ET fees: ‘full and careful’ consideration of the evidence

So, now we know. Brexit means Brexit, and ‘in due course’ means, well, in due course. And, thanks to a parliamentary question by Labour MP Dawn Butler, we also know that the government’s review of employment tribunal (ET) fees has been ongoing for 17 months because “it is important that full and careful consideration is given to all the relevant evidence”. Say what you like, but there are no cobwebs at the Ministry of Injustice.

But what exactly is this ‘relevant evidence’? How long has the Ministry had it? What does it tell us? Is there more such evidence to come? And what is the point of Liz Truss?

In this post, I will try to answer (most of) these questions.

First, a few essential facts. The justice-denying ET fees of up to £1,200 were introduced on 29 July 2013. And Liz Truss, believe it or not, is Lord Chancellor and Secretary of State for Justice. Far more than the fact that we import two-thirds of our cheese, that is a disgrace.

The relevant evidence (1): the impact of fees

Impact of fees: the number of ET claims/cases

As noted many, many times by any number of commentators, including yours truly, and as is abundantly clear from the following chart, the impact of the fees on overall ET claim/case numbers was sudden, substantial and sustained.

etcases1116

Moreover, the pattern is damn near the same for each and every ET jurisdiction (e.g. unfair dismissal) – see, for example, charts 5, 6, 7, 8, 9 and 10 here.

Which means that, in terms of the impact of the fees on case numbers, the Ministry has had all the evidence it needs since long before it finally launched its interminable review, after much prevarication, in June 2015. Indeed, for measuring the impact of the fees on case numbers, the key period is September 2013 to February 2014 – that is, the six months immediately after the introduction of fees, and immediately before the introduction in April 2014 of Acas early conciliation (see below), which has had its own, much less dramatic, impact on ET claim/case numbers. (NB: we can ignore March 2014, due to there being a pre-Acas EC spike, just as there was a pre-fees spike in July 2013).

Comparing that six-month period with the six months immediately before the introduction of fees (i.e. January to June 2013), the overall number of single claims/cases fell by 63%. Sex discrimination claims fell by 87%, equal pay claims by 88%, and unfair dismissal claims by 65%. And it doesn’t matter how much more ‘full and careful consideration’ the Ministry gives to this evidence – those figures ain’t gonna change.

Impact of fees: changes in the nature and quality of claims/cases

While the evidence of the impact of the fees on claim/case numbers is both indisputable and increasingly aged, there is also a growing body of evidence that the introduction of fees has changed both the nature and the quality of claims/cases – and not in a good way.

Most importantly, there is a range of evidence – both anecdotal evidence from employment law practitioners and ET judges, and hard statistical evidence – that the fees have impacted most, as one would expect, on relatively simple, low-value claims, such as those relating to the non-payment of wages and/or holiday pay (aka ‘wage theft’). According to paragraph 35 of the Ministry’s December 2011 consultation on its then proposed fees, in 2010/11 the majority of ET claims (62%) fell into this category. But, according to the latest set of official figures (see Table ETF.1), in 2015/16 only 24% of the issue fees requested from claimants were in relation to such Type A claims (as opposed to the more complex, Type B claims for e.g. unfair dismissal or discrimination). And, of course, that’s 24% of a much smaller number.

Those relatively simple, low-value claims tended to have a high success rate – the (rogue) employer was usually bang to rights, often not contesting the claim (which accordingly resulted in a default judgment). And the near eradication of such claims by fees – why would you pay £390 in fees to chase unpaid wages of, say, £500? – no doubt partly explains why the ‘success’ rate (as narrowly defined) has fallen, and the wider ‘failure’ rate has risen, markedly, since July 2013 (see charts 2 and 3 here).

We can see further evidence of these changes in the nature and quality of claims/cases in an emergent but seemingly marked increase in the median value of ET awards, and in the very low incidence to date of both s16 penalties (for aggravated breaches of the claimant’s rights) and s150 penalties (for non-payment of an ET award).

As I say, some of this evidence is still emerging. But the direction of travel is as clear as it is regrettable, so waiting another six, 12 or 18 months wouldn’t make any difference to an objective assessment of the impact of the fees regime. Six months from now, there will be a lot more evidence that a racist, misogynistic narcissist won the recent US presidential election. But I think we have more than enough evidence to make that assessment now.

