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Employment tribunal refund scheme now fully open

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By ACAS

Government invites applications from claimants and employers, but questions remain over reintroduction of fees

Applications for refunds of employment tribunal fees are now being processed, the Ministry of Justice has announced, paving the way for millions of pounds to be repaid to claimants and, in some cases, to employers.

From today (20 November), anyone who paid tribunal fees when they were charged between July 2013 and July 2017 can apply for a refund via the gov.uk website.

The news follows a four-week trial phase in which 1,000 claimants were specifically contacted by the government and encouraged to request refunds. It has been estimated that 100,000 claims could be eligible for reimbursement now the scheme is fully open, and that up to £27m could ultimately be repaid to claimants.

The repayment scheme was introduced in response to a Supreme Court decision, which found that the government’s employment tribunal fee regime, which required claimants to pay up to £1,200 to have their claim heard, was unlawful.

The court ruled that tribunal fees were obstructing access to justice, were indirectly discriminatory to women and were incompatible with aspects of EU law.

The refund scheme was announced last month by justice minister Dominic Raab. He said employers that had been ordered to reimburse a claimant’s fees would be entitled to a refund, provided they could prove they had paid the fee.

“The refund scheme is to be welcomed,” said Jonathan Rennie, partner at law firm TLT. “While there may be some administrative complexity, it is a reinstatement decision that puts parties back in the position they ought to have been originally.”

Anyone who paid the fees can apply to be reimbursed using one of three forms, depending on the circumstances of their case. Applicants can either use the online system or submit their claim by post or email. Those who are successful will have the fees refunded to their bank account, with 0.5 per cent interest added.

The news is an important step in resolving the fallout from the tribunal fees regime, which proved one of the most divisive employment-related legislative decisions in modern history. Fees caused the number of cases to plummet by up to 70 per cent, according to estimates, but critics said rogue employers were given licence to ride roughshod over staff, knowing they would not be able to afford access to justice. Others believed tribunal fees were a significant deterrent to vexatious claims.

But significant questions remain, not least whether fees will be reintroduced in a different form. The Supreme Court judgment said fees could, in principle, be justified as a means of “securing access to justice”.

This idea was picked up by lord chancellor David Lidington during a justice select committee meeting last month. He confirmed that the government was still intending to charge a fee, but it needed to be careful to ensure tribunals were still accessible and affordable.

“At a fringe event at the Conservative Party conference, Dominic Raab, the minister of state for justice, said that the Supreme Court had made a case for court fees and he affirmed the principle of ‘user pays’,” said Paul McFarlane, partner at Weightmans. “However, given the arithmetic in parliament, and the fact the government has lots of other issues to deal with, I would be very surprised if it sought to reintroduce this highly contentious issue anytime soon.”

Since the removal of the charges, legal experts have reported that the number of employment tribunal claims is beginning to increase.

“Anecdotally, I’m hearing of increases of between 50 per cent and 100 per cent in different regions,” said Daniel Barnett, barrister at Outer Temple Chambers. “The number of claims will never get back to the pre-2013 level, because there were three factors that reduced the number of claims.

“First, the introduction of fees. Second, the increase in the unfair dismissal qualifying period from one year to two. Third, the introduction of mandatory Acas Early Conciliation. All three combined to reduce the number of claims, although fees had by far the biggest impact.”

Rennie added: “The interesting part of the refund scheme and the fees abolition decision is the question of what happens for those hypothetical litigants who will no doubt come forward and say that they would have raised a claim but for the fees system, and that they have suffered the lost opportunity of raising a claim.

“Our expectation is that there may well be further litigation on this ‘lost opportunity’ principle, and that may lead to further questions as to whether formally historic claims can be reactivated outside of the usual time limits for a claim – and/or who would then be liable for any compensation for such lost opportunity, and how that is assessed.”