[Relevant Documents: Second Report from the Justice Committee, Courts and tribunals fees, HC 167.]
Motion made, and Question proposed,
That, for the year ending with
(1) further resources, not exceeding £4,017,927,000 be authorised for use for current purposes as set out in HC 967 of Session 2015-16,
(2) further resources, not exceeding £360,850,000 be authorised for use for capital purposes as so set out, and
(3) a further sum, not exceeding £4,305,530,000 be granted to Her Majesty to be issued by the Treasury out of the Consolidated Fund and applied for expenditure on the use of resources authorised by Parliament.—(Simon Kirby.)
It is a great pleasure and a privilege to speak to the motion and raise the issue arising from the report by our Select Committee. This is the first time that one of our Committee’s reports has been debated on the Floor of the House in this way.
I begin by expressing my appreciation to all the members of the Committee for the constructive and diligent way in which they have approached the work of the Committee and this report in particular. It was undertaken in an entirely collaborative and non-partisan spirit. As is perhaps appropriate for anything that touches upon the law and justice, we have endeavoured throughout to base our conclusions on the evidence that has come before us. I am grateful for that. The report was agreed unanimously, and I hope that that will weigh with the House and with Ministers when they consider it.
We had significant assistance from the evidence, both written and oral, that we received from witnesses. It is particularly worth noting that in this case we were assisted by the evidence of very senior members of the judiciary—the Master of the Rolls, the president of the family division, and the senior president of tribunals. When they speak, their views ought to carry very considerable weight indeed.
There is no doubt that over the past few years, fees for litigants bringing cases have spread and increased across our civil courts, the family courts and tribunals, and there have been a number of proposals for further increases. When we set up the inquiry, we identified four objectives to be looked into. First, how have the increased court fees and the introduction of employment tribunal fees affected access to justice? How have they affected the volume and the quality of cases brought? Secondly, how has the court fee regime affected the competitiveness of the legal services market in England and Wales, particularly in an international context? Thirdly, we particularly wanted to look at the effect on defendants of the introduction of the criminal courts charge, about which I shall say more. Fourthly, we wanted to examine the impact of the increases in courts and tribunals fees announced in “Court and Tribunal Fees”, Cm 9123, published on
I am grateful to the Government for moving swiftly on the criminal courts charge. The evidence was clear that it did not work and was, if anything, counterproductive, arguably costing as much to administer as it would ever bring in. We therefore decoupled the issue from the main part of the report and brought it forward swiftly. I am grateful to the Government for their prompt response and for moving to accept our recommendation and abolish the charge.
In fairness, the Secretary of State for Justice and his ministerial team deserve great credit for that. We should not criticise politicians when they are prepared to change their minds. I think it was John Maynard Keynes who famously said, “When the facts change, I change my opinion.” The Government listened to the evidence and removed the criminal courts charge. I hope they will be as expeditious and responsive on a number of the other matters we raise in the report—as a West Ham supporter, I am always an optimist.
I compliment the hon. Gentleman on an excellent report, but would it not be fairer to say that the Secretary of State changed? I do not know whether that is one of Keynes’s principles. The facts did not change at all; some light was suddenly shone on what was always a mad scheme, and a change came about. However, I do not want to detract from the credit that is owed to the hon. Gentleman’s Committee.
I am grateful to the hon. Gentleman for the spirit in which he made his contribution. I am a friend of the current and the former Secretary of State, and giving credit to those who responded to the evidence is perhaps the appropriate and balanced way to deal with the issue.
It is worth looking at a little of the chronology of one of the matters I am going to turn to. As well as having significant witnesses from the judiciary, we heard evidence from the trade unions, the business community, the Bar Council, the Law Society and a number of individuals and interest groups. We had four oral evidence sessions between November 2015 and February 2016, the last of which was on
We then waited, because we were anticipating the promised post-implementation review of the impact of employment tribunal fees, which had formed an important part of the evidence that was put before us. We knew that the review had been commissioned some time back, so we waited—and nothing came forward. In the end, on
It was against that background that, rather than waiting for the two months the Government normally have to reply to a Select Committee report to lapse, we thought it right to bring our report to the House today in this estimates day debate.
