Courts and Tribunals Fees

Lord Hanson of Flint Excerpts

Monday 4th July 2016 Commons Chamber

[Mr David Hanson (Delyn) (Lab)]

I, too, welcome the work undertaken by the Justice Committee, of which I am a member. I am also grateful for the chairmanship of the Committee of the hon. Member for Bromley and Chislehurst (Robert Neill), who has brought us to a consensus on the recommendations in the report. The Government need to reflect very seriously on those recommendations. At the heart of the proposals before us today is access to justice, and that issue is also central to our recommendations.

As the Chair of the Justice Committee has said, we remain concerned first and foremost that the Minister has not yet brought forward the results of the review. That has influenced very strongly how we have been able to present our report, as well as the points we are putting today and the way we are putting them. The Minister could have saved himself a lot of trouble had he brought forward the information requested in the timescale in which we requested it.

As hon. Members will know, during the 2010-2015 Parliament the coalition Government pursued a range of policies aimed at decreasing the net cost of Her Majesty’s Courts and Tribunals Service through the pursuance and introduction of a range of various fees, including, in particular, charges for employment tribunals. As the Chair of the Justice Committee has said, we looked at whether the increase in court fees and the introduction of fees for employment tribunals had affected access to justice. It is fair to say that the conclusions of all members of the Committee were straightforward, especially in the area I will focus on, namely the recommendations on employment tribunal fees. All the evidence we have had—from the judiciary, the trade union movement and organisations dealing with vulnerable people with especially vulnerable status relating to maternity provisions or other similar issues—has shown that there is a real challenge from the impact of fees on employment tribunals as a whole.

I will make one plea to the Minister. It would be helpful if, before the summer recess, he could meet the commitment that he gave to the Committee to publish the results of his one-year review as soon as possible. Given our concerns, it is important that that information is put into the public domain. This is not something he can avoid. He said that he would deliver that information to the Committee before it reported, yet even after the publication of the report the Committee has still not seen it.

Employment tribunal fees are of particular concern to members of the Committee from across the House—certainly to me. As I have just said, the Committee found it unacceptable that the Government had not reported on their review. There was also some damning evidence about the impact of employment tribunal fees on access to justice.

Let me touch on a couple of statistics so the House can get a flavour of why we have those concerns. The number of employment tribunal cases brought by single individuals declined by 67% to around 4,500 per quarter between October 2014 and June 2015. The number of cases brought by more than one person—multiple claims—declined by 72%, from 1,500 per quarter to around 400 per quarter. That is a major decline. It is important that the Minister reflects on that. Is that decline because there are no injustices in the workplace? Is it because people do not feel aggrieved with their employment position? Has the figure declined because people have decided that applying to the employment tribunal for justice is not worth a candle? To all three questions, the answer is no. The decline is due to the prohibitive fees that the Government have put in place.

Statistics provided to the Committee by the TUC and Unison compare cases brought in the first three months of 2013 and 2015, and they show reductions across the board in areas of key industrial activity. For example, the number of cases brought to employment tribunals under the working time directive fell by 78%. My question, which I hope the House will reflect on, is this: is that because 78% fewer employers are making people work longer than their hours under—dare I say it?—European legislation?

The number of tribunals brought for unauthorised deductions from wages has fallen by 56%. Has some miraculous activity meant that employers stopped unfairly deducting from individuals’ wages during that period? If so, the information that the Minister is supposed to have considered might help us to understand that fall in wage deductions. Cases of unfair dismissal have fallen by 72%, equal pay claims are down by 58%, and those for a breach of contract by 75%. Sex discrimination cases have fallen by 68%. Therefore, one of two things has happened: either employers have dramatically improved their performance over the past two years in those areas, in which case let us see the evidence to show that; or people who have been unfairly discriminated against regarding deductions from wages, breach of contract, sex discrimination, the working time directive, or unfair dismissal, have not taken their claims to courts and employment tribunals because of the fees introduced by the Government.

Several cross-party witnesses to the Committee claimed that on maternity pay and pregnancy, for example, employment tribunal fees were having a profoundly discriminatory effect on pregnant women and new mothers who receive poor treatment at work. Rosalind Bragg of Maternity Action said that fees had led to a 40% drop in claims for pregnancy-related detriment or dismissal. The Fawcett Society—again, not a party political organisation—stated that pregnancy discrimination was widespread in the public and private sectors, but that very few women were able to take action because of the deterrent effect of the fees.

That is particularly true for low-value claims. When people are deciding whether to take a case to a tribunal, they will inevitably weigh the cost of the fee against the likely size of an award. If the likely size of an award is low but the sense of having access to justice and feeling strongly about an issue remains high, the levels of fees are still deterring people from taking claims to employment tribunals. Do not listen to me, Madam Deputy Speaker—the Council of Employment Judges told us that, and said that there had been a

“particularly marked decline in claims for unpaid wages, notice pay, holiday pay and unfair dismissal”.

Those are the types of cases brought by ordinary working people, and those are the words of the Council of Employment Judges, not mine.

That shows that there is a problem that the Minister needs to consider seriously. If his evidence indicates that the problem is not as we think it is, he should bring that evidence forward so that we can consider it. The Council of Employment Judges also stated:

“Many judges reported that they now hear no money claims at all. Prior to the introduction of fees money claims were often brought by low paid workers in sectors such as care, security, hospitality or cleaning and the sums at stake were small in litigation terms but significant to the individual involved. There are few defences to such claims and they often succeeded.”