The relevant evidence (2): mitigating factors

Other factors in the fall in claim/case numbers

In seeking to deny the above-illustrated impact of the fees on ET case numbers from July 2013, ministers have cited an “historic downward trend” in those numbers, as well as improving economic conditions (including record levels of employment). And, as we can see from the following chart, in 2o11, 2012 and 2013, there was indeed a (relatively mild) decline from the 2008 crash-induced peak in 2009/10, back towards the level seen in the relatively stable plateau of the mid-2000s.

etannual1116

However, there is no reason to think that even that mild rate of decline would have continued in 2014 and beyond (let alone that it would have accelerated). By 2012/13, the last full year before fees, case numbers were almost back to the record lows of 2004/05 and 2005/06. And the record levels of employment in recent years might well imply an upward trend in ET cases, in some jurisdictions at least. So it seems much more realistic to assume that the overall mild “historic downward trend” would have gradually petered out. And, indeed, we can see (from the first chart, above) that there has in fact been no decline in actual case numbers since mid-2014.

On this basis, we can create the following projection for the number of ET single claims/cases, had both fees and Acas early conciliation (but see below) not been introduced. (NB: the eight columns for 2008/09 and 2009/10 on the far left look odd because they are averages of the annual total, as the quarterly figures are not available).

etproj1116According to this projection, by the end of June 2016 (i.e. the end of Q1 of 2016/17), almost 90,000 single ET claims/cases had been ‘lost’ to fees. And, as that figure increases by some 8,000 every quarter, at the time of writing it is over 100,000.

The Ministry of Injustice might quibble with the details of the above projection, but it can’t credibly argue for a significantly lower one. And, even if it does, the key point is that the picture hasn’t changed, significantly, since before the Ministry launched its review 17 months ago, in June 2015. Nor will it change, going forward – we will just be able to add more columns on the right that look pretty much like that for every quarter since Q2 of 2014/15. So, again, giving this evidence further ‘full and careful consideration’ isn’t going to lead to any different conclusions. It just wastes more time.

Acas early conciliation

However, there is another, far more significant mitigating factor: the introduction, from April 2014, of Acas early conciliation. As noted previously on this blog, ministers have made a great deal of noise about this mitigating factor. And, yes, we do have to lay on top of the chart above the some 4,000 potential ET single cases that Acas successfully conciliates – for free – each quarter, as follows:

etprojacas1116

That reduces the above figure of 100,000 ET single claims/cases ‘lost’ to fees, to just under 60,000, as of the end of June 2016, and more than 65,000 at the time of writing.

As noted previously, it is debatable whether we can offset all of those successful early conciliations (single cases) against the number of single claims/cases ‘lost’ to fees, as it is less than certain that all are conciliations of a ‘dispute’ that, had it not been for the introduction of fees, would have resulted in an ET claim/case. But it’s difficult to see how this might be nailed down either way. So, again, the key point here – am I boring you? – is that the picture has not changed significantly since before the Ministry launched its bloody review, in June 2015. Even after allowing for the (beneficial) impact of Acas early conciliation, we are still missing more than 65,000 ET single claims/cases, and that figure increases by some 4,000 every quarter. Waiting another six, 12 or 18 months won’t throw any further light on the matter.

Some ministers have suggested that we don’t need to worry about these ‘lost’ ET claims/cases, because they are all vexatious or otherwise weak claims that should never have been brought in the first place. This is known as the Hancock Theorem. But there is simply no evidence for the Hancock Theorem that the Ministry could give ‘full and careful’ consideration to, there never has been, and there never will be. It’s just a belief.

Conclusion

I could go on, but if you’ve made it this far you are probably losing the will to live. I know I am. The key point [Haven’t you said this already? Ed] is that the Ministry has had all the evidence it needs to come to some conclusions, and to make a decision about what to do, since before it launched its review in June 2015. It’s taken me a couple of hours, spread over a few days, to write this blog (I’m a slow writer, and the day job takes up a lot of time, as do the kids). The Ministry has seemingly had a team of top-notch officials working full-time on the matter for 17 months. What the **** do they do all day? And how do ministers expect to successfully negotiate Brexit if they can’t nail a simple little matter like this?