No, we have not, and I have to say that we used quite strong language about that in our report, because we were, frankly, disappointed. What happened does actually go against the spirit of courtesy, openness and co-operation I have seen from the Ministry of Justice team throughout the year or so I have chaired the Select Committee, and I hope it is an outlier. I hope the Minister will give us an indication of why the review report has taken so long and when we will get it. I know it is sometimes not easy to agree these things across Government, but it is pretty clear that the data required for the analysis were collected a long time ago, and, as we say in our report, there can be no reason why at least that factual material cannot be published forthwith, even if the Government are not yet in a position to respond, because the more informed the House and the public are, the better. That is an area of regret, and that is why today’s debate is important and timely.
Let me touch on some of the principles we are concerned with. The levels of various courts and tribunal fees have been politically controversial. We all need to bear it in mind that a balance must be struck between the cost to the public purse of administering a justice system, which is an integral part of any civilised society and of the rule of law, and how much can reasonably be recovered from litigants. We say that, in principle, we do not object to the idea that there should be some financial discipline on those who choose to go to law—those who choose to litigate—in deciding whether that is a wise decision for them to make. We do not have a problem with the principle of a certain level of a fees. Equally, however, we must bear in mind the comments that have been made consistently ever since Magna Carta but were recently elegantly captured by the late Lord Bingham of Cornhill in his book, “The Rule of Law”—which I always think should be compulsory reading for anyone in the political sphere—in which he says, in essence, that the accessibility of justice is as much a part of the fundamentals of the rule of law as clarity of the law itself. He says that justice is not a commodity—it cannot be commoditised in the way that, perhaps, other services can be. It is important to get the balance right. That is where we have some concerns that I will now turn to.
We accept that there is no problem, in principle, with fees for litigants. We know that there are financial pressures on the Ministry, which is not a protected Department. I understand the pressures that Ministers were under when these decisions were taken. We think it is entirely legitimate to find a number of means of reducing the number of vexatious claims. That could be done as part of the financial discipline we referred to, but it could also be done by changing the substantive law to raise the threshold or by making changes to court procedure. That is a legitimate part of the mix. But—we then have to say a number of “buts”, looking at the evidence —the answer to what is a reasonable charge in striking this balance will vary depending on a number of factors such as the effectiveness of fee remission, the vulnerability or otherwise of the claimants, and the degree of choice that they have. There is a distinction, for example, between someone who chooses to litigate over a commercial contract dispute and someone who is charged by the state with an offence, or someone whose marriage has broken down and has no other recourse, in order to have the marriage dissolved and move on with their life, than to go to the courts. The degree of choice is an important issue that must be considered carefully in each case.
There is an argument for trying to recover, as far as one can within that balance, some of the costs that fall on the public purse. In some cases, it may be possible to recover all the costs, but that cannot be an absolute. We were particularly struck by the fact that in some cases there are fees that exceed the full cost of the operation of the court; they are sometimes referred to as “enhanced fees”. We take the view, consistent with Lord Bingham’s formulation and with a public policy approach that we have had in this country for decades, that making a profit from the justice system, in effect, albeit one that is intended to be used elsewhere, requires particular care and a strong justification.
Surely the Ministry of Justice should not be making a profit out of justice. Getting rid of tribunal fees and having equality of access to justice is about making sure that everybody in this country can be productive, particularly women, who can be discriminated against—it drives up productivity and boosts the economy.
We do not go so far as to say that it follows that there should never be fees in any particular class of case—that includes employment tribunal fees—but we do say that a balance has to be borne in mind. I suppose that one could conceive of an argument—we did not rehearse it in detail in our report—whereby an enhanced fee might be recycled within the system. If, for example, some of the fees were being used to cross-subsidise, as it were, other elements of the family jurisdiction, then there might be something in that, but we do not have any evidence that that is the case. The hon. Lady makes a fair point, which is consistent with our report, about the undesirability of going down that route.
