ET fees: To deter, or not to deter, that is the question

Court 72 in the Royal Courts of Justice – where earlier this week three Court of Appeal judges spent two days hearing Unison’s appeal against the High Court’s dismissal of its two applications for judicial review of ET fees – is one of the more modern courtrooms to be found in the laughably camp, Gothic Revival edifice that sits on the Strand. Not quite a 21st century courtroom, perhaps, but certainly more 1960s than 1860s. And, to this lay observer, the appeal judges’ scrutiny of the appellant and respondent’s by now well-rehearsed arguments was a tad more modern than that offered by the reputedly clever but oh-so-out-of-touch-with-2015-reality Elias LJ in the High Court last October.

On Tuesday, when Karon Monaghan QC of Matrix Chambers presented Unison’s five grounds of appeal, all three judges had asked challenging questions that, to my mind, indicated a genuine desire to understand the real nature and impact of the fees regime. But things got a little more interesting on Wednesday, when David Barr QC of Temple Garden Chambers rose to present his defence of The Devil [Shurely ‘the Lord Chancellor’? Ed].

I think it’s fair to say that Mr Barr is not one of the Bar’s most flamboyant QCs, but it often sounded to me as if even he wasn’t convinced by the arguments that he frequently struggled to locate in the voluminous bundle. In the High Court, Susan Chan had at least sounded as if she believed the garbage spewing from her mouth. The three judges – Moore-Bick LJ, Davis LJ and Underhill LJ – certainly didn’t look terribly impressed, and the tone of their questioning became ever more mocking and disbelieving. Indeed, if these things were decided on the body language and facial expressions of the judges, then I’d say Unison have their appeal in the bag.

During a lengthy and turgid section on the Public Sector Equality Duty, Mr Barr seemed to be trying to bore the judges into submission, prompting Underhill LJ to swivel maniacally in his chair with the look of someone who’s just got a whiff of the dog poo on their shoe. But it was Mr Barr’s attempted defence of the appeal ground of ‘effectiveness’ that elicited the most mocking responses from the bench.

At one point, a clearly bemused Moore-Bick LJ asked Mr Barr what the ‘problem’ was that the fees were “trying to address”. And – seemingly forgetting the official Ministry line and, indeed, his own assertion that the aim of the fees was “not to deter claimants” – Mr Barr blurted out:

The problem was that there were increasing numbers of [ET] claims and the existing model was unsustainable.

As previously explained on this blog, this is claptrap and bunkum. Leaving aside the (admittedly many) claimants in a relatively small number of multiple claimant cases – as both Ms Chan and Mr Barr asserted we (and the judges) should do when analysing the massive drop in claims since July 2013 – the number of claims/cases was in fact falling towards a record low by 2011, long before the fees came into force. But it’s also at variance with the publicly stated objectives for the fees regime of ministers, as confirmed by the recent announcement of the long-promised review.

According to that announcement, the original objectives were:

  • to transfer some of the cost from the taxpayer to those who use the service, where they can afford to do so;
  • to encourage the use of alternative dispute resolution services, for example, Acas conciliation; and
  • to improve the efficiency and effectiveness of the tribunal.

Nothing about dealing with an “unsustainable” increase in claim numbers there. Indeed, the second and third objectives are just flannel, as would-be ET claimants need no encouragement from fees to use the mandatory early conciliation services of Acas, and there is simply no way fees could by themselves “improve the efficiency and effectiveness” of the tribunal system – other than by deterring two-thirds of the annual caseload (which, as already noted above, Mr Barr assured the judges was not the aim of the fees). As for transferring some of the cost to the taxpayer, in 2014-15 the Ministry’s net income from fees (after allowing for remission and administration costs) was a mere £4.3 million.

However, the evidently confused Mr Barr isn’t the first to let the cat out of the bag. For it was none less than the then Lord Chancellor, Chris Grayling – reputedly not the sharpest pencil in the box either – who revealed to the Yorkshire Post in November last year 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”.

In short, despite Mr Barr’s polished assurance to the contrary, the aim was to deter claimants. In the High Court, Moses LJ, Elias LJ, Irwin J and Foskett J all failed to see this, even as unrepentant Tory ministers such as Matt Hancock were claiming ‘success’ for the fees on this very basis. And, indisputably, the officially unstated aim has been achieved, with knobs on. But as to whether any of this means the fantabulous Unison legal team will be downing celebratory drinks a month or two from now, I have learnt to my cost to reserve judgment.

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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.

 

ET fees: ball back in Lord Chancellor’s court

In February, when rejecting UNISON’s judicial review of the employment tribunal fees regime introduced last July – on the grounds that it was simply too early to reach a firm conclusion on the impact of the fees, the only available statistics being provisional figures for the month of September – the High Court noted that “if [these provisional figures] are anything like accurate, then the impact of the fees has been dramatic”. And the judges suggested that, should the Lord Chancellor’s optimism that the number of ET claims would soon bounce back to more ‘normal’ levels prove unfounded, then they would “expect the Lord Chancellor to change the [fees regime] without any need for further litigation”.