No doubt someone in government is giving full and careful consideration to that question. Let’s just hope it’s not Liz Truss.

 

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ET fees: Ministry of Justice keeps us in the dark

Q: How many Ministry of Justice ministers does it take to change a lightbulb?

A: The Ministry’s plan for changing the lightbulb will be published in due course.

Yep, when it comes to its internal review of the justice-denying employment tribunal fees introduced in July 2013, the Ministry of Justice sure likes keeping us in the dark. Finally launched on 11 June 2015, some 14 months after Coalition (well, Liberal Democrat) ministers first started using the review as a fig leaf by suggesting it was just around the corner, the review team had produced a report by early last October. However, 12 months on, that report is still sitting on ministers’ desks, despite the then junior minister, Dominic Raab, telling MPs as long ago as 4 July that he anticipated publishing it “in the near future”. And, by mid-September, ‘in the near future’ had regressed to “in due course”.

In recent weeks, I’d started to wonder whether ‘in the near future’ and ‘in due course’ actually mean ‘not before the Supreme Court has heard Unison’s appeal in its twice-rejected judicial review challenge, on 7 and 8 December’. In other words, it’s all Adam Creme’s fault. But then we learnt that the Supreme Court hearing dates have slipped back to 27 and 28 March next year. And the Ministry surely can’t stretch the definition of ‘in the near future’ to ‘nine months from now’? Or can it?

Time will tell, but with memories of the damning criticism of the fees regime by both the Justice and the Women & Equalities committees of MPs – as well as by a whole load of the kind of person Michael Gove says we’ve all had enough of – becoming dimmer with every passing week, here is a summary of the options for the Ministry, and the associated issues its review report will need to address if it is to have any credibility at all.

Option 1: Abolish the fees

This would make a lot of employment lawyers (and judges) very happy, but it seems somewhat unlikely, and the omens are not good. For outright abolition would come with a price tag of some £20 million per year – £8 million or so in lost fee income, and up to £15 million in increased operational costs (due to the inevitable rise in claim/case numbers). And, as noted previously on this blog, that’s £20 million that the Ministry would appear not to have. It is presumably for this reason that, just last month, the Ministry confirmed it is to press ahead with indefensible increases of up to 500% in immigration & asylum tribunal fees.

Option 2: Reform the fees regime

This would be the sensible option. As I have demonstrated previously, much if not all of the above £20 million could be covered by a combination of (much) reduced fees for claimants, the introduction of (equally modest) fees for respondent employers to defend a claim/case, and a (more substantial) ‘polluter-pays’ financial penalty for employers found by a tribunal to have breached the claimant’s rights. Yes, there might be some (unjustified) squeals from the employer lobby groups, but with the availability of (free) early conciliation by Acas there is no good reason why an employer should not pay a nominal fee to defend a tribunal claim, and even the British Chambers of Commerce has previously accepted that, if claimants have to pay (even nominal) fees, it is only “fair” for losing employers to have to pay “an analogous administration fee to the Treasury”.

However, justice secretary Liz Truss has so far given little indication that she wishes to develop a reputation for being sensible.

Option 3: Do nothing.

The prevarication and delay in concluding the Ministry’s internal review would suggest this is the option favoured by ministers, and that they simply want Unison’s pesky judicial review safely out of the way before they break this policy wonk’s heart. However, if they are not to leave prime minister Theresa May’s (loudly proclaimed) commitment to greater equality – including in the workplace – looking just a tad hollow and cynical, they will need to try and explain away the loss to fees of more than 60,000 single ET cases alone since July 2013, and in particular the loss of cases involving a claim for discrimination. (And yes, since you ask, that figure is based on a projection that takes into account the mild, pre-existing downward trend in case numbers, as well as the improving economy, global warming, and changes in the price of fish).

etacassept16

That figure increases by some 4,000 with every passing quarter, even if we assume – and it’s a highly questionable assumption – that every single one of the 4,000 or so single cases successfully resolved by Acas early conciliation each quarter would otherwise have resulted in a tribunal claim. For, as Acas’ early conciliation caseload far exceeds the number of ET cases we could expect, had fees not been introduced, it seems more likely that at least some of those early conciliations are of ‘disputes’ that would never have gone to tribunal in any event.