The situation provides a contrast with the speed with which the Government acted over both the criminal courts charge, quite rightly, and the new proposals for higher fees ever since the employment tribunal fees were introduced, with some controversy. The Department made those proposals with great speed, but it has been remarkably tardy in producing its review of the impact of those employment tribunal fees. That is why we conclude that, although a legitimate balance has to be found in the interests of society, where the objective of achieving cost recovery and the principle of preserving access to justice are in conflict, it is the latter—access to justice—that has to prevail. In a sense, that is a restatement of the point made by the late Lord Bingham of Cornhill, and I would have thought that most Members saw the logic of that.
Other members of the Select Committee will wish to make particular points, so I will touch on a few of the major matters. I have already referred to the quality of the evidence from the Ministry of Justice, particularly that in relation to employment tribunal fees. Ultimately, the Department may not have the evidence; if that is the case, it should say so, rather than pretend otherwise.
It is worth giving a flavour of some of the comments we received about the evidence base. The Master of the Rolls, Lord Dyson, described the Department’s research as “lamentable”. It is pretty serious when the head of civil justice in this country talks in those terms. The chairman of the Bar Council described the research undertaken in relation to the domestic effects of fees as “insignificant”, and the president of the Law Society said it was “poor”.
I appreciate that the Under-Secretary of State for Justice, my hon. Friend the Member for Esher and Walton has only just started the job—I do not blame him or any of his colleagues personally—but the truth is that the Government did not produce adequate evidence. On the face of it, it seems to have been a “wet your finger and hold it up in the wind” job, rather than being based on significant research. We do not think that that is satisfactory.
Perhaps things would have been different if the Government had brought forward their review. We might have been less critical if we had seen the evidence that they have collated but not yet made available. As it was, we had to base our conclusions on the evidence that we had, which I am afraid went significantly in another direction. It is ironic that, by not providing that material, the Government have not been the best of advocates of their own cause.
I am not going to say that everybody had difficulties with employment fees. In their evidence to us, the Federation of Small Businesses and Peninsula Business Services said that it was reasonable to have the objective of discouraging weak and vexatious claims. That was certainly the Government’s assertion when they introduced the fees, but hard material to support that view has not yet been forthcoming. We must bear in mind the comments of the senior president of tribunals, Sir Ernest Ryder, who said that it was simply too soon to say whether that has happened. If that is the case, and if the valuation is not yet available, now is not the time to be rushing similar increases in other parts of the civil and family and immigration jurisdictions, which I will turn to later. I will leave it to others to go into more detail about employment fees, as I know they will.
I am grateful to the distinguished Chair of the Justice Committee for allowing me to intervene on him. If there is very little evidence to suggest that there were vexatious claims in the employment tribunal system and if the number of claims in some regions has dropped by a quantum of about 80%, is it not possible to make the opposite argument that fees are a block to justice and that, to get access to justice, they will have to be lowered? If this is about cost recovery, the number of employment tribunal cases is now so low that no costs are being recovered at all.
That is why we made the point that we need to have a much better evidence base before we go forward with like increases in other areas. We did not rule out the fact that a fee may be appropriate in some cases, but we need better evidence to know the proper level to pitch it at and whether there are any unintended consequences—whether it will deter not just unworthy claims, but, as we fear, meritorious claims as well. A particular concern raised was that the employer and the employee claimant would get into a war of attrition, depending on who has the deepest pockets. That is not really consistent with the “equality of arms” argument that we have always regarded as being central to our justice system. Funnily enough, it may tend to make cases more protracted than they need to be, when the swiftest and earliest possible settlement would, as a general rule, be in everybody’s interests. I am grateful to the hon. Gentleman for his point. We were much assisted in our inquiry by evidence on the matter from the Law Society of Scotland, and we are grateful for its assistance.
Against that background, we made all due allowance for the fact that there has been some change in the substantive law, for the improving economic situation, for the previous downward trend in tribunal cases and for the ACAS conciliation schemes. Those things could account for some of the drop, but we were looking at a drop of about 70%, and we found no evidence to suggest that it was accounted for entirely or substantially by those matters, so we were led to the conclusion that the clear majority of the decline was attributable to the level of fee. That is why the matter needs to be looked at seriously and we need the factual information immediately.