Now, however, such cases are not being taken forward, which should be a worry to the House.

In written evidence, Unison used figures for the median awards for different types of discrimination claims in 2012-13—ranging from just under £4,500 in age discrimination cases, to £7,500 in disability discrimination cases—to support its contention that fees constituted such a high proportion of probable awards that many claims would not go forward because people found them excessively difficult to pursue. Indeed, a survey by Citizens Advice indicates that 47% of its respondents would have to put aside—wait for this, Madam Deputy Speaker—six months of their discretionary income to be able to afford the £1,200 needed to bring a type B claim. If people on a low income feel aggrieved but have to put away £1,200—six months of their discretionary income—it is self-evident that those who have a just claim will not take it forward because of the fee.

[Dawn Butler (Brent Central) (Lab)]

Does my right hon. Friend concur with trade union reports, which have found that women and black and Asian people have been particularly affected by not being able to afford the fees?

[Mr Hanson]

That is an important point. Women are more likely to be in low-paid jobs and there is employment discrimination in many areas against black, Asian and minority ethnic communities. The key point in the case I am putting to the Government is that the Committee heard evidence showing that the fees have a discriminatory effect. The Government have investigated this matter, but have not yet produced their report to say whether they believe that to be the case. There may be other reasons—I do not doubt that there are—but the key point from today’s report is for the Government to provide evidence to the House. The Committee was unanimous in saying that there is a discriminatory effect that deters claims from the poorest, the lowest paid and those in the most insecure employment. It is therefore hitting those who have no other defence than an employment tribunal, which is now out of reach.

This is a matter of access to justice, which we on the Committee, on a cross-party basis, have put on the agenda. We have said that there is a real case to answer. It is for the Minister, both today and in the future, to respond to the report and answer that case.

--- Later in debate ---

[Mr Raab]

My hon. Friend raises a perfectly legitimate point. If he is willing to be patient, I will write to him with any precise details that I have.

In its report, the Committee accepts the principle of charging court users a contribution towards the cost of operating our courts. Whatever the specifics, I think that that principle is accepted. It is a question of balance between taxpayer subsidisation and user pay. I welcome the Committee’s finding in that regard.

Under the Treasury’s “Managing public money” rules, fees for public services should usually be set at a level designed to meet the cost of those services. However, Parliament has granted, through the Anti-social Behaviour, Crime and Policing Act 2014, a power that allows the Government to set court and tribunal fees at a level above the cost of the service. The income from those fees must be used to fund an efficient and effective system of courts and tribunals. When setting these fees, the Lord Chancellor must have regard to a number of factors, including the need to preserve access to justice. I assure hon. Members that we take that requirement seriously. The idea that somehow a profit is being made is not accurate according to the law, let alone the practice.

I will now turn to the specifics of employment tribunals. I appreciate the concerns expressed both by the Committee and by hon. Members across the aisles. Those who have spoken today have mentioned in particular the impact of fees on employment tribunals. When fees were introduced, there were three main objectives. The first was to transfer a proportion of the cost of the tribunal from the taxpayer to those who use it, where they can afford to pay. The second was to encourage people to consider other ways of resolving disputes, in particular the ACAS conciliation services, which are provided free of charge. There has been virtually no mention of them in this debate. The third objective was to protect access to justice. I do not think that anyone could disagree that those are legitimate aims to pursue.

The main concern about employment tribunal fees has been the large fall in the number of claims immediately after fees were introduced, but it is not that surprising that the volume of claims has fallen. It is obvious that more people will use a service if it is free than if they have to pay to use it. It is also worth reminding hon. Members across the House of a few key facts. First, help is available for those who cannot afford to pay, through fee remissions. Under that scheme, someone who is eligible for help may have the fee waived either in part or in full. We have taken steps to make sure that more people are aware of the help available, and that has led to a marked increase in take-up under the scheme.

Secondly, and crucially, the introduction of the ACAS early mandatory conciliation service has been a success, with more than 83,000 people referring their disputes to ACAS in the first year. As many people are using the ACAS conciliation service now as were previously referring their disputes to the ACAS voluntary service and the employment tribunals combined. That is important, regardless of whether the dispute ends up with a meritorious claim succeeding; it is valuable that potentially divisive disputes can be settled in that way.

[Mr Hanson]

When will the Minister publish the impact assessment that the Committee has asked for?

[Mr Raab]

I will come on to that, if the right hon. Gentleman will bear with me for a few moments, because there are a lot of other points to get through. The point—this has been missed almost entirely in the debate—is that we are seeing the right kind of behavioural change.

Thirdly, the tribunal has the power to order the respondent to reimburse the claimant with his or her fee, if the claim is successful. Finally, on top of that, the Lord Chancellor has an additional power to remit fees where there are exceptional circumstances.

I appreciate that the Committee and hon. Members have not been shy in criticising the delay in completing the review. It is true that when we announced the review in June last year, we had hoped to finalise it by the end of the year. That simply was not possible and it is clearly important that we take time to carefully consider all the relevant material. It is regrettable that it has taken longer than planned, and I am sorry about that. I have looked into the situation and we will get the response published as soon as possible.

In our evidence to the Committee, however, we made it clear that, while we hoped that the review would be completed swiftly, we could not give a firm commitment on timing. I reassure hon. Members and the Chair of the Committee that the review is very close to completion, so I hope to be able to make an announcement in the near future.