First-tier Tribunal and Upper Tribunal (Composition of Tribunal) (Amendment) Order 2018

Tuesday 27th March 2018 Grand Committee

Considered in Grand Committee

19:05

Moved by

[Baroness Vere of Norbiton]

That the Grand Committee do consider the First-tier Tribunal and Upper Tribunal (Composition of Tribunal) (Amendment) Order 2018.

[Baroness Vere of Norbiton (Con)]

My Lords, the principal purpose of the draft order before us is to provide the Senior President of Tribunals, to whom I shall refer as the SPT, with greater flexibility in setting panel composition within the First-tier Tribunal. These changes are being made with the support of the senior judiciary in order to address restrictions in the existing law. The order will also introduce a level of ministerial involvement with panel composition in the First-tier Tribunal and Upper Tribunal, bringing their processes in line with other parts of the justice system. The current SPT, Sir Ernest Ryder, has been consulted on the draft provisions and has confirmed his support.

Tribunals were designed to be user-friendly, allowing citizens to seek impartial redress. The tribunal system should be proportionate, accessible and simple to use, though it has become increasingly complex and burdened with bureaucracy. The Government have therefore committed to reforming the tribunals as part of our wider reform of the justice system, delivering a tribunal system that is more efficient and delivers better value for money. This will involve a greater use of technology. New online processes will enable tribunals to be more accessible and easier for users to navigate. As these reforms progress, the use of tribunal panel members should be more tailored and flexible. This will ensure that the tribunal can benefit from panel members’ specialist expertise and knowledge when it adds specific value to the decision-making process.

The terms of the existing composition order specify that in setting panel composition in the First-tier Tribunal, the SPT must have regard to the arrangements that existed before its creation. That requirement means that many tribunal panels are based on historical precedents, dating back over 10 years to 2008 and earlier. In a system that will be reliant on digital processes, the provision of specialist expertise should be looked at afresh to ensure that it remains appropriate. The current legislation restricts the SPT’s ability to do so.

I shall explain further. Tribunal reform will see the introduction of continuous online resolution. Parties will be able to submit a claim and evidence online, and judges will be able to review and request additional information, meaning that where appropriate a decision can be reached without the need for a physical hearing. This will be possible because, unlike the current system where the first interaction between the judge and tribunal user is usually the hearing, there will be an opportunity to offer information and resolve disputes earlier in the process. It will essentially be a triage system, where the most straightforward cases are resolved online and more complex cases continue through to a full hearing.

In this digital context, it would not be reasonable to require the SPT to have regard to panel arrangements that were in place before these alternative means of resolving disputes existed. Rather, the SPT may wish to consider whether specialist expertise could be provided in alternative ways that were more compatible with new online processes. The draft order therefore intends to remove the existing requirement on the SPT to have regard to previous panel arrangements. Instead, it will provide for a requirement to consider the nature of the matter and the means by which it is being decided, as well as the need for members of tribunals to have particular expertise, skills or knowledge.

I turn to ministerial involvement in panel composition. The existing provisions delegate the Lord Chancellor’s responsibility for setting panel composition to the SPT. The current arrangements have been made in practice statements, which do not include any form of ministerial involvement. It is intended to introduce a requirement for the SPT to set panel composition by practice direction. The process for doing this, as set out in legislation, is subject to consultation with the Lord Chancellor. There is nothing unusual about the use of practice directions, and they are used in other parts of the justice system. In the civil courts, decisions on judicial allocation and assignment are similarly matters for the judiciary, and are set by practice direction after consultation with the Lord Chancellor. The existing determinations made by practice statement, however, would continue to apply until such time as they are superseded. Although the SPT will be required to consult the Lord Chancellor, panel composition decisions will remain a judicial matter and the SPT will continue to make the final determination.

As to the number of panel members, two years ago the MoJ consulted on proposals to amend the panel composition provisions. At that time, it was proposed to introduce single-member panels as a default and to provide the SPT with the power to specify where additional members should be used. The intention was to ensure tribunal panel composition was proportionate to the case being determined.