We set out certain indicative thoughts about the sorts of changes that might be made; they are indicative because we do not have the evidence to go further than that. We think that this is an important issue, which really cannot be kept back for much longer.
I commend the hon. Gentleman on many of the recommendations in the report, but—as I would, I suppose—I want to highlight one that I think is slightly problematic. The Justice Committee went along with the decision of the independent commission on freedom of information to disallow appeals from the Information Commissioner to the first-tier tribunal, despite the fact that 20% of those appeals are successful. Would the hon. Gentleman like to look at that again? The Select Committee stated in its report:
“We see no reason to disagree with the Commission’s view.”
Has the hon. Gentleman simply gone along with the view of the commission? What is his reason for making that decision?
Simply that there was no compelling evidence presented to us to the contrary. We followed the evidence, as we did in the other matters. It is not because we are afraid of pulling our punches; as the hon. Gentleman has seen, we have not pulled our punches in some areas. We simply did not find any evidence to suggest that that assessment by the independent body was wrong.
I will move on quickly to some other matters. There has been particular concern about the impact of employment tribunal fees, but certain other matters have also been brought forward. The April 2015 increase in fees for money claims should, in our judgment, be reviewed. That may seem rather remote and arcane, but it is very important, because it affects the international competitiveness of London and the UK as a jurisdiction of choice, especially for commercial litigation. That is a great strength of this country, and some figures released today by the Legal Services Board highlight its significance. Legal services and their related supply chain contribute something like £35 billion towards this country’s GDP. Legal services exports have increased by some 33% over the past eight years, and something like 10% of the legal profession have instructions from overseas clients.
At the same time, there are pressures on the British jurisdiction and threats to its exclusiveness. We have already seen, in places such as Singapore and Dubai, courts operating on the basis of English common law but outside our jurisdiction. It is worth observing that very recently in Amsterdam, in the Netherlands, an English-language court was established. We should be very wary of biting off the hand that feeds us—or, to use another metaphor, doing anything to kill the goose that lays the golden egg—by reducing the value of the British legal system and its attractiveness to litigants nationally and internationally.
We think that the Government should review the increase in fees for money claims, and they should certainly not resurrect the proposal to double the £10,000 cap or remove it altogether. They were right not to proceed with that when it was originally proposed, but they did not rule it out for the future. We are saying that they should not think about going anywhere near it, at least until they have had a proper review of what has been done.
Another point, which goes back to an issue that has been raised already, is about the increase in the divorce petition fee from £410 to £550. Given that the cost to the state of the average straightforward divorce petition is about £270, that is a mark-up of about 100%. We find it difficult to see how making a 100% profit out of divorce cases can be justified, when it is an entirely captive audience because there is no other way to get divorced than going to the courts. We say very clearly that the increase should be reversed.
Our view was fortified by the trenchant evidence from the president of the family division, the right hon. Sir James Munby. It is pretty unusual for a senior member of the judiciary to speak in such terms to a parliamentary Committee or any other body. Sir James said, rather tellingly, that he was concerned that the Ministry of Justice was
“battening on to the fact that there is a captive market” and that it was
“putting up the fees until it becomes another poll tax on wheels”.
That is pretty strong language. I would put it slightly differently. We say that there is a risk that it will become a “divorce tax”. That cannot be just and we strongly urge Ministers to look at it again most urgently.
Immigration and asylum tribunals are another important issue. There are concerns over whether our immigration and asylum system and the appeals system are abused. There must be safeguards to ensure that proper cases are properly heard. Someone with a legitimate claim must have a decent chance of challenging the decisions of the state or of any Executive body. Equally, it is in everybody’s interests that weak and unmeritorious cases are weeded out. Nobody has a problem with that. Our concern is that fees have been brought in with remarkable swiftness, without a significant evidence base.