In short, the existence of Acas early conciliation does not get ministers off the hook. And there’s absolutely no evidence to support the contention of the Daily Mail, the Daily Express and Matthew Hancock MP that all the ET cases ‘lost’ to fees are simply weak or unfounded cases that should never have been brought in the first place.

If they go for this option, ministers will also need to explain why they are content for their fees to impact most on relatively low-paid, often vulnerable workers subject to the kind of employer abuses covered by the lower level (Type A) fees, such as the non-payment of wages (i.e. wage theft) or holiday pay. According to the Ministry of Justice, in 2010/11 the majority of ET claims (62%) fell into this category. But in 2015/16 only 24% of issue fees requested from claimants were in relation to Type A claims.

But who thinks Theresa May’s stated commitment to greater equality is genuine?

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ET costs awards: what’s been going on?

Rooting around in the latest set of quarterly ET statistics in the hope of finding something of interest – other than the emergent upward trend in median ET awards highlighted in my previous post – I was somewhat taken aback by Table E12 of the annual ET tables, on costs awards. For, as the following chart shows, in the past two years the long-standing imbalance between the number of costs awards made to respondent employers (the orange line), and the number made to claimants (the blue line), has reversed.

In each of the four years 2007/08 to 2010/11, there were about three times as many awards to respondent employers as there were to claimants, and by 2012/13 that ratio had risen to 4:1. But since 2013/14 the number of awards to respondent employers has plummeted, while the number of awards to claimants has risen sharply. And I am at a complete loss as to why that has happened.

costsawards[NB: I have adjusted the figure given in Table E12 for the number of awards made to respondent employers in 2011/12, as that figure (1,294) includes 800 awards arising from one multiple-claimant case in which the 800 claimants were all made liable for a costs award of £4,000 to the respondent, i.e. £5.00 per claimant. I have counted that as just one award, reducing 1,294 to 495, but I don’t think that introduces any relevant distortion.]

Can anyone out there explain what’s been going on? Am I just being even dumber than normal? I imagine the parallel fall in 2015/16 reflects the overall reduction in the ET system’s workload, due to ET fees and Acas early conciliation. But why the (pretty dramatic) switch-around?

Update (23 September): So, barrister Jamie Anderson was first (on Twitter, last night) to suggest what looks to me to be the explanation, closely followed by Sophie Park (see comments, below): the data for costs awards to claimants from 2013/14 onwards includes orders made under Regulation 76(4) of the 2013 Regulations in respect of the repayment of fees, as well as standard costs awards made under Regulation 76(1). Which is a bit silly, really, and maybe someone could suggest, at the next ET User Group meeting, that such orders/awards be recorded separately from standard costs awards.

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ET awards: looks like we’ve got us a trend thingy

Six months ago, I noted on this blog that, in 2014/15, there had been a marked increase in the median awards for unfair dismissal or discrimination (the only jurisdictions for which the lackadaisical HMCTS bothers to record the relevant data). And I suggested that this might be the beginning of a sharply upward trend, due to the justice-denying fees introduced in July 2013 having eliminated many lower value unfair dismissal and discrimination claims.

Well, this week we got the figures for 2015/16, in amongst the latest set of quarterly ET statistics, for Q1 of 2016/17. And, as the following chart shows, we do appear to have what Sean Jones QC would call a trend thingy.

etawardssept16

I have left out Age, Religious and Sexual Orientation discrimination, for the simple reason that the number of awards in those jurisdictions has always been very small. For example, the median award for Age discrimination did increase, from £7,500 in 2014/15 to £8,417 in 2015/16, but there were only four such awards in 2015/16. Similarly, the median award for Religious discrimination increased from £1,080 in 2014/15, to £16,174 in 2015/16, but there was just one such award in 2014/15, and only four in 2015/16. With such small numbers, the median award is prone to significant variation in any case.