However, we listened to our stakeholders and the Government subsequently announced that they would not proceed in this way. Instead, this statutory instrument provides that the SPT will determine whether a panel should consist of one, two or three members. While this still allows for some cases to be heard by a single-member panel—indeed, many tribunals are already ordinarily heard by a single member—the SPT will have regard to the nature of the matter and the means by which it is to be decided, and the need for particular expertise. We can therefore be confident that single-member panels will be used only in appropriate circumstances. Previous changes to panel composition have not proved to be controversial. In 2014, a former SPT conducted a pilot in the tribunal’s special educational needs and disability jurisdiction, reducing the number of panel members from three to two. This did not affect user experience. Importantly, the tribunal was flexible enough to ensure panel composition could be adapted according to the complexity of the case.

The Government of course recognise the valuable contribution that panel members make to the tribunal system. While there will continue to be a need for specific experts, the greater use of technology and new ways of resolving disputes will be an important new factor to consider. This instrument will not itself change panel composition. It will be for the SPT to review and consider whether new panel arrangements are needed.

There are sufficient safeguards to ensure that users are not adversely affected by any panel changes implemented under this order. The SPT has an existing statutory duty: to have regard to the need for tribunals to be accessible; for proceedings to be fair and handled efficiently; and for members of tribunals to be experts in law or the subject matter applied in cases. Additionally, as I have already stated, the revised order will specify that the SPT must have regard to the nature of the matter to be decided and the means by which it will be decided, as well as the need for members of tribunals to have particular expertise, skills or knowledge. Previously, wherever the SPT has sought to amend panel arrangements, he has done so in collaboration with senior members of the judiciary, who in turn have undertaken consultation appropriate to, and proportionate with, the nature of the proposed changes. The SPT has confirmed that he would remain committed to that practice.

In conclusion, the proposed measures will provide the judiciary with greater flexibility to ensure that tribunal panel composition is proportionate and suitable to the case being heard. I commend the order to the Committee.

[Lord Marks of Henley-on-Thames (LD)]

My Lords, I have two main concerns as to this order. The first is the risk of damage to the quality of tribunal decision-making because of the reduced recourse to specialist expertise. We welcome the fact that in response to the consultation, as the Minister said, the Government have abandoned their proposal for a default position that tribunals should be single member. Nevertheless, we are concerned that tribunals may not benefit from specialist membership when they would otherwise do so.

My noble friend Lady Thomas of Winchester, who was planning to stay and speak but has had to leave because of the hour, is concerned about the composition of tribunals hearing personal independent payment cases. Her views apply equally, of course, to employment support allowance and disability allowance cases. Presently such appeals are heard by a tribunal judge together with a doctor and a disability specialist. It is important that experts have full membership of the tribunals in important cases because, in my noble friend’s experience, assessors advising tribunals are not always, as she puts it, up to the job. Her views are fully supported by Disability Rights UK, which has done a great deal of work in this area.

19:15

My second concern is the risk of a rising number of appeals as a result of first-instance hearings going wrong, increasing costs on both sides and the strain on applicants, for whom the effects of delay can be devastating, particularly vulnerable applicants seeking enhanced payments. This is a particular problem in social security tribunals, which have a history of a high proportion of appeals and of appeals having a high proportion of success.

It was a concern raised by the Bar Council in its response to the original Ministry of Justice consultation that errors of fact, and therefore appeals, would increase if specialist expertise were reduced. Furthermore, errors of fact do not always give rise to appeals, so applicants may often be stuck with unjust decisions. There is huge benefit to getting it right first time.

I appreciate that there is a duty on the senior president under paragraph (3), as the Minister said, to have regard to the need for members of tribunals to have particular expertise, skills or knowledge, and that the senior president must issue a practice direction. I have no objection to the practice direction procedure as such, but I ask the Minister to make it clear that any practice direction must provide for sifting out cases that raise questions of fact that are expertise-sensitive. These include involving medics and disability experts for PIP and other disability hearings, accountants for tax hearings, and educational experts and mental health experts for special educational needs cases. It is really only cases involving pure points of law—generally interpretation and application of statutes and regulations—that justify single-member tribunals, as well as, possibly, cases involving fact that is not expertise-sensitive.