In July 2015, the Government consulted on doubling the fees in the first-tier tribunal from £80 to £160 for an application for a paper determination and from £140 to £280 for an application for an oral hearing. In December 2015, after the consultation, it was confirmed that that would go ahead. Only a few months later, in April this year, a further consultation was brought out, without any review of the impact of the last set of increases, proposing a sixfold increase in the fees in those jurisdictions, so that there was full cost recovery. It was proposed that an application for a paper decision would cost £490 and an application for an oral hearing would cost £800.
We have the same concern that I have raised more than once: there is no apparent evidence base to support that increase. If there were, we might have taken a different approach to it. Making that increase does not seem justified when the people involved are, by the nature of these cases, vulnerable. That is why we express considerable concern over the proposals.
I am surprised that the Government have adopted that approach, given their experience with employment tribunal fees and the criminal courts charge. The idea is to have full cost recovery. The problem is that we are dealing with people who are by their nature—particularly those in the asylum system, but also those in the immigration system—very unlikely ever to have any means to recover even a decent percentage of the cost against, let alone the full cost. The Government will end up in exactly the same position as with the criminal courts charge. They are setting themselves an objective to raise money that they have no hope of raising because the people they are trying to get it from do not have the means—it is getting blood out of a stone. We think that it is pointless to pursue an unachievable objective. That is why we urge the Government to think again.
I have endeavoured to outline what is a detailed report. I hope that it is useful to the House. Given the nature of its technical but important topic, we make no apology for its detail. These are issues that impact not just on our system, but on individuals, because every piece of litigation involves an individual somewhere. The Government have had ample time to consider the report, so I hope that we will have a substantive response from the Minister in which he says when the information will be published, what they will do about the increase in divorce fees, what they will do about the realism or otherwise of moving to full cost recovery in the immigration and asylum chamber, and what they will do about the other significant pieces of evidence that we have detailed in the report. I am grateful for the House’s indulgence.
I, too, welcome the work undertaken by the Justice Committee, of which I am a member. I am also grateful for the chairmanship of the Committee of Robert Neill, who has brought us to a consensus on the recommendations in the report. The Government need to reflect very seriously on those recommendations. At the heart of the proposals before us today is access to justice, and that issue is also central to our recommendations.
As the Chair of the Justice Committee has said, we remain concerned first and foremost that the Minister has not yet brought forward the results of the review. That has influenced very strongly how we have been able to present our report, as well as the points we are putting today and the way we are putting them. The Minister could have saved himself a lot of trouble had he brought forward the information requested in the timescale in which we requested it.
As hon. Members will know, during the 2010-2015 Parliament the coalition Government pursued a range of policies aimed at decreasing the net cost of Her Majesty’s Courts and Tribunals Service through the pursuance and introduction of a range of various fees, including, in particular, charges for employment tribunals. As the Chair of the Justice Committee has said, we looked at whether the increase in court fees and the introduction of fees for employment tribunals had affected access to justice. It is fair to say that the conclusions of all members of the Committee were straightforward, especially in the area I will focus on, namely the recommendations on employment tribunal fees. All the evidence we have had—from the judiciary, the trade union movement and organisations dealing with vulnerable people with especially vulnerable status relating to maternity provisions or other similar issues—has shown that there is a real challenge from the impact of fees on employment tribunals as a whole.
I will make one plea to the Minister. It would be helpful if, before the summer recess, he could meet the commitment that he gave to the Committee to publish the results of his one year review as soon as possible. Given our concerns, it is important that that information is put into the public domain. This is not something he can avoid. He said that he would deliver that information to the Committee before it reported, yet even after the publication of the report the Committee has still not seen it.
Employment tribunal fees are of particular concern to members of the Committee from across the House—certainly to me. AS I have just said, the Committee found it unacceptable that the Government had not reported on their review. There was also some damning evidence about the impact of employment tribunal fees on access to justice.
