The Supreme Court has today found in favour of the trade union UNISON in its judicial review of the UK Employment Tribunal fees regime, unanimously holding that the legislation implementing the current regime is unlawful both under domestic and EU law. The immediate consequence is that the Tribunal fees regime is quashed with effect from today’s date, meaning that Tribunal and EAT fees cease to be payable, and all fees paid since the regime was introduced will need to be reimbursed.

The Headline Points

  • The current fee regime was introduced by the government in 2013 with the stated intention of transferring the cost burden of the tribunals from taxpayers to users of their services, deterring claims with no merit and encouraging earlier settlement in cases. The introduction of the regime led to a dramatic and sustained decline in the number of Tribunal claims brought, prompting persistent calls for the government to overhaul the current system.
  • In UNISON’s judicial review application (which followed earlier unsuccessful applications to the High Court and Court of Appeal), UNISON argued that the legislation underpinning the fee regime was unlawful on the grounds that the prescribed fees interfered unjustifiably with the right of access to justice, frustrated the operation of employment rights granted by Parliamentary legislation and discriminated unlawfully against women (on the basis that claims attracting a higher fee are more likely to be brought by women).
  • The Supreme Court has unanimously upheld UNISON’s application on each of these grounds. Emphasising the fundamental importance of the right to access to justice, the Court found that the Tribunal fee regime’s intrusion into this right was greater than could be justified by its legitimate purposes. In assessing the extent of the intrusion, the Court closely examined empirical evidence relating to the impact of fees on behaviour in the real world. It was particularly concerned by evidence showing that there had been a greater fall in the number of lower value claims, suggesting that fees (which range from £390 to £1,200 but are not directly linked to the value of a claim) were disproportionately impacting individuals on lower incomes.
  • In reaching its decision, the Court provided a detailed commentary on the principles underpinning the constitutional right of access to justice, warning that without proper access to the courts, laws are liable to become a dead letter and the democratic election of members of Parliament a meaningless charade. It is likely that any future restrictions on access to the legal system will be subjected to close scrutiny in light of the principles set out in the Supreme Court’s judgment.
  • Although it was not necessary to decide the issue of indirect discrimination, the Court found that the fee regime did put women at a particular disadvantage because a higher proportion of women bring “type B” claims (which incur a higher fee) and that the fee structure could not be objectively justified on the basis of the government’s legitimate aims.

What does this mean?

Whether the Supreme Court’s judgment spells the end for Tribunal fees in the UK remains to be seen. Whilst the Court has strongly endorsed the public importance of access to justice, given the existing funding pressures on the judicial system, it is possible that the government will seek to introduce a different fee regime at a lower level at some point in the future. In the immediate term, the Lord Chancellor will be under pressure to act promptly on his commitment to reimburse all fees paid under the fee system over the past four years, and UK employers will be keeping a watchful eye on any emerging trends in tribunal claim numbers in the coming months.