Expert membership of tribunals is an important feature that distinguishes them from courts. There is a clear distinction between expert evidence given by expert witnesses to judges in court, where the judges are decision-makers, and expert tribunal members taking a full part in decision-making and lending their expertise informally in discussion as well as formally to the other tribunal members. The difference in roles is important and valuable, and I suggest that it enhances public confidence in tribunals. We would not wish it to be threatened.

Important also are questions of balance. The practice direction needs to ensure that the composition of tribunals strikes a balance between opposing parties’ interests. That should be a perceived balance, clear to the public, as well as an actual balance. The classic case, of course, is three-member employment tribunals, with one lay member reflecting the employer’s interests and another the employee’s interest, alongside an employment judge. In First-tier Tribunals in respect of disability appeals, Disability Rights UK cites a disability expert member of tribunals as explaining that such experts are uniquely able to see cases from the perspective of the disabled person.

I question the wisdom of removing the requirement that the senior president should have regard to past practice. Of course, I can see why we should move on from having regard to practice at the original creation of First-tier Tribunals. That would become steadily more out of date, as the Minister pointed out. But the senior president could still be required to have regard to the composition of panels prior to any change. Existing practice can act as a salutary check on any change without excluding it.

I point out that the requirement to have regard to a practice does not require the senior president slavishly to follow it. All I say is that we can learn from experience. In fact, the system works pretty well. We appreciate the need for it to be proportionate and efficient. Broadly, we accept that that means introducing cost-saving measures, and they are fine if they will have no impact on fairness. At best, the order could keep that, but at worst, the impact could be serious. We suggest that having regard to experience is often helpful in preserving the best of what we have.

[Lord Blencathra (Con)]

My Lords, the noble Lord has just mentioned the little question I was going to ask and I apologise if my noble friend covered the point while I was scribbling some notes and trying to listen to the technical detail. It is simply about the cost: is there any additional cost to this measure or is there a cost saving? That is all I want to know.

[Lord Beecham (Lab)]

My Lords, there is no objection to reviewing the composition or indeed the working of tribunals in a system that covers significant areas of public policy and provision but which also extends to areas of law and practice in which the Government do not have a direct interest. The effect of the order as drafted is to enhance the role of the Senior President of Tribunals, notably in relation to the composition of panels, which hitherto has been the responsibility of the Lord Chancellor.

In many areas the tribunals will be adjudicating on claims and issues between the citizen and the state in relation to a variety of claims, and it may be that in many and even perhaps most of the cases in this category the proposed changes will not be controversial. There are, however, real concerns about the impact of the changes on the employment tribunal system in which the adjudication is between two independent parties, employees and employers, rather than the citizen and the state in one of its many manifestations. This is already an area in which the Government have intervened when they imposed fees for applications to the employment tribunals, an action which was of course struck down by the Supreme Court last year. The number of claims to employment tribunals has since risen by 60% with no perceptible increase in staffing and a consequential growing backlog in cases, to the detriment of both employees and employers. Can the Minister say what measures will be taken, and when, to address this issue?

However, there are issues about the application of the provisions of this order to employment cases. In a previous incarnation I had some professional experience of employment law, in all but one case on the part of employees. Employment law is, as the TUC has pointed out, a complex and specialist field of law. Among other things it is frequently concerned with equalities issues and, at least for the moment, the provisions of European law. There is therefore a very strong case for excluding these tribunals from the general provision in the order removing the requirement for the panels in the First-tier Tribunal and Upper Tribunal to have expertise in this area of law. In this I concur with what the noble Lord has said.