Let me touch on a couple of statistics so the House can get a flavour of why we have those concerns. The number of employment tribunal cases brought by single individuals declined by 67% to around 4,500 per quarter between October 2014 and June 2015. The number of cases brought by more than one person—multiple claims—declined by 72%, from 1,500 per quarter to around 400 per quarter. That is a major decline. It is important that the Minister reflects on that. Is that decline because there are no injustices in the workplace? Is it because people do not feel aggrieved with their employment position? Has the figure declined because people have decided that applying to the employment tribunal for justice is not worth a candle? To all three questions, the answer is no. The decline is due to the prohibitive fees that the Government have put in place.
Statistics provided to the Committee by the TUC and Unison compare cases brought in the first three months of 2013 and 2015, and they show reductions across the board in areas of key industrial activity. For example, the number of cases brought to employment tribunals under the working time directive fell by 78%. My question, which I hope the House will reflect on, is this: is that because 78% fewer employers are making people work longer than their hours under—dare I say it?—European legislation?
The number of tribunals brought for unauthorised deductions from wages has fallen by 56%. Has some miraculous activity meant that employers stopped unfairly deducting from individuals’ wages during that period? If so, the information that the Minister is supposed to have considered might help us to understand that fall in wage deductions. Cases of unfair dismissal have fallen by 72%, equal pay claims are down by 58%, and those for a breach of contract by 75%. Sex discrimination cases have fallen by 68%. Therefore, one of two things has happened: either employers have dramatically improved their performance over the past two years in those areas, in which case let us see the evidence to show that; or people who have been unfairly discriminated against regarding deductions from wages, breach of contract, sex discrimination, the working time directive, or unfair dismissal, have not taken their claims to courts and employment tribunals because of the fees introduced by the Government.
Several cross-party witnesses to the Committee claimed that on maternity pay and pregnancy, for example, employment tribunal fees were having a profoundly discriminatory effect on pregnant women and new mothers who receive poor treatment at work. Rosalind Bragg of Maternity Action said that fees had led to a 40% drop in claims for pregnancy-related detriment or dismissal. The Fawcett Society—again, not a party-political organisation—stated that pregnancy discrimination was widespread in the public and private sectors, but that very few women were able to take action because of the deterrent effect of the fees.
That is particularly true for low-value claims. When people are deciding whether to take a case to a tribunal, they will inevitably weigh the cost of the fee against the likely size of an award. If the likely size of an award is low but the sense of having access to justice and feeling strongly about an issue remains high, the levels of fees are still deterring people from taking claims to employment tribunals. Do not listen to me, Madam Deputy Speaker—the Council of Employment Judges told us that, and said that there had been a
“particularly marked decline in claims for unpaid wages, notice pay, holiday pay and unfair dismissal”.
Those are the types of cases brought by ordinary working people, and those are the words of the Council of Employment Judges, not mine.
That shows that there is a problem that the Minister needs to consider seriously. If his evidence indicates that the problem is not as we think it is, he should bring that evidence forward so that we can consider it. The Council of Employment Judges also stated:
“Many judges reported that they now hear no money claims at all. Prior to the introduction of fees money claims were often brought by low paid workers in sectors such as care, security, hospitality or cleaning and the sums at stake were small in litigation terms but significant to the individual involved. There are few defences to such claims and they often succeeded.”
Now, however, such cases are not being taken forward, which should be a worry to the House.
In written evidence, Unison used figures for the median awards for different types of discrimination claims in 2012-13—ranging from just under £4,500 in age discrimination cases, to £7,500 in disability discrimination cases—to support its contention that fees constituted such a high proportion of probable awards that many claims would not go forward because people found them excessively difficult to pursue. Indeed, a survey by Citizens Advice indicates that 47% of its respondents would have to put aside—wait for this, Madam Deputy Speaker—six months of their discretionary income to be able to afford the £1,200 needed to bring a type B claim. If people on a low income feel aggrieved but have to put away £1,200—six months of their discretionary income—it is self-evident that those who have a just claim will not take it forward because of the fee.
That is an important point. Women are more likely to be in low-paid jobs and there is employment discrimination in many areas against black, Asian and minority ethnic communities. The key point in the case I am putting to the Government is that the Committee heard evidence showing that the fees have a discriminatory effect. The Government have investigated this matter, but have not yet produced their report to say whether they believe that to be the case. There may be other reasons—I do not doubt that there are—but the key point from today’s report is for the Government to provide evidence to the House. The Committee was unanimous in saying that there is a discriminatory effect that deters claims from the poorest, the lowest paid and those in the most insecure employment. It is therefore hitting those who have no other defence than an employment tribunal, which is now out of reach.
