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Employment Tribunal fees - refunds begin

24 October 2017

After an unexpectedly lengthy wait, the Government has launched the first stage of its scheme for refunding Employment Tribunal (“ET”) fees following the Supreme Court’s decision that the fees system was unlawful.

Background

On 26 July 2017, the Supreme Court ruled that the system for charging fees to bring an ET claim was unlawful. Not only was the requirement to charge a fee to be removed immediately, but all fees already paid by users of the tribunal service since they were first introduced in July 2013 were to be refunded. 

As we commentated at the time, this raised a number of thorny issues. Although there is likely to be a central record of all fees paid by claimants, it is not as simple as just repaying those fees to those individuals. Where a claimant won their case, in most situations the losing employer would be ordered to pay the value of the fees to the claimant as part of a costs award. If all fees are simply paid back to claimants, there would be double recovery in situations where the employer has already been ordered to make that payment. But, the ET cannot simply check its records and refund those fees to the employer instead, as many employers do not actually pay the amounts ordered.

It was also unclear what would happen if fees had been refunded as part of a settlement agreement between the parties. These complications may be part of the reason why the Government’s announcement of the refund scheme, originally expected in early September, has only just been made.

The refund scheme

According to a press release from the Ministry of Justice and HM Courts and Tribunal Service, the first stage of the refund scheme will involve around 1,000 people being contacted individually and given a chance to apply for a refund. This stage will last for four weeks, after which the full refund scheme will be rolled out.

We do not yet have full details about what the final scheme will involve. We know that applicants who successfully apply for a refund will be paid interest at 0.5%, calculated from the date of the original fee payment to the date of the refund. The Government is also working with trade unions who have supported large multiple claims potentially involving hundreds of claimants, presumably to disentangle who is owed which amounts from a large multiple fee. Others who have paid fees but are not one of the initial 1,000 people being contacted are able to register their interest in applying when the full scheme is rolled out, either by email or by post.

A written statement from Justice minister Dominic Raab does give some additional information about the planned full scheme. This confirms that the following people will be able to claim a refund:

  • People who paid a fee directly to the ET or the Employment Appeal Tribunal and have not been reimbursed by their opponent.
  • People who were ordered by the ET to reimburse their opponent and can show they have made that payment.
  • Representatives (such as a trade union) who paid a fee on behalf of another person and have not been reimbursed by that person.
  • The lead claimant or representative in a multiple claim who paid a fee on behalf of other claimants.

Some details of the refund process are also provided. To receive a refund, applicants will be invited to complete an application form, and the details given will be verified against the ET’s records. Where people are unable to provide full details of the fees they paid, or the details do not match, their application will not be refused automatically but may take longer to process. Where a person is claiming for fees that they reimbursed to their opponent, they will be asked to provide a copy of the ET order and proof of payment.

The written statement does make clear, however, that if an employer has reimbursed a claimant under a private settlement agreement, they will not be eligible for a refund. It appears that the claimant will still be able to claim a refund of their original fee in these circumstances. The employer will only be able to reclaim this fee from the claimant if this was expressly provided for in the settlement agreement.

Action points

Employers certainly should be registering their interest now in order to ensure they are contacted promptly when the full scheme is in operation. It would also be sensible to locate the ET’s order and proof of payment, ready for making a refund application when the scheme opens. As well as reimbursement of fees paid to their opponent, some employers may also have paid other types of fees directly – for example, in order to issue a counterclaim or participate in judicial mediation. Those employers should also consider registering their interest now.

In a written answer to a Parliamentary question, the Ministry of Justice has said that the estimated cost of fees refunds, including interest, is £33 million.

 

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