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In July of this year, the Supreme Court ruled that employment tribunal fees were unlawful and, as a result, all fees paid since the inception of the scheme in 2013 now have to be refunded.

When the fees were introduced as part of the government’s £1 billion courts service modernisation initiative, they were heralded as a way to reduce the cost burden on tax payers and protect businesses from spurious claims. However, following intervention by Trade Union ‘Unison’, who deemed the fees as preventing access to justice, the government was forced to bring the practice to a halt.

We saw our policies step in and respond to the introduction of the fees as it covered the cost and offered legal advice to individuals in the early conciliation process.

While the government indicated that their objectives for the fees had broadly been met, the numbers of claims brought in employment tribunals decreased by 79%, and there was evidence that fees have discouraged some from bringing proceedings.

In response to the fee regime, we have seen our employment related claims costs increase between 10 and 12% and claims volumes decrease by just over 11% in the period following the introduction of the fees. However, with this decision by the Supreme Court, we anticipate the claims volumes will return to pre-2013 levels.

We also expect to see a rise in the commercial defence cases as a knock-on effect and this is where the benefits of our Commercial LEI policy will step in and provide employment defence cover for the businesses having claims brought against them.

It is estimated that the government will need to repay up to £32 million to claimants, but information on the mechanism for recovering is yet to be confirmed. Customers who didn’t bring a claim to court as they couldn’t afford the fees are also anticipated to bring these claims forward, despite being outside of the required timescales. It is suggested that insurers will be expected to accept these claims due to the new ruling.

For further information on the fees, please contact your Account Manager.

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