And, as the following charts show, the upward trend in the median award is indeed married to a sharply downward trend in the number of awards – reflecting the sharp fall in the number of claims following the introduction of fees in July 2013 (as well as the introduction of Acas early conciliation in April 2014).

etawardsud

etawardssexdiscetawardsraceIf you’re reading this and you’re a junior minister at the Ministry of Injustice, you are no doubt thinking, ‘ah, but lots of people are now getting their claim for unfair dismissal or discrimination resolved by Acas, for free!’. Which is true, to some extent at least. But, crucially, while the quarterly ET statistics have always told us the number and outcome of claims in each jurisdiction, the quarterly Early Conciliation statistics issued by Acas are not broken down by jurisdiction. So it’s hard to know to what extent Early Conciliation by Acas is successfully mopping up the lower value unfair dismissal and discrimination claims and awards lost to fees.

Now that Early Conciliation by Acas plays such a significant part in the ’employment dispute resolution’ system, that is a serious shortcoming that Acas needs to fix.

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Enforcement of the NMW – a fair sport?

Earlier this month, the newly re-named Department for Business, Energy & Industrial Strategy (BEIS, formerly BIS) named & shamed another batch of 197 NMW rogues. With six months having passed since the last batch, in early February, BEIS was able to hype this one as “the largest ever list of NMW offenders”, but the length of the list merely served to highlight the relatively small sums owed by all but a handful of the 197, who between them owed a combined total of £465,290 in NMW arrears to 2,166 workers.

Among the usual mix of hairdressers/beauty salons (27), bars, restaurants, cafes and hotels (25), car dealers/motor garages (15), and childcare providers (12), only 85 employers owed more than £1,000 of arrears, and 131 (66%) had underpaid only one worker. The median sum owed was just £759.32, 80 employers owed less than £500 of arrears in total, and only 12 had underpaid more than 25 workers. The four ‘worst’ offenders – including the high-end San Lorenzo Wimbledon restaurant and the Regis chain of hair & beauty salons – accounted for 37% of the total arrears owed, and for 49% of the 2,166 unpaid workers.

Indeed, perhaps the most newsworthy aspect of the list – overlooked by most if not all journalists, as far as I can tell – is that it included no fewer than 24 social care employers, ten more than BIS had managed to include among the 490 NMW rogues named & shamed in all previous batches since the re-booting of the scheme in October 2013. However, most of the 24 appear to be small fry, with 15 having underpaid fewer than four workers and 18 owing less than £2,500 in total. But at least ‘social care’ – a sector in respect of which HMRC has long appeared to have a bit of a blind spot – has moved a little towards the left of this updated ‘chart of the meanies, by sector’.

NMWnamingsectorsAug16

With the re-booted scheme in force for almost three years now, and almost 700 NMW-breaching employers named & shamed, it is also interesting – well, it is if you’re a nerd like me – to look at breakdowns by sector of (a) the arrears owed, and (b) the number of workers to whom arrears were owed. NB: for the following ‘arrears owed’ chart, I have excluded the extraordinary sum of £1,742,655.56 owed by security firm TSS Ltd, and for the ‘workers covered’ chart I have excluded both the 2,519 TSS Ltd security workers and the 2,895 hospitality workers to whom the Arta bar/club/restaurant in Glasgow somehow managed to underpay a total sum of £45,124.00 (an average of just £15.59 per worker).

NMWarrears

 

NMWworkers

However, even with the exclusion of the TSS Ltd security workers and the Arta hospitality workers, the ‘workers covered’ chart paints a slightly false picture. For example, all but 125 of the 3,071 retail workers were employed by four NMW-breaching retailers: Monsoon Accessorize (1,438 workers), Foot Locker (601), H&M (540), and French Connection UK (367). Of the other 65 retail sector employers, 48 (74 per cent) owed arrears to just one worker, and all but six owed arrears to fewer than five workers. Similarly, 604 of the 818 hairdresser/beauty salon workers were employed by one employer: the national chain Regis UK Ltd. And, of the other 118 hairdressers/beauty salons, 73 (62 per cent) owed arrears to just one worker, and a further 28 (24 per cent) owed arrears to just two workers.

