Since the landmark decision handed down by the Supreme Court on 26 July 2017, which found Employment Tribunal fees to be unlawful, we have been waiting for further details and guidance about the administrative arrangements that will apply in relation to applications for re-imbursement of fees that have previously been paid by parties to Employment Tribunal proceedings.

On 20 October 2017, the Government launched an initial phase of a refund scheme which was limited in the first instance to around 1,000 specifically targeted parties who were given the opportunity to apply for a refund of fees, as part of a pilot. That first phase has now been completed and details of the full refund scheme have been published by the Ministry of Justice (MOJ) and Her Majesty’s Courts and Tribunals Service (HMCTS). From 15 November 2017, the refund scheme is available to all eligible parties who are entitled to a re-imbursement of a fee.  It also extends to include those parties who had to reimburse their opponent for a fee that had been paid, pursuant to an Order of the Employment Tribunal. The scheme is also open to sponsors and representatives who paid a fee on behalf of a party and who have not yet been reimbursed.

The scheme does not apply to payments under a Settlement Agreement which may have contained provisions intending to compensate a Claimant for a fee that they may potentially have been going to pay, in the event of pursuing potential Employment Tribunal proceedings. The rationale for this is, seemingly, on the grounds that the potential proceedings were never actually commenced because they were compromised or settled as part of a negotiated agreement.

Those parties that are eligible for a refund are now able to apply either online or by post. The correct application form must be used.  There are three different forms, as follows: –

• Refund Form 1-C is for Claimants.

• Refund Form 2-R is for Respondents.

• Refund Form 3-S is for Sponsors or Representatives who have paid a fee, as well as for lead Claimants in multiple claims.

The refund scheme covers both fees paid in the Employment Tribunal and also in the Employment Appeal Tribunal.  Successful applicants should receive a full refund of the fee that they have paid as well as interest payable at a rate of 0.5%.  Interest will be calculated from the date upon which the fee was originally paid up to the date of the refund.  It is anticipated that payment will generally be paid directly into an applicant’s bank account and the applicant will need to certify that they were not awarded a Costs Order covering the Tribunal fee.  The purpose of this provision is to avoid any refund of a fee to a Claimant who has, in fact, already been compensated, by virtue of the fee having been refunded to them already, by their opponent, pursuant to a Costs Order.  In that scenario, the Respondent is able to apply for a refund of the fee subject to being able to demonstrate that they were ordered to do so, under a Costs Order, and that they did, in fact, subsequently pay it.

Whilst it is anticipated that the refund scheme ought to be fairly straightforward, there may be instances where the process is less straightforward in circumstances where an applicant applied for a remission of the initial Employment Tribunal fee and, in particular, where, for example, a partial remission was granted and there is a gap in records as to how much that remission amounted to. It is understood that there is currently no guidance on how disputes will be resolved in the event of any such problem arising.  Ultimately, if not resolved, this may need an application for judicial review of any decision not to reimburse a fee. This route is potentially problematic because any application for judicial review carries a fee in order to commence that process which may defeat the object or deter a party from pursuing any such issue further.

What still needs to be clarified is what happens where a party whose claim or counterclaim was rejected or dismissed for the non-payment of either an Issue fee or a Hearing fee and who might, in light of the Supreme Court decision, wish to seek to reinstate a claim. The Government’s announcements on 20 October 2017 and 15 November 2017 have only, to date, dealt with refunding fees.  It is understood that HMCTS is intending to write to all affected parties whose claims were rejected on these grounds seeking clarification as to whether the party wish their claim to be reinstated.  The figures, we understand, are in the region of approximately 7,500 such cases.

Another issue that still needs to be addressed is where a party decided not to bring a claim because of the existence of the unlawful fee regime.  It is understood that these cases are likely to be considered judicially, in the same way that a party would seek review of any such decision in the normal course of events. Put simply, it seems unlikely that there will be any special process for parties who now wish to proceed with a claim that they previously decided to abandon or not pursue because of the fee regime. Any such application will, therefore, still need to show that it was not reasonably practicable, at the time, to bring the claim originally and that, thereafter, it has been presented as soon as reasonably practicable. Our advice, therefore, to anyone who wishes to pursue that course of action is that they must take urgent steps to make any such application in order to satisfy this requirement. It is also anticipated that the party will need to evidence that they were genuinely dissuaded from bringing the claim as a direct result of having to pay the relevant fee.

The government estimates the total refund costs, including interest, will amount to £33 million.

On a practical note, there may be some potential side effects of the refund scheme whilst applications are being dealt with, including any of the following possible consequences: –

• The life span of a claim could be longer, due to delays.

• It may take Tribunals longer to deal with interim correspondence and applications.

• Due to tighter resources, Tribunals may consider taking a stricter approach to limiting the length of Hearings or restricting the amount of evidence a party can adduce.

• A potential lack of judicial resources may lead to a short term increase in the number of late postponements of Hearing dates.

• It may take longer for Employment Judges to deliver reserved Judgments or written reasons for Judgments, during the transitional arrangements.

If anyone requires any further guidance or advice in relation to these issues, or seeks assistance in applying for a refund, our employment team will be happy to assist.  Our dedicated team can be contacted directly on 01226 215217.

Simon Brian
Senior Partner & Head of Employment