Within weeks, the accuracy of those provisional figures was confirmed, with tribunal statistics for the three-month period October to December (Quarter 3 of 2013/14) showing a dramatic fall in the number of ET claims by individual claimants, from an average of 4,460 per month in the nine months before the introduction of fees in July 2013, to just 1,000 in September, 1,620 in October, 1,840 in November, and 1,500 in December.

UNISON has since been granted permission to appeal to the Court of Appeal, but as of today the ball is back in the Lord Chancellor’s court, with the latest set of quarterly tribunal statistics – for the period January to March 2014 (Quarter 4 of 2013/14) – showing no significant rebound in the level of ET claims since December.

The headline number of ET claims, which includes both single and multiple claims and which was down 78 per cent in Quarter 3, was down again in Quarter 4, by 83 per cent compared to the same quarter a year ago. Based on past experience, this is the figure that will dominate reporting of the new set of statistics. However, as is clear from the following chart, this figure is arguably not the most reliable indicator of the impact of fees, given its evident volatility over time due to large variations in the monthly number of multiple claims (that is, the total number of claimants in multiple claimant cases). That said, the impact of fees seems reasonably clear.

Chart 1: ET claims (singles & multiples), July 2012 to March 2014.

Chart 1

The impact of fees since July 2013 is much clearer when we look at the number of single claims by individual workers, which was down 64 per cent in Quarter 3, and was down again in Quarter 4, by 58 per cent compared to the same quarter a year ago. While the Ministry of Justice will no doubt be highlighting the 13 per cent increase from Quarter 3 to Quarter 4, at 1,763 the average monthly number of claims in Quarter 4 is still just 39 per cent of the average over the nine months prior to July 2013 (4,460).

Chart 2: ET claims (singles), October 2012 to March 2014

Chart 2

Somewhat surprisingly – to me at least – the number of multiple claimant cases, which in theory should be less affected by fees, has also fallen dramatically since July 2013. Down by 65 per cent in Quarter 3, from 1,390 to 485, the number of such cases was down again in Quarter 4, by 68 per cent compared to the same quarter a year ago.

Chart 3: ET multiple claimant cases, October 2012 to March 2014

Chart 3

Given that claimants in the very largest multiple claim cases each pay only a tiny fraction of the fees, the most obvious explanation for this fall in the number of multiple claimant cases would be that fees have cut out those cases with relatively small numbers of multiple claimants. However, this would imply a significant increase in the average number of claimants in multiple claimant cases. And, as the following chart shows, with the exception of September (when, presumably, there were one or two very large cases), the average number of claimants in multiple claim cases has not only not risen, but has actually fallen since July 2013.

Chart 4: Average number of claimants in multiple claimant cases, July 2012 to March 2014

Chart 4

So, something else would appear to be going on here. Have the unions run out of equal pay cases?

Indeed, for me the main story from this latest set of statistics is that fees have had a dramatic impact not just on the number of single claims by individual workers, but also on the number of multiple claims and multiple claimant cases – which, in theory, should have been much less affected by fees.

Chart 5: ET claims (multiples), October 2012 to March 2014

Chart 5

All in all, it’s hard to see how the Lord Chancellor can credibly deny that the introduction of hefty, upfront fees in July 2013 has had a dramatic impact on the number of claims – both singles and multiples. Which means, if he does not now reform the fees regime (and substantially reduce the level of fees), he is likely to have to do so following an embarrassing defeat in the Court of Appeal at the hands of UNISON later this year (the appeal is currently scheduled for hearing sometime between 10 September and 10 December 2014).

The incredible shrinking fee remission fig leaf

In response to extensive criticism of the fees regime since July 2013, ministers have argued that access to justice is protected for low-income claimants by the associated fee remission scheme. However, the only figures on fee remission applications that the Ministry of Justice has been willing to release to date – covering the period up to 31 December – suggest that only about six per cent of all ET claimants obtain any fee remission.

According to these figures, provided by the Ministry in response to a series of parliamentary questions by shadow justice minister Andy Slaughter MP, just 600 “individuals or groups of individuals” were granted fee remission between 29 July and 31 December, while 1,800 fee remission applications were rejected. And in that period there was a total of 10,208 single claims (9,305) and multiple claim cases (903). So remission was applied for in just 23 per cent of all cases, and three out of four of those applications were rejected.

Yet as recently as September 2013, in its final Impact Assessment on the revised fee remission scheme, the Ministry of Justice suggested that 31 per cent of all ET claimants would be eligible for full (25 per cent) or partial (six per cent) fee remission.

In short, the fee remission scheme has so far proven to be a very small fig leaf indeed, and seems unlikely to provide the Lord Chancellor with much cover in the Court of Appeal.