The Supreme Court has ruled that fees imposed for those bringing employment tribunal claims are 'unlawful' in a groundbreaking case.
The government introduced the fees in 2013 with the aim of reducing the number of malicious and weak cases, which led to a 79 per cent reduction over three years.
However, campaigners argued that the fees prevented workers from getting access to justice, with the Supreme Court ruling that the governemnt was acting 'unlawfully and unconstitutionally' when the fees were introduced. The government is now expected to have to pay back close to £30 million in fees.
The decision has raised fears among business leaders with some predicting a fresh influx of spurious and unfounded claims against employers with claimaints no longer having any financial risking in bringing a claim.
Lord Reed, the justice handing down the court’s ruling said the justices concluded the fees “have resulted in such a substantial and sustained fall in the number of claims being brought that it points to the conclusion that a significant number of people have found the fees unaffordable.”
Philip Richardson, Head of Employment Law at Stephensons, said: "Prior to 2013, we had a system that was widely criticised for being unbalanced in favour of the claimant – the employee – who was bringing a case against his or her employer. The absence of any fees rewarded those who might have had speculative or even baseless claims because there was no financial risk to dissuade such people from bringing a case to tribunal.
“Equally, after the fees reforms, we had a system that was widely criticised for being unbalanced in favour or the employer, with the costs involved in bringing a case being prohibitive to genuine claimants who were unable or unwilling to risk their own money; particularly when the companies responding would have greater financial wherewithal to get professional legal representation.
“This morning’s decision throws the whole system into doubt and it remains to be seen what steps will be taken to provide certainty in the coming days.
“In my view, what is needed is new approach that is fair to both claimants and respondents. This decision is a rare opportunity for those in a position of power to take stock of the failings of past fees regimes and set out a reasonable solution for all concerned.”