‘This “triumph for access to justice” will not be welcomed by all’. So declared Supreme Court judge, Lord Reed, on ruling unanimously in favour of Unison, following their appeal against the legality of the system of employment tribunal fees on July 26 2017. At that time, The Institute of Directors warned that the decision would ‘open the door to a spike in malicious or vexatious claims’. Almost eight years later, we can see how the concerns expressed at the time played out.
Employment tribunal fees had been introduced in 2013 and abolished four years later in July 2017, so this can be tracked against a review of the Early Conciliation notifications that ACAS received across this period:
| 1 April 2012 to 31 March 2013 | 191,514 |
| 1 April 2013 to 31 March 2014 | 61,308 |
| 1 April 2014 to 31 March 2015 | 83,423 |
| 1 April 2015 to 31 March 2016 | 92,172 |
| 1 April 2016 to 31 March 2017 | 92,251 |
| 1 April 2017 to 31 March 2018 | 109,685 |
| 1 April 2018 to 31 March 2019 | 132,711 |
| 1 April 2019 to 31 March 2020 | 138,837 |
| 1 April 2020 to 31 March 2021 | 114,533 |
| 1 April 2021 to 31 March 2022 | 90,811 |
| 1 April 2022 to 31 March 2023 | 105,754 |
| 1 April 2023 to 31 March 2024 | 104,884 |
The impact that the change to the fee regime had on the volumes seems to be clear, with an immediate rise in cases. We can also map the impact of Covid, which arguably created more tension and reaction in the Management Liability market than the fee structure change ever did. Expectations of a ‘tsunami’ of claims never materialised and in recent years numbers have settled down at volumes lower than anticipated.
The expected reintroduction of tribunal fees (albeit nominal at the reported level of £55) evaporated with the change in government in July 2024. The early indications are that the 2024/2025 figures will rise, with the latest statistics (for the quarter April to June 2024) showing an increase in the volume of claims of 20% when compared with the same period in the previous year. There will also be an inevitable rise when The Employment Rights Bill passes into law, aiming to significantly enhance employment rights in the UK and, according to some sources, creating an ‘adventure playground for employment lawyers’. This brings with it an increase in workplace legislation and employee rights on a scale not seen since the 1970’s. For any business, with any number of employees, there will be many new legal points to consider. Whether hiring, managing or firing, there will be more things to do to stay within the law and more pitfalls to avoid. That, in turn, inevitably means more mistakes will be made and the consequences of those will need to be faced. Even if mistakes are not made, the rise in employee rights will mean a rise in Employment Tribunal caseloads.
As well as having good controls, Employment Practices Insurance remains an important part of the defence strategy against employment claims. There may not have been a better time to review this for organisations than right now.
