Courts and Tribunals Fees

Rupa Huq Excerpts

Monday 4th July 2016 Commons Chamber

[Dr Rupa Huq (Ealing Central and Acton) (Lab)]

I rise to speak as a member of the Justice Committee, whose report we are considering. I wish to add my hearty congratulations to our Chair, the hon. Member for Bromley and Chislehurst (Robert Neill), on his brilliant opening statement; for a while, I thought that there was going to be nothing left for me to say, and I shall be brief as a result.

I also want to congratulate our new shadow Lord Chancellor, my hon. Friend the Member for Leeds East (Richard Burgon). [Interruption.] I see that the Lord Chancellor is not here—perhaps his mind is on other matters. What we are considering is far from what he is thinking about at the moment.

It is worth restating that, like all Select Committees, the Justice Committee is a majority Conservative Committee, but we were pretty unanimous in our conclusions on court and tribunal fees. As the Chair pointed out at the start of this debate, our inquiry included the criminal courts charge at the beginning. Our report on that voiced grave misgivings and recommended the abolition of that unfair charge as soon as possible, as it acts as a barrier to justice. Encouragingly, there has been action on that. We welcome the fact that the Government acted swiftly in response to our criticism. We now wish that history would repeat itself with the highly unpopular tribunal fees.

We still await the publication of the Government’s long-awaited post-implementation review of the impact of employment tribunal fees. That was announced in June 2015 and our Committee has called for this to happen urgently. We recommended that fees for employment tribunals be “substantially reduced”. However, the Opposition would go further and recommend abolition. I am proud to have stood on a manifesto at the last general election that urged abolition. I do not know what is in our next manifesto. Four years is a long way off, so I shall not get into Mystic Meg territory.

Ability to pay, or the thickness of the wodge in someone’s wallet, should not determine their access to justice. Fees should not be a barrier to those on low incomes bringing employment tribunal claims. That is what I want to address in this short contribution. It is a cause for concern that women in particular have been hard hit by employment tribunal fees, as shown by the fact that sex discrimination, pregnancy, maternity and equal pay claims have all fallen.

The austerity cuts have hit women hardest—some analyses show that 80% of all cuts hit women. That gives weight to the claim that the Prime Minister—he is still the Prime Minister, isn’t he, though not for that much longer—has a problem with women. It is interesting that the two main runners and riders to replace him are women. Let us see what the future brings.

The Justice Committee interviewed numerous witnesses. We had four evidence sessions, with 23 people appearing before us, and written submissions from 91 stakeholders ranging from pillars of the establishment, such as the Bar Council, to specialist pressure groups, including the self-explanatory Pregnant Then Screwed—that is its name.

Maternity Action gave evidence of maternity discrimination and found that on pregnancy discrimination in particular there has been a fall of 40% in the number of claims in the immediate aftermath of the introduction of fees—40% down. That is nearly half. The group’s figures from 2005 suggest that less than 10% of women suffering pregnancy and maternity discrimination would present themselves anyway, for fear of repercussions.

The Under-Secretary of State for Justice, the hon. Member for North West Cambridgeshire (Mr Vara), who is a pleasant chap, and who is here now, told us repeatedly that ACAS has reported an upsurge in people presenting themselves there. The figure of 84,000 extra cases for ACAS was mentioned. That is not a way to bat away the issue. We identified a number of problems. Part of the justification for the introduction of fees was to recover costs, but in both employment tribunals and the immigration and asylum chamber there has been a massive mismatch between costs and recovery. The costs recovered have fallen far short of what was projected. According to the Courts and Tribunals Service’s annual report for 2014-15, the cost recovery target for employment tribunal fees was set at around 33%. Only 17% has been achieved. For the immigration and asylum chamber, recovery was projected to be around 25%, but in reality it has been a measly 9%.

To add insult to injury, the latest accounts from the Ministry of Justice show that in 2014-15 net income from employment tribunal fees was £9 million, whereas expenditure on the service was £71.4 million. That is a poor ratio. The fees make bad business sense. Just 12.5% of the costs were recovered, at a time of fiscal belt-tightening, when we should justify every pound of public expenditure.

We received evidence from the TUC and Thompsons, the trade union solicitors, that fees have decreased employer engagement with early conciliation. Fees act as a disincentive because people wait to see whether the other side can afford them. If not, there is no point in the public policy initiative to settle before the case gets to the courtroom door.

My hon. Friend the Member for Hammersmith (Andy Slaughter) talked about claims without merit. I will not go into that, as I said I would be brief.

The Government’s policies have impacted on access to justice in a number of ways. Employment tribunal fees were introduced not in a vacuum, but against a background of measures such as the civil court fee increases, legal aid cuts, restrictions on judicial review, the Trade Union Bill, and the proposal to repeal the Human Rights Act. Some Ministers have mooted leaving the European convention on human rights. In our opinion, the cumulative effect of all these things is chipping away at access to justice.