Between them, those 118 hairdressers/beauty salons owed total arrears of £226,831.77 to 214 workers (an average of £1,060 to each worker). And, on average, each of those 118 mostly small, low-profitability businesses owed total arrears of £1,922. Which means that, roughly speaking, each would also have been required to pay, in addition to those arrears, a financial penalty to HM Government of £1,922 (see sections 3.7 and 3.8 of this July 2016 explanation of NMW enforcement policy). The 92 NMW-breaching employers named & shamed in February, for example, were required to pay a combined total of “over £629,000” in financial penalties (some £6,800 each, on average, but note that the 92 included the above-mentioned TSS Ltd and their arrears of £1.74 million).

OK, a penalty of some £2,000 might not sound very much, but £2,000 is in fact a not insignificant sum to a small business such as a local hairdresser/beauty salon (even if the penalty is discounted by 50 per cent for prompt payment, i.e. within 14 days).

So, if I was the owner/manager of one of those 118 small businesses, I might well be wondering whether the highly profitable Sports Direct is going to be required to pay a financial penalty of some £1 million after striking an apparent deal with HMRC and the union Unite to pay some £1 million of NMW arrears to “thousands” of its warehouse workers. (The current penalty rate is 200 per cent of the total arrears owed, but that only applies to underpayments made since 1 April this year. For underpayments made between 7 March 2014 and 1 April 2016, the penalty rate is 100 per cent, and for underpayments made prior to 7 March 2014 it is 50 per cent).

As the Guardian’s economics editor, Larry Elliott, noted on the day the story broke:

“There appears to be no reason for clemency. The government seems quite happy to name and shame little known companies for relatively modest sums, and this was no minor infraction. Sports Direct’s flouting of minimum wage legislation had been going on for four years” … and … “Sports Direct is a prime example of how companies can use employment agencies to avoid giving what are effectively full-time staff members the rights which they are legally due. Employees are too frightened to make a fuss for fear that they will not get any more work.”

Time will tell, but – as noted previously on this blog – HMRC does appear to have quietly introduced a questionable practice of allowing some NMW-breaching employers to ‘self-correct’ and pay the arrears owed without being issued with a Notice of Underpayment, thereby evading both naming & shaming, and – more importantly – the imposition of a financial penalty.

In 2015/16, according to the answers given by BIS (now BEIS) to a series of parliamentary questions, 60 employers took advantage of an effective amnesty (announced in July 2015) to “voluntarily disclose [total] arrears of £786,038 owed to 4,869 workers”, without being issued with a financial penalty or named & shamed, and a further 85 employers were able to ‘self-correct’, also without being issued with a Notice of Underpayment, so were not issued with a financial penalty and will not be named & shamed. And BIS/BEIS seems reluctant to say how much was owed by those 85 employers, and to how many workers – a parliamentary question tabled on 3 June has gone unanswered, despite a chasing question.

Yet, over the year, the total arrears ‘recovered’ by HMRC leapt from an average of £3.9m in previous years, to a remarkable £10.3m. The suspicion has to be that those 85 unnamed, non-shamed and, most importantly, financial penalty-evading NMW rogues were responsible for much of that otherwise astonishing increase.

Is Sports Direct also being allowed to ‘self-correct’, and so evade a financial penalty of some £1 million? We should be told.

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What does the appointment of Liz Truss as justice secretary mean for the MoJ review of employment tribunal fees?

I’m sorry I haven’t a clue.

Update (19 July): However, with the enforced departure from the MoJ this week of both slow-reading junior injustice minister Shailesh Vara and slightly less junior injustice minister Dominic Raab – who appeared to have taken over responsibility for the much-delayed ET fees review from the hapless Vara in recent weeks – there must be some doubt as to whether we will see the long-awaited review report any day soon. For, if the report recommends reform of the fees regime, then at least someone in the new ministerial team is going to be asked to sign-off on the associated financial hit to the catastrophically cash-strapped Ministry. And, if it doesn’t, someone’s going to want to read themselves in before going out to absorb the inevitable political and media heat.

In the meantime, I remain available to any new minister who’d like to learn how to square this tricky circle by reforming the fees regime on a cost-neutral basis. Unlike those introduced by the Ministry in July 2013, my fees are very reasonable.

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Justice by Committee

No, it wasn’t the report we #ukemplaw nerds have been holding our breath for. We are still waiting for the Ministry of Justice’s report of its post-implementation review of the justice-denying employment tribunal (ET) fees introduced in July 2013. But on 20 June, at the start of a quiet news week, the Justice Committee of MPs finally published the report of its own inquiry, launched last year, into the impact of the fees.

