Tribunal Fees in the Supreme Court:
Unison v Lord Chancellor (EHRC intervening)
In perhaps the most important judgment in employment law of the last fifty years, a seven-person Supreme Court has found that the Employment Tribunal and Employment Appeal Tribunal Fees Order 2013 (Fees Order) prevents access to justice and is unlawful.
The immediate consequence is that the Fees Order is quashed, so that as of today fees cease to be payable for claims in the employment tribunal (ET) and appeals to the EAT, and fees paid in the past must be reimbursed. But the judgment is of much wider constitutional significance, underlining the high degree of protection given to access to justice by the common law and clarifying the principles which will be used to scrutinise impediments to that fundamental constitutional right.
The lawfulness of the Fees Order was challenged by UNISON, supported by the interveners, the Equality and Human Rights Commission. UNISON lost in two Divisional Court hearings below, and in the Court of Appeal.
Lord Reed gave the principal judgment with which all other SCJs agree. He first outlined the operation of the Fees Order and empirical evidence relevant to its effect – including the low level of most ET awards, the poor record of enforcement, and the dramatic impact of the Fees Order on the number of claims (and especially on low value claims). After noting that the Order had made a much less significant contribution to tribunal costs than expected, had failed to deter unmeritorious claims, and did not appear to have improved the proportion of cases which had settled through ACAS, Lord Reed turned to the issue which lay at the heart of the case – the importance of the constitutional right of access to the courts, as an essential element of the rule of law.
Lord Reed’s analysis is noteworthy in at least two respects: first, because he begins not with Article 6 EHRC but with the common law; second, because he emphasises that unimpeded access to the courts is a benefit to the public and not just to the parties themselves:
“Without [access to the courts], 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. That is why the courts do not provide a public service like any other”
Contrary to these fundamental principles, the government’s consultation papers had assumed that the justice system was only of value to “users” of the system.
Citing a letter written by a Lord Chancellor “of a previous generation”, Magna Carta, Sir Edward Coke, Blackstone and common law authorities on the rights of every citizen to unimpeded access to the court, Lord Reed concluded that the Fees Order would be unlawful if there was a “real risk” that it would effectively prevent persons from having access to justice. Alternatively, it will be unlawful if the degree of intrusion goes beyond what is justified by the objectives of the relevant provision – a test analogous to the proportionality test under the ECHR.
As to the first principle, Lord Reed concluded that the Fees Order did effectively prevent access to justice. The evidence showed that the fees were not set at a level that everyone could afford. This included: the sharp and sustained drop in the number of claims; the estimate in the recent Review that 10% of claimants did not bring proceedings because they could not afford the fees; and the hypothetical examples presented in evidence by Unison, of how fees impacted on claimants in low to middle incomes. The existence of the exceptional power of remission, which was exercised only about 51 times from July 2015 until December 2016, was no answer to this picture: the problem was systemic.
A number of other factors reinforced this conclusion. The fees were set at a level which rendered it futile or irrational to bring smaller claims. For example, no sensible person would pay a fee of £390 to bring a claim of £500 unless he was virtually certain to succeed, that he would be reimbursed his fees and that the award would be satisfied in full. But success can rarely be guaranteed, and only half of successful claimants receive payment in full. Little wonder that the statistics show that fees deter especially claims for low sums.
Turning to the second principle, Lord Reed concluded that it too was breached: fees were not justified as a necessary intrusion on the right of access to courts. The Government had not produced evidence to show why the fees had been set at the level they had, and had falsely assumed that the higher the fee, the higher the revenue (an assumption which contradicted “elementary economics and plain common sense” because the optimal price depends on the elasticity of demand). Nor had the Government shown that fees met the other objectives for their introduction, such as deterring weak claims. Finally, the Government had also failed to consider the public benefits flowing from the enforcement of rights conferred by Parliament.
Lord Reed supported his analysis of the common law by reference to the EU principles of effectiveness and effective judicial protection, and the case-law on Article 6 ECHR. These two jurisdictions now chime together, and require that any restriction on access to the courts must pursue a legitimate aim and be proportionate to the aim. Here, the Court of Appeal erred in assuming that the only question was whether it was impossible to pay fees in practice. Rather, the Strasbourg case-law showed that other factors were relevant to proportionality, including whether fees were proportionate to the sums at stake. In light of his conclusions based on the common law, Lord Reed considered that the Fees Order also imposed disproportionate restrictions for the purpose of EU law.
It followed, according to Lord Reed, that the Fees Order was unlawful under both domestic and EU law, and “since it had that effect as soon as it was made, it was therefore unlawful ab initio and must be quashed”.
Agreeing with Lord Reed’s analysis of the right of access to a court, Lady Hale also held that the Fees Order was indirectly discriminatory against those with a protected characteristic. The parties accepted that the Fees Order had a disparate impact upon women, so that the question was whether it was justified as a proportionate means of achieving a legitimate aim. Lady Hale, relying on similar reasoning to Lord Reed held that the treatment was not justified.
The short-term consequences of the judgment are that with immediate effect fees are no longer payable for claims before the ET or appeals to the EAT and, in accordance with an undertaking given by the Lord Chancellor to the courts below, all fees which were paid in the past must be reimbursed. The long-term consequence is that the Supreme Court has given the strongest possible endorsement to the fundamental public importance of access to justice, meaning that future restrictions of all kinds (and not just financial barriers) on access to the courts will be subjected to the closest scrutiny in accordance with the principles set out by Lord Reed.
Michael Ford QC, Mark Whitcombe and Spencer Keen were instructed by the Intervener, the Equality and Human Rights Commission (Rosemary Lloyd and Mike Young)
A copy of the judgment is available here.
Read The Guardian’s article by clicking here.
Employment Tribunal, Employment Appeal Tribunal, Fees Order, employment claim, Supreme Court, Lady Hale, Lord Reed, Michael Ford
William Meade (Senior Clerk)