R (on the application of Unison) v Lord Chancellor
| Jurisdiction | England & Wales |
| Judge | Lord Reed,Lord Neuberger,Lord Mance,Lord Kerr,Lord Wilson,Lord Hughes,Lady Hale |
| Judgment Date | 26 July 2017 |
| Neutral Citation | [2017] UKSC 51 |
| Date | 26 July 2017 |
| Court | Supreme Court |
[2017] UKSC 51
Lord Neuberger, President
Lady Hale, Deputy President
Lord Mance
Lord Kerr
Lord Wilson
Lord Reed
Lord Hughes
Appellant
Dinah Rose QC
Karon Monaghan QC
Iain Steele
Matthew Purchase
(Instructed by UNISON Legal Services)
Respondent
David Barr QC
Victoria Wakefield
(Instructed by The Government Legal Department)
Intervener (1)
Michael Ford QC
Mark Whitcombe
Spencer Keen
(Instructed by Equality and Human Rights Commission)
Intervener (2)
(Written submissions only)
Aidan O'Neill QC
(Instructed by Balfour & Manson)
(1) Equality and Human Rights Commission
(2) Independent Workers Union of Great Britain
Heard on 27 and 28 March 2017
( with whom Lord Neuberger, Lord Mance, Lord Kerr, Lord Wilson and Lord Hughes agree)
The issue in this appeal is whether fees imposed by the Lord Chancellor in respect of proceedings in employment tribunals ("ETs") and the employment appeal tribunal ("EAT") are unlawful because of their effects on access to justice.
ETs have jurisdiction to determine numerous employment-related claims, most of which are based on rights created by or under Acts of Parliament, sometimes giving effect to EU law. They are the only forum in which most such claims may be brought. The EAT hears appeals from ETs on points of law. Until the coming into force of the Employment Tribunals and the Employment Appeal Tribunal Fees Order 2013, SI 2013/1893 ("the Fees Order"), a claimant could bring and pursue proceedings in an ET and appeal to the EAT without paying any fee. The Fees Order prescribes various fees, as will be explained.
In these proceedings for judicial review, the trade union UNISON (the appellant), supported by the Equality and Human Rights Commission and the Independent Workers Union of Great Britain as interveners, challenges the lawfulness of the Fees Order, which was made by the Lord Chancellor in the exercise of statutory powers. It is argued that the making of the Fees Order was not a lawful exercise of those 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 issues relating to discrimination are addressed in the judgment of Lady Hale, with which I respectfully agree. The present judgment deals with the remaining issues.
Section 42 (1) of the Tribunals, Courts and Enforcement Act 2007 ("the 2007 Act") provides that the Lord Chancellor may by order prescribe fees payable in respect of anything dealt with by the First-tier and Upper Tribunals or by an "added tribunal". Section 42(3) defines an "added tribunal" as a tribunal specified in an order made by the Lord Chancellor. The ET and the EAT were so specified by the Added Tribunals (Employment Tribunals and Employment Appeal Tribunal) Order 2013 (SI 2013/1892).
Relationships between employers and employees are generally characterised by an imbalance of economic power. Recognising the vulnerability of employees to exploitation, discrimination, and other undesirable practices, and the social problems which can result, Parliament has long intervened in those relationships so as to confer statutory rights on employees, rather than leaving their rights to be determined by freedom of contract. In more recent times, further measures have also been adopted under legislation giving effect to EU law. In order for the rights conferred on employees to be effective, and to achieve the social benefits which Parliament intended, they must be enforceable in practice.
In 1968 the Donovan Report (the Report of the Royal Commission on Trade Unions and Employers' Associations, Cmnd 3623) recommended that labour tribunals should be established to provide "an easily accessible, speedy, informal and inexpensive procedure" for the settlement of employment disputes (para 578). As a result, the jurisdiction of industrial tribunals, originally established by the Industrial Training Act 1964 to hear appeals concerning training levies, was extended to include jurisdiction over a wide range of employment rights. In 1998, they were renamed employment tribunals.
