by the taxpayer, just to annoy their employers (and probably hard-working families)).
  • Quite properly the Government was re-balancing the system so that users made a proper contribution.

How could anyone criticise this? Surely the facts speak for themselves, particularly in the statistics the Government had so helpfully released prior to the judicial review hearing. As is so often the case, the executive summary was not really a summary at all. It is the place where you put the messages you want to get across, safe in the knowledge that few people will venture beyond it. Particularly where there are graphs, tables and figures.

First off, it is important to be clear about our language. In the executive summary the MoJ spoke of “receipts”, rather than cases or claims. There are two types of figures that are recorded:

  • Single claims – where an individual brings a claim against the employer. This may be Fred bringing an unfair dismissal claim; Susan bringing an unfair dismissal and unpaid accrued holiday claim; or Jay bringing a discrimination and whistle-blowing claim
  • Multiple claim – where two or more individuals bring claims against a common employer. This may be a group of transferring employees alleging a failure to inform and consult following  a TUPE; or it may be a huge number of cabin crew bringing a claim against an airline alleging their holiday pay has not been calculated correctly (of which more later).

“Receipts” is an amalgamation of the two types of claims, i.e. adding up the number of single and multiple claims received, but counting each of the claims within the multiple claims individually. Therefore, if 1,000 single claims were received and 1,000 multiple claims each comprising 10 individuals were also received, “receipts” would total 1,000 + (1,000 x 10) = 11,000, rather than 1,000 = 1,000 = 2,000 receipts.

Does it make any difference if we look at single and multiple claims separately rather than together as receipts? The short answer is yes and arguably a more accurate picture is painted as to what is happening to claims following the introduction of fees. If we start off with single claims – where a worker or employee submits a claim against his or her employer – what would we normally see? If we go back to 2012 there is a fairly consistent pattern of 4,000+ cases bring received nationally each month (the average is 4,602, with a range from 4,021 to 4,981).

If we look at the period from January to June 2013, much the same pattern is evident: an average of 4,380 per month, with a range from 4,029 to 4,635.

Moving on to July 2013 – with fees looming on 29th – there is a spike in claims to 6,691, a rise of over 2,300 on the average, representing a more than 50% increase. This is to be expected, as the MoJ acknowledges, with claimants bringing forward submission of claims to avoid the fee.

This was bound to result in a decrease for August, which it did: down to 3,341, as some of the claims submitted in July would have been submitted in August but for the introduction of fees.

Turning to September, just 1,003 single claims were submitted, being only 23% of the average for 2013 (and under 22% of the average for 2012). In September 2012 4,021 were submitted,  more than four times as many.

Surely, however, September suffered from the same fate as August, with claims being submitted early to beat the fee? Probably not and certainly not to the same extent. The reason for that is that the tribunals have a short limitation period. For most claims the period of time in which the claim must be submitted is 3 months. Therefore people cannot hang around and experience suggests that claims submitted in September related to events from late-July onwards, so those claimants would not have had the ability to bring forward submission of their claims in the same way those submitting in July could have done. The events they were complaining about had probably not happened early enough to do so.

One caveat ought to be attached to this analysis. The MoJ only counts a claim as “received” once it has been accepted. For those claimants who applied for remission of the fees, which would delay acceptance of the claim, their cases may not be included in these figures. One smaller caveat – made by the MoJ – is that the figures it released were provisional and subject to change. Final figures will be released on 12 December. Even with those caveats, it is highly unlikely that anything like 3,000+ claims will be restored for September.

So how about multiple cases? For these the “ad-hoc statistical notice” tells us (on page 7) that, “When looking at the number of multiple claims cases, regardless of the number of individuals involved, there is a broadly flat trend from April 2012 to June 2013. There is an increase in multiple claims for July 2013, again possibly due to people wishing to submit cases before the introduction of fees. There is then a decline in cases in August and September 2013.” The question is, how much of a decline?

If we look at the figures for the from April 2012 to June 2013 (none, curiously, are published from January to March 2012) we see a range from 682 to 404 submitted each month, giving an average of 520. In July we see our familiar spike of 616, being about 18% up, with a dip in August to 304. In September we plumb the depths to just 114. That is – again – 22% of the what one would expect to see. If we look at September 2012, 437 multiple cases were received: nearly four times as many, as with the single cases.

We do need to be cautious with multiple cases, however, as they contain a number of individual claimants. This is significant for three reasons. Firstly, there is one fee payable for submitting a multiple case. This means that the impact on each individual is far less than in a single case.

Secondly, in multiple cases the individuals are more likely to be supported by a trade union. Think of cases where multiple individuals bring a claim: failure to collectively consult on redundancies; failure to inform and consult under TUPE; large equal pay claims and so on. In those cases it is the union that will pick up the tab, rather than the individual.

Thirdly, since 2007, there have been over 10,000 claims brought by cabin crew in the airline industry in relation to the calculation of their holiday pay. Those claims are re-submitted every three months. Looking at the figures for ‘multiple receipts’ (the numbers of individuals within multiple cases) in March 2013, for example, there were 20,588. In July – our ‘spike’ month – there were 10,462, in August 4,107 and in September 13,359.

These numbers can really distort the figures, if that is what one wanted to do. When the MoJ, on behalf of the Government, publishes figures immediately prior to a judicial review on the introduction of fee and states that, “Employment Tribunal receipts were around 40,000 for July – September in line with historical quarterly trends(my emphasis), one might conclude that is what was being done. Yes, if you add up all the single claims in July to September and all the individuals within all the multiple cases, you do get to a figure of 38,963. That is a poor measure, however, and does not disclose what is really going on with employment tribunal claims.

Employment Tribunals up and down the country report that the number of claims has dropped significantly. Analysis of the statistics show that, far from being in line with historical quarterly trends, the number of claims has dropped by over 75% once you are past the distortion of the 29 July deadline.

It is true that claims may recover as people get to grips with a new system. When the statutory dispute resolution procedures were introduced in 2004, the number of tribunal claims dropped by about 25%, as people grappled with “what is a grievance?”, or “is this a Step 1 letter?”. Claims recovered.

What is not a surprise, however, is that if you introduce a hefty fee for something that was previously free, people consume less of it. One can argue about whether making it harder to bring a claim was the intention of a Government that commissioned the Beecroft Report, or that stated employers were “too scared” to employ people for fear of being taken to a tribunal. One cannot argue that it was wasn’t foreseeable that fewer people would seek redress through the tribunal system to protect their rights.

@alexlock