Given what was happening later in the week, plus the fact that Parliament was in recess at the time, I do find myself wondering whether at least some members of the Committee were hoping the report would pass largely unnoticed by the mainstream media. Whatever, the Committee’s conclusions and recommendations are commendably pithy. I particularly enjoyed their barbed comments on the laughably poor oral evidence of injustice minister Shailesh Vara, and his meaningless obsession with the figure of 83,000 early conciliation cases handled by Acas:

In coming to a judgement about the impact on access to justice of employment tribunal fees, we consider, on the weight of the evidence given to us, that Mr Vara’s heavy reliance on the figure of 83,000 cases dealt with at Acas early conciliation to support his contention that access to justice has not been adversely affected by employment tribunal fees was, even on the most favourable construction, superficial. Those cases cannot be simplistically assumed to represent displaced cases which were settled satisfactorily otherwise than by being taken to tribunal.

The Committee also notes what it politely calls “inconsistencies” in the hapless Vara’s account of progress with the Ministry’s internal, post-implementation review, the report of which landed on Vara’s desk as long ago as last October: “It is difficult to see how a Minister can urge his officials to progress a review which they apparently submitted to him four months or more previously.” Furthermore:

“There is a troubling contrast between the speed with which the government has brought forward successive proposals for higher fees, and its tardiness in completing an assessment of the impact of the most controversial change it has made. We find it unacceptable that the Government has not reported the results of its review one year after it began and six months after the government said it would be completed.”

Ouch. And, on the impact of the fees on access to justice, the Committee is equally clear:

“The arguments presented to us by the Government in this inquiry, limited as they are, have not swayed us from our conclusion, on the evidence, that the regime of employment tribunal fees has had a significant adverse impact on access to justice for meritorious claims.”

In a statement accompanying the report, the Committee’s chair, Bob Neill MP, added:

“The Ministry of Justice has argued that changes to employment law and the improving economic situation, as well as the pre-existing downward trend in the number of employment tribunal cases being brought, may account for part of the reduction in the number of cases. These may indeed be factors but the timing and scale of the reduction following immediately from the introduction of fees can leave no doubt that the clear majority of the decline is attributable to fees.”

In calling for the fees to be “substantially reduced” as well as for reform of the fee remission system, the Committee recognises that this “would have cost implications for the Ministry of Justice”. However, the Committee stresses – repeatedly – that “if there were to be a binary choice between income from fees and preservation of access to justice”, then “the latter must prevail as a matter of broader public policy”.

All good stuff, then, and the Committee’s members and chair, Bob Neill, deserve praise for their work. That said, I would have liked to have seen a bit more analysis by the Committee of the Government’s arguments to date, and especially the role that Acas early conciliation is now playing in the resolution of potential ET claims. As the following chart shows, about half of the single ET claims ‘lost’ to fees are now successfully resolved through early conciliation. And, of course, not all of the other half would have been successful (at a hearing or default judgment) or satisfactorily settled.

missingJune16This lack of analysis in the Committee’s report was replicated in this week’s debate in the House of Commons, which focused on the Committee’s report but which, technically, was on a motion to approve the remaining £4bn of the Ministry’s £7bn budget for 2016-17 that it hasn’t yet had from the Treasury. (By convention, such ‘Estimate Day’ motions are not put to a vote, but – seemingly under pressure from backbench ‘rebels such as Chuka Umunna – Labour’s front-bench eventually decided to vote against the motion).

It is probably significant that, in his contribution to the debate, justice minister Dominic Raab – who has taken over responsibility for this matter from the hapless Shailesh Vara, and is perhaps most famous for having once been the Foreign Office’s in-house expert on “the international law of outer space” – noted that “there has been virtually no mention of [Acas early conciliation] in this debate”. My guess is there will will be quite a lot about early conciliation in the Ministry’s much-delayed post-implementation review report. Indeed, the emerging evidence on early conciliation may well explain much of the delay.

As for when we might get to read that report, Raab told MPs that “the review is very close to completion, so I hope to be able to make an announcement in the near future”. Which, who knows, might well mean ‘on Wednesday, when everyone is looking the other way’.

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