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Supreme Court rules Tribunal Fees Order is unlawful under both domestic and EU law and must be quashed

The Employment Tribunals and the Employment Appeal Tribunal Fees Order 2013 came into force on 29 July 2013, under which a claimant bringing and pursuing proceedings in an ET and appeal to the EAT had to pay fees.
Justice

The Employment Tribunals and the Employment Appeal Tribunal Fees Order 2013 came into force on 29 July 2013, under which a claimant bringing and pursuing proceedings in an ET and appeal to the EAT had to pay fees. The stated aims of the Fees Order were to transfer part of the cost burden of the tribunals from taxpayers to users of their services, to deter unmeritorious claims, and to encourage earlier settlement.

In R (on the application of UNISON) v Lord Chancellor, the trade union UNISON argued that the making of the Fees Order was not a lawful exercise of the Lord Chancellor’s statutory powers, because the prescribed fees interfere unjustifiably with the right of access to justice under both the common law and EU law, frustrate the operation of Parliamentary legislation granting employment rights, and discriminate unlawfully against women and other protected groups.
The High Court and the Court of Appeal rejected UNISON’s argument, but the Supreme Court has upheld UNISON’s appeal ruling unanimously that the Tribunal Fees Order is unlawful under both domestic and EU law because it has the effect of preventing access to justice. Since it had that effect as soon as it was made, it was therefore unlawful and must be quashed. The Supreme Court’s reasoning is summarised below.

The constitutional right of access to the courts is inherent in the rule of law: it is needed to ensure that the laws created by Parliament and the courts are applied and enforced. Tribunals are more than merely the providers of a service which is only of value to those who bring claims before them. As a matter of domestic law, the Fees Order is unlawful if there is a real risk that persons will effectively be prevented from having access to justice, or if the degree of intrusion into access to justice is greater than is justified by the purposes of the Fees Order.

The ET and EAT fees bear no direct relation to the amount sought and can therefore be expected to act as a deterrent to claims for modest amounts or non-monetary remedies (which together form the majority of ET claims). The recoverability of costs upon success cannot be decisive of the question of access to justice as that right is not restricted to the ability to bring successful claims. Indeed, the evidence before the Court shows that the effect of the Fees Order was a dramatic and persistent fall in the number of claims brought in ETs, with a greater fall in the number of lower value claims and claims in which a financial remedy was not sought.

The question of whether fees effectively prevent access to justice must be decided according to the likely impact of the fees on behaviour in the real world. Where households on low to middle incomes can only afford fees by forgoing an acceptable standard of living, the fees cannot be regarded as affordable. Although the stated purposes of the Fees Order are legitimate aims, it has not been shown that the Fees Order was the least intrusive means of achieving those aims. The Fees Order is also unlawful as it contravenes the EU law guarantee of an effective remedy: it imposes disproportionate limitations on the enforcement of EU employment rights.

Finally, the Fees Order is indirectly discriminatory under the Equality Act 2010 because the higher fees for type B claims put women at a particular disadvantage, because a higher proportion of women bring type B than bring type A claims. The charging of higher fees was not a proportionate means of achieving the stated aims of the Fees Order. Further, meritorious as well as unmeritorious claims might be deterred by the higher price, and there was no correlation between the higher fee and the merits of the case or incentives to settle.


The aim is to provide summary information and comment on the case and the legal issues involved. While every care has been taken in compiling this information, SM&B cannot be held responsible for any errors or omissions. Specialist legal advice must be taken on any legal issues that may arise before embarking upon any formal course of action.

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