ETs are intended to provide a forum for the enforcement of employment rights by employees and workers, including the low paid, those who have recently lost their jobs, and those who are vulnerable to long term unemployment. They are designed to deal with issues which are often of modest financial value, or of no financial value at all, but are nonetheless of social importance. Their procedural rules, which include short limitation periods and generous rights of audience, reflect that intention. It is also reflected in the fact that, unlike claims in the ordinary courts, claims in ETs could until recently be presented without the payment of any fee. The Leggatt Report (the Report of the Review of Tribunals, 2001) identified the absence of fees as one of the three elements which had rendered ETs successful.
In January 2011 the Government published a paper entitled Resolving Workplace Disputes: A Consultation, in which it announced its intention to introduce fee-charging into ETs and the EAT. Charging fees was considered to be desirable for three reasons. First, and most importantly, fees would help to transfer some of the cost burden from general taxpayers to those that used the system, or caused the system to be used. Secondly, a price mechanism could incentivise earlier settlements. Thirdly, it could dis-incentivise unreasonable behaviour, such as pursuing weak or vexatious claims.
Detailed proposals were published in December 2011 in a consultation paper issued by the Ministry of Justice entitled Charging Fees in the Employment Tribunals and the Employment Appeal Tribunal. Two alternative options for ETs were discussed, one of which went on to form the basis of the system set out in the Fees Order. The option which was ultimately preferred (Option 1) based the fee on the subject-matter of the claim (since the level of tribunal resources used generally depends on the complexity of the issues raised by the claim) and on the number of claimants (since claims brought by two or more people that arise from the same circumstances are processed together as multiple claims). It was proposed that an "issue fee" should be paid at the time of lodging the claim, and that a further "hearing fee" should be paid in advance of a final hearing.
The paper explained that the main purpose of a fee structure was to transfer part of the cost burden from the taxpayer to the users of the service, since a significant majority of the population would never use ETs but all taxpayers were being asked to provide financial support for this service. However, fees must not prevent claims from being brought by making it unaffordable for those with limited means. A fee remission system would therefore be a key component of the fee structure. The other issues taken into account were the importance of having a fee structure which was simple to understand and administer, and the importance of encouraging parties to think more carefully about alternative options before making a claim.
The paper noted that the impact of fees on the number of claims was difficult to forecast, in the absence of research concerned specifically with ET users. Research into the impact of fee-charging in the civil courts suggested that tribunal users required to pay a fee would not be especially price sensitive. The charging of fees in two stages, at the commencement of the proceedings and prior to a final hearing, was intended to reflect the cost of the services provided at each stage, and to encourage users to consider settlement during as well as before the tribunal process.
An impact assessment was published in May 2012. It concluded that it was not possible to predict how claimants would respond to the introduction of fee-charging. Two alternative assumptions were therefore made for modelling purposes. On the low response scenario, demand was assumed to decrease by 1% for every £100 of fee. On the high response scenario, demand was assumed to decrease by 5% for every £100 of fee. The methodology was then to place an economic value on the costs and benefits of implementing Option 1. One of the non-monetised benefits was identified as being "reduced 'deadweight loss' to society as consumption of ET/EAT services is currently higher than would be the case under full cost recovery". In that regard, the analysis proceeded on the basis that the consumption of ET and EAT services without full cost recovery resulted in a "deadweight loss" to society. As was stated:
"This assumes that there are no positive externalities from consumption. In other words, ET and EAT use does not lead to gains to society that exceed the sum of the gains to consumers and producers of these services." (p 38)
Under the heading "Justice Impact Test", the document adverted only to the financial impact on HM Courts and Tribunals Service (HMCTS).
A response to the consultation and an equality impact assessment were published in July 2012. The response announced that the Government had decided to implement Option 1 with some amendments. Access to justice would be maintained by ensuring via the remissions scheme that those who could not afford to pay fees were not financially prevented from making a claim. Suggestions that the deterrence of individual claims would have wider societal impacts were rejected.
On 25 April 2013 a draft of the Fees Order was laid before...
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