Vexatious Claims: Challenging the Case for Employment Tribunal Fees
| Author | Abi Adams,Jeremias Prassl |
| DOI | http://doi.org/10.1111/1468-2230.12264 |
| Date | 01 May 2017 |
| Published date | 01 May 2017 |
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Vexatious Claims: Challenging the Case
for Employment Tribunal Fees
Abi Adams and Jeremias Prassl∗
Since July 2013, recourse to Employment Tribunals in the United Kingdom has attracted fees of
up to £1,200 for single claimants. The impact of this reform has been dramatic: within a year,
claims dropped by nearly 80 per cent. This paper suggests that this fee regime is in clear violation
of domestic and international norms, including Article 6(1) ECHR and the EU pr inciple of
effective judicial protection. Drawing on rational choice theory and empirical evidence, we
argue that the resulting payoff structures, negative for the majority of successful claimants, str ike
at the very essence of these rights. The measures are, furthermore, disproportionate in light of
the Government’s stated policy aims: fees have failed to transfer cost away from taxpayers, have
failed to encourage early dispute resolution, and have failed to deter vexatious litigants. The
only vexatious claims, we find, appear to be those which motivated the reforms in the first
place.
We will sell to no man, we will not deny or defer to any man either Justice or
Right.
Magna Carta, cl XXXIX
INTRODUCTION
Access to the courts is the bedrock of the rule of law: ‘rights are valueless if they
cannot be realised . . . and it is therefore essential that all . . . citizens have fair
and equal access to justice.’1In the context of employment law, the Donovan
Commission recognised early on that only a specialised tribunal system could
ensure the ‘easily accessible, informal, speedy and inexpensive’ resolution of
disputes between workers and their employers.2Today, Employment Tribunals
(ETs) have come to play ‘a central role in British employment relations’.3
∗Associate Professor, Department of Economics and New College, University of Oxford and Cowles
Foundation Postdoctoral Fellow, Yale University; Associate Professor, Magdalen College and Faculty
of Law, University of Oxford and Associate Research Scholar, Yale Law School. We acknowledge
funding from the Economic and Social Research Council, Grant ES/N017099/1, and are grateful
to John Armour, Alan Bogg, Jack Beatson, John Bowers, Mark Freedland, Ben Jones, Alan Neal,
Steve Weatherill and the anonymous reviewers, as well as seminar participants at Oxford and the
International Labour Organization, for very helpful comments on earlier drafts. The usual disclaimers
apply. A detailed technical appendix, including data and worked examples, can be downloaded from
www.abiadams.com/research/tribunalfees.
1L.Neuberger,Justice in an Age of Austerity (Tom Sargant Memorial Lecture, 2013) at [28], [26].
2Donovan Commission on Trade Unions and Employers’ Associations 1965-1968 Cmnd 3623 (1968)
Chapter X.
3 S. Corby, ‘British Employment Tribunals: from the Side-Lines to Centre Stage’ (2015) 56
Labor History 161, 161. See, P. Davies and M. Freedland, Labour Legislation and Public Policy:
C2017 The Authors. The Modern Law Review C2017The Moder n Law ReviewLimited. (2017)80(3) MLR 412–442
Published by John Wiley& Sons Ltd, 9600 Garsington Road, Oxford OX4 2DQ, UK and 350 Main Street, Malden, MA 02148, USA
Abi Adams and Jeremias Prassl
With the demise of collective representation,4and in the absence of consistent
state enforcement,5the ET system represents the only credible mechanism for
vindicating most individual employment rights.6
Claim numbers have grownaccordingly, from a mere13,555 actions in 1972,
the year in which unfair dismissal protection came into force, to 191,541 cases
in 2012/13.7With this rise in claims came concerns from some quarters about
the cost implications for employers; not least because costs awards have not
traditionally been available in order to protect the tribunals’ ‘essential character’
as a ‘cost-free user-friendly jurisdiction.’8Davies and Freedland detect a change
of emphasis in the 1980s, away from th e reali sati on of r ights ‘to discou rag ing
“undeserving” applicants from wasting management’s time over “hopeless”
claims’.9
The Coalition Government elected in May 2010 soon heeded these con-
cerns, with the introduction of employment tribunal fees becoming one of
the central elements of its extensive programme of employment law reform.10
Since July 2013, claimants have been charged issue and hearing fees of up to
£1,200 in order to bring their case to trial. The impact of this change was
swift and dramatic: within a year, claims had fallen by nearly 80 per cent. De-
spite widespread stakeholder concerns and multiple rounds of judicial review
proceedings, however, the fees regime remains in force.
This paper sets out to challenge the Government’s case for tribunal fees.11
We argue that tribunal fees have become a powerful barrier to justice, in
violation of domestic and international norms which protect the fundamental
right of access to courts or tr ibunals – from the EU law principle of effective
judicial protection to Article 6(1) of the European Convention of Human
Rights (ECHR). The regime as introduced violates the very essence of these
rights, as the majority of mer itorious claimants can expect to be faced with
a net financial loss, even following success in their substantive arguments. As
detailed scrutiny of the Government’s economic policy case shows, the Fees
Order 2013 is, furthermore, a clearly disproportionate measure in pursuit of
A Contemporary History (Oxford: OUP, 1993) 161-164, 204-208. The original ter minology of
Industrial Tribunals was abolished by the Employment Rights (Dispute Resolution) Act 1998,
s 1(1).
4 Department for Business, Innovation and Skills, Trade Union Membership 2014: Statistical Bulletin
(London, 2015): 6.4 million members, or 25% density.
5 The United Kingdom appointed labour inspector s as early as 1833; today there remains but
a limited patchwork of area-specific agencies: Lab/Admin, ‘Labour Inspection: What it is and
What it does’ (Geneva: ILO, 2010) 8.
6 We discuss the role of alternative dispute mechanisms, including notably the Advisory, Concili-
ation, and Arbitration Service (ACAS), below.
7 Corby, n 3 above, 163.
8Gee vShell Ltd [2002] EWCA Civ 1479, [2003] IRLR 82 at [35].
9 Davies and Freedland, n 3 above, 208. For subsequent attempts to temper enforcement, see,
for example, B. Hepple and G. Morris, ‘Employment Act 2002 and the Crisis of Individual
Employment Rights’ (2002) 31 ILJ 245, 247.
10 J. Prassl, ‘“All in this Together?” Labour Markets in Crisis’ (2014) 1 Hungarian Labour Law
E-Journal 23.
11 Whilst the regime as introduced covers both ETs and Employment Appeal Tribunals (EATs),
judicial review proceedings have focused on the former as representative for both; we proceed
on the same assumption.
C2017 The Authors. The Modern Law Review C2017 The Modern Law Review Limited.
(2017) 80(3) MLR 412–442 413
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