The TUC urges that the panels from which employment tribunals are drawn should be composed of people with experience of employment law, although not necessarily lawyers. This has the support of the CBI and other employers’ organisations. A majority of those responding in 2011 to a government consultation on the issue opposed the proposal to limit the role of lay members in unfair dismissal cases. Specifically, the TUC urges that lay members should sit in all employment-related cases, including fast-track cases, unfair dismissal and discrimination cases. It concedes, however, that where a case involves complex legal issues and, importantly, all the issues of fact are uncontested, employment judges should have discretion to sit alone.

The Government are keen, perhaps for understandable reasons, to promote virtual hearings and teleconferencing. Can the Minister say whether this extends to tribunals in general, and employment tribunals in particular? There are concerns about the reliability of these approaches and the stress on those who are unfamiliar with these systems, among whom I would probably have to include myself. There would need to be safeguards where, for example, the parties to an employment case give evidence of that kind rather than in a conventional forum, and there are some doubts about the ability of panel members to assess the credibility of witnesses or parties when such approaches are used. At the very least, will the Government pilot such methods before requiring them to be applied across the piece? Finally on this aspect, do the Government agree that virtual hearings of this kind should have to be agreed by both parties?

[Baroness Vere of Norbiton]

My Lords, I thank all noble Lords for their contributions. I agree with the noble Lord, Lord Marks, that the system does indeed work pretty well. The proposals today are just to make sure that it works slightly better than it currently does by focusing resources in the areas where we need them most.

Perhaps I could tick off an easy win by turning to the question raised by my noble friend Lord Blencathra. There are no costs relating to the proposals and indeed, there may be some cost savings, but of course the proposals themselves do not assume that. It will be up to the SPT to do the panel composition. However, in certain circumstances, lay members may not be required as a member of the panel, and in that case there will be a saving. One might assume that if there was a 25% reduction, for example, the saving would be somewhere in the region of £3 million. Again, I do not think that we should bank that; we need to be aware that resources need to be used effectively, but that is one possible consequence.

I turning to the point made by the noble Lord, Lord Marks, about the risk of damage to the quality of decision-making. I would point him to the changes which have already been made to panel composition and various other elements. For example, the Immigration and Asylum Chamber made some changes in June 2014. It decided that there would no longer routinely be a non-legal member on those panels. Over the period it looked at the proportion of cases that went to appeal and found that there was no change. I think that there is evidence that there is no risk of damage to the quality of decision-making. It will always be front of mind for the SPT to make sure that the panels are made up appropriately.

The appropriateness of the panel was raised by a number of noble Lords. It is clear that the SPT must ensure that in making these decisions, he or she has a legal duty to consider the need for tribunals to be accessible, for the proceedings to be fair and to be handled quickly and efficiently, and where needed, for the members of the tribunal to be experts in the subject matter. We do not see that that would need to change under this order. It will be up to the SPTs to decide the panel composition, whether that is for different types or groups or cases or sometimes on a case-by-case basis for very complex cases. I would go back to the original thing about this order which is that it will respond to the sort of triage system that we hope will come into force, whereby some very straightforward cases can be dealt with much more swiftly within the new system, which is good in terms of access to justice for people wishing to make a claim. On the impact of the changes in the panel composition, HM CTS routinely collects data relating to all tribunals, covering success rates, appeal rates and overturn rates of first instance appeals. We will continue to monitor that data as these changes come into effect.

The noble Lord, Lord Beecham, referred to employment tribunals. The order does not impact on those at all as it is not related to them, so it is probably not wise for me to go down that particular road today. We may look at similar provisions for employment tribunals in the future, but that would come under a different type of legislation and it is certainly not on the short-term horizon. If there are issues about employment tribunals that the noble Lord mentioned, I will be happy to write, but I am afraid that at the moment it is not wise for us to discuss it.

The provisions we have discussed today are an essential component of the Government’s ambitious plans to modernise Her Majesty’s Courts and Tribunals Service, and I commend the draft order to the Committee.

Motion agreed.

Committee adjourned at 7.29 pm.