This is a matter of access to justice, which we on the Committee, on a cross-party basis, have put on the agenda. We have said that there is a real case to answer. It is for the Minister, both today and in the future, to respond to the report and answer that case.
It is a great pleasure to follow Mr Hanson and my hon. Friend Robert Neill, the Chairman of the Justice Committee. The difficulty for me is that they have already covered all the issues I was going to cover, but let me touch on one highlighted by the right hon. Member for Delyn and the Chairman of the Committee: access to justice.
Access to justice has been the key issue for all of us throughout this process. It was a big issue for the Committee, but it is a big issue for the courts and the senior judiciary. Through an Industry and Parliament Trust Fellowship, I have had the opportunity to talk to members of the judiciary about many of these issues, and I can assure the House that they are very concerned about access to justice.
Without the information from the Ministry of Justice, it is difficult to know what the impact of the changes will be. An enormous number of reforms are taking place; it is not just court and tribunal fees that are being put through at a rapid pace by the MOJ. The Lord Chief Justice is a great reformer, and when talking to him one really gets the feeling that he understands the issues relating to access to justice. At the same time, Lord Justice Briggs is taking forward his views for an online court, which could reduce the costs of justice by taking lawyers out of the equation in bringing a relatively small case to court. A lot of work needs to be done to get the detail of online courts right. Nevertheless, it will be there to provide access to justice.
The Committee’s report highlights the need to consider other means of determining court applications. One of those comes under the term “alternative dispute resolutions”. I happen to be the chairman of the all-party group on alternative dispute resolutions, so it is an area I am aware of. The courts, too, are aware of this. When I sat in the commercial courts, the judges were very keen to ensure that when there was an option of alternative dispute resolution, people took it. Some did and some did not, but it is important that it is offered as an alternative to their carrying on with their day in court. If they do take the option, it is important to ensure that the alternative dispute resolution sector can also keep costs down.
When I sat with judges in the courts, the issue on their minds all the time was how to keep costs down. We went through this with a lot of the cost hearings and cut out quite a lot of the barristers’ fees. It is important to ensure that we can tell whether it is the changes to the courts that are having the effect on tribunal numbers, or whether it is the effect of the fees being charged. I say that because as part of the experience I spent a day with an employment tribunal. There were three members sitting and I asked them how long it would go on for. They said that they had scheduled six days for an employment tribunal that could have lasted one day, so the court fees had not had a significant effect on this individual bringing their case. They had assigned six days to it, because it was a litigant in person and they wanted to bend over backwards to provide the time for that individual to make their case. A much more sensible approach would have been to ensure that the case went on for a lot less time, while still preserving access to justice and ensuring that the litigant in person could still achieve what they wanted to achieve.
The senior judiciary have been pursuing one line of cost reduction, while the Government have been pursuing another. There is nothing wrong with pursuing reductions along a twin track, provided that the two groups work together and talk to each other. The criticism that came back to me from the senior judiciary I sat with was that the Government were not talking to them about the changes they were making. That is a great shame, because without that I do not see how we can make sense of, and really get to the bottom of, access to justice.
My hon. Friend the Member for Bromley and Chislehurst, the Chair of the Committee, has already highlighted the issues around the impact assessment of the changes to court fees and the fact that the information is still not available. He also pointed out that the Master of the Rolls was absolutely scathing about the quality of that evidence. I put that on record again, because it is very important when someone as senior as the Master of the Rolls is critical of the Government’s approach. I have to say that I share his views. The courts and tribunal fee is not a milch cow; it is a real issue of access to justice. Without the information we still have not received, we cannot assess the impact of the fees on access to justice and what impact they will have.