I am a member of Unison, which has said:

“Over the last three years tribunal fees have prevented many people who have been wronged at work from taking their employers to court.

Unscrupulous bosses can hardly believe their luck. They can pretty much treat their staff as badly as they choose, safe in the knowledge they are never likely to be taken to a tribunal.”

Unison is mounting a legal challenge, which is due to be heard at the Supreme Court later this year. Other stakeholders have voiced similarly damning criticisms. The Bar Council called it “a shot in the dark”. Citizens Advice highlights the anomaly whereby the fees are higher than the sum claimed, so they make no business sense. The Law Society talks of “treating justice like a commodity”.

Our report says that

“the overall quantum of fees charged for bringing cases to employment tribunals should be substantially reduced”.

I say they should be completely abolished. In the words of the report,

“further special consideration should be given to the position of women alleging maternity or pregnancy discrimination.”

I would drink to that any day.

I agree with the report’s finding that

“the increase in the divorce petition fee, from £410 to £550, be rescinded”,

and that the review of the employment tribunal fees needs to be published before the Government steam ahead with the hare-brained mistaken aim of full costs recovery in the immigration and asylum chamber. There are more holes in these policies than in a colander—tribunal fees preventing access to justice and trampling on employment rights, the reduction in sex discrimination and equal pay claims at the employment tribunal, and the delayed publication of the review of employment tribunal fees. We should be increasing access to justice, not restricting it, particularly at a time of austerity.

--- Later in debate ---

[Mr Raab]

I am going to make a bit more progress. I have been given some time, and I have given way to hon. Members from across the House. If towards the end I have got time, I would be happy to take the hon. Lady’s intervention.

I turn to divorce fees, about which hon. Members have made some important points. The Justice Committee criticised the recent increase in the fee for divorce to £550, primarily because of the risk to vulnerable women. The Government have sought to make sure that vulnerable women are protected within the divorce fees scheme. Although it is true—this point has been made—that more women than men petition for divorce, it is also true, although it was rather neglected in this debate, that women are more likely to qualify for a fee remission. In the circumstances of a divorce or any other matter where the parties have conflicting interests in proceedings, the applicant is assessed on his or her own means, rather than on those of the household. For victims of domestic violence, the first priority is to ensure the victim’s safety. There is no court fee for an application for a non-molestation order or any applications in relation to one.

I turn to money claims. There has been criticism of the introduction of enhanced fees for money claims in March 2015, and some criticism of the quality of the research that supported those increases. We have said all along that we took the decisions that we did based on the best evidence available at the time. As things have turned out, the impact of those fee increases on the volume of claims has been greater than we thought. It is easy to be wise in hindsight, and we are investigating the reasons, but in the meantime we have decided not to implement the further increases we proposed. But given the very challenging financial circumstances, we have been clear—I want to be honest with the Chair of the Select Committee and hon. Members—that we may need to come back to those and look at them again when we have got a better understanding of the specific impacts.

There have been criticisms of our proposals to raise the fee in immigration tribunals to full cost levels. We estimate that those proposals would generate about £35 million a year in additional income. The normal policy over many years has been to charge fees at full cost unless there are good reasons not to. I do not see, given the remissions and the other flexibility, why the taxpayer should foot the bill in this case. We are currently considering in detail the responses to the consultation. Under our proposals, certain types of appeal would continue to be exempt from fees; we are talking about vulnerable people who need such flexibility the most. People receiving means-tested benefits, such as asylum support, would continue to have fees waived. We sought views on further exemptions, and specifically on whether we should exempt people in receipt of a Home Office destitution waiver. We are making sure that, notwithstanding the difficulty of the decisions, the most vulnerable are protected.

Meeting the challenges ahead cannot just be about increasing fees. That is why we recognise the need to invest in the courts and tribunals so that they are lean, efficient and fit to serve a modern, digital society. In the spending review, we announced that we would be investing, as I have said, more than £700 million to transform our courts and tribunals system. The scale of that investment and the ambition of our reform plans will enable us to build a justice system that is simpler, swifter and more efficient, because it takes better advantage of modern technology.

Other points and criticisms have been made. We take them on board, and we will respond to them fully in due course. We also need to have a sense of realism. Given the financial situation that we are still grappling with, fees are a critical part of the Ministry of Justice’s plans to meet our spending review challenges.

[Dr Huq]

Could the Minister tell us the cost of administering the employment tribunal fees? There is a mismatch between what they raise and what they cost.

[Mr Raab]

My understanding, off the top of my head, is that it was £71 million. I will come back to the hon. Lady if I find out that that is incorrect.

The truth is that we cannot afford to duck these decisions around fees if we want to secure the long-term funding of the courts and the tribunals and deliver on the mandate on which the Government were elected. It is all very well for the Opposition to say that they want to scrap every fee that has been imposed or duck every difficult decision, but unless they can explain to the House how that will be paid for or the impact that it will have on our economy, it is not the responsible thing to do.