In what was a landmark ruling, the highest court in the UK, yesterday declared employment tribunal fees to be ‘inconsistent to the access to justice.’
The decision represents a humiliating defeat for the government, who have been forced to scrap the controversial fee system.
The Supreme Court voted in favour of the trade union Unison, which argued that fees of up to £1,200 were preventing workers - particularly people on lower incomes, from getting justice.
Associate Professor Abi Adams, from the Oxford Department of Economics, and Associate Professor Jeremias Prassl, from the Oxford Faculty of Law, welcome the gravity of the ruling and what it could mean for workers who make future claims. In research published earlier this year, the two argued that the 2013 Order introducing Employment Tribunal Fees was a ‘clear violation’ of long-established UK and EU law.
Access to Justice is the bedrock of the Rule of Law. Today’s unanimous Supreme Court judgement vindicates one of the most fundamental principles of our Constitution, dating back to Magna Carta: everyone has the right to be heard before the Courts.
Everyone? Well, at least until 2013. Nearly four years ago, Chris Grayling (one of the most disastrous Lord Chancellors in recent history) introduced fees of up to £1,200 for employment tribunal claims. Even relatively straightforward claims (e.g. for unpaid wages, median value just under £600) cost £390 to bring – with no guarantee of recovery, even for successful claimants.
The impact was swift and brutal: within months, claims had dropped by nearly 80%. And it was entirely predictable: when we crunched the government’s own numbers, it became clear that 35-50% of those who won their case risked losing out financially. Most workers with low-value claims simply gave up.
Bad news for workers, of course – but also for employers. Without enforcement, employment rights are meaningless, as Matthew Taylor’s recent review of modern working practices acknowledged. Rogue employers can get away with undercutting those who comply with the law. Both the High Court and the Court of Appeal, however, upheld the government’s fees in a series of challenges brought by Unison, the trade union.
The Supreme Court’s powerful judgement could not have disagreed more strongly: the Fees Order, the Justices unanimously agreed, ‘effectively prevents access to justice, and is therefore unlawful.’ Their conclusion was built both on fundamental constitutional theory, ‘elementary economics’, and ‘plain common sense’.
Constitutional theory first: ‘It may be helpful’ Lord Reed politely suggested, ‘to begin by briefly explaining the importance of the rule of law’. There’s little to add to his powerful analysis:
Courts exist in order to ensure that the laws made by Parliament, and the common law created by the courts themselves, are applied and enforced. In order for the courts to perform that role, people must in principle have unimpeded access to them. Without such access, laws are liable to become a dead letter, the work done by Parliament may be rendered nugatory, and the democratic election of Members of Parliament may become a meaningless charade.
Whilst the Lord Chancellor’s aims of deterring vexatious litigants and raising money for the Ministry of Justice may well be legitimate in principle, in practice they had achieved something different altogether: given the financial risks even when successful, ‘no sensible person will pursue the claim’.
There was more elementary economics and plain common sense to come, demolishing the Lord Chancellor’s insistence that ‘the higher the fee, the more effective it is’ and that no public benefits flowed from the justice system, amongst others.
Where does this leave us? In the short term, things will get messy (and expensive) for the Ministry of Justice: in 2013, the Lord Chancellor undertook to repay all fees illegally levied, and there may well be further arguments about extending time limits for claimants who were deterred from bringing claims in the first place. Going forward, our rational choice model furthermore suggests that similar challenges could be brought to fees introduced in other areas of the civil justice system.
For now, it’s time to celebrate: employment tribunals have already begun to scrap the fees, and claimants across the country will once more have access to the ‘easily accessible, speedy, informal and inexpensive’ system first set up nearly 50 years ago.
‘An unenforceable right or claim’, the late Lord Bingham reminded us, ‘is a thing of little value to anyone.’ The Supreme Court did well to heed his words, and restore the Rule of Law.
About the authors
Abi Adams (@abicadams) is an Associate Professors in Economics at the University of Oxford, a research Fellow at the Institute of Fiscal Studies, and a Fellow of New College. She specialises in labour and behavioural economics with an empirical bent.
Jeremias Prassl (@JeremiasPrassl) is an Associate Professor in the Faculty of Law at the University of Oxford and a Fellow of Magdalen College. He writes on UK and European Employment Law, with a particular interest in the future of work in the gig economy.