I am pleased to be called to speak in this important debate. I start by declaring an interest: my wife sits as a fee-paid, part-time tribunal judge in the social entitlement tribunal and is a criminal solicitor receiving public money. Prior to my election to this House, I was with Wilberforce barristers chambers in Hull, where I practised criminal law, and recently I have re-enrolled—if that is the right term—as a solicitor.
In my respectful opinion, the Select Committee Chairman, Robert Neill, goes about his business fairly and is entirely impartial and objective. I welcome the Committee’s report and recommendations urging the Government to publish the impact of employment tribunal fees and its proposal that fees must be substantially reduced. It is worth noting—I make a party political point here—that Labour, in opposition, when the fees were being considered and discussed, opposed them absolutely. We opposed them throughout the debate. I remember attempting to speak to Ministers to make submissions directly to them. I cannot remember whether I got a sit-down meeting, but I do recall chasing them through the Lobby, telling them what problems I thought the fees would create and what the consequences would be.
We also opposed and voted against the statutory instrument, because we knew from the evidence from the experts, from people contacting us, from the unions and Citizens Advice briefings, from the Bar Council and the Law Society—from anybody who knew anything about it—that the fees were unlikely to work. The number of tribunals has dropped by a massive 70%. We are talking huge percentages. We cannot begin to pretend—I doubt that the Minister, in good conscience, would get to the Dispatch Box and pretend—that the majority of those cases were unmeritorious. I do not think that the Government would say that. So what does it mean? It means that people are being shut out of accessing justice. I pay tribute to Unison the union for bringing legal challenges in judicial review. The latest case is to be heard by the Supreme Court later this year. I will not predict the outcome, but it seems to me, as a lawyer, pretty favourable to the union.
When the fees were introduced, the Government told us they were to pay for the employment tribunal service’s running costs, but it is not working. In 2014-15, the Ministry of Justice said that the net income from the fees was £9 million, but the expenditure of the service is £71.4 million. Thousands of workers are being shut out of seeking justice. That leads me to think that this is purely ideological. The Justice Secretary has overturned so many of the policies of his predecessor Lord Chancellor that the rumour in this place is that he is considering changing the name of his children. It would not harm anybody, would it, if he just said, “Look, this isn’t working. We didn’t expect this to be the fiasco it has become”? We can do something about this. We should scrap the fees, and we should scrap them now.
Much of the preliminary work on court and tribunal fee reviews was carried out in the early days of the coalition Government, when I had the pleasure of minding those issues at the Ministry of Justice. I acknowledge the point made by my hon. Friend Robert Neill: the issues are complex and dependent on the differing circumstances. I think, however, there is now a level of understanding that was not generally prevalent back then—first, that it costs money to have, as we do, a decent court service, decent quality courts and an excellent quality of judges; and, secondly, that this cost should not just be for the taxpayer to shoulder.
We invested £300 million in the state-of-the-art Rolls building to hear large international and money cases. This gave the UK the quality of courts required to retain our premier status as the place to seek justice, using English and Welsh jurisdiction clauses, and thereby added greatly to the offering and income of UK plc. I have to ask, however, whether very high-value cases should be subject to a £10,000 fee cap? The first case to be heard in the Rolls building involved two Russian oligarchs and would have cost them hundreds of thousands of pounds per week in lawyers’ costs but, relatively, peanuts to hire the court and judge. I appreciate concerns that fees should not be so high as to impact on international competiveness, but I would appreciate hearing from the Minister whether he feels that we have the balance right.
On employment tribunals, the claim figures may be smaller—most of the time—but the principle remains that the service has to be paid for. Given that an employment contract is a private contract that does not involve the state, except when the state is the employer, why should the taxpayer subsidise the private claim? I think we now have the right formula: so far as possible, and as the starting point, the fees paid by the applicant should cover the cost of the application, but following that, where it is in the interests of justice, people who need help should be individually assisted via a remission scheme.
In that context, I do not agree with the Justice Committee’s suggestion that the overall quantum of fees should be reduced, and I do not believe that its report justifies that in any event, although I accept that the Chairman has just acknowledged that more data are required to make the assessment.
The figures for employment tribunals are material. There were 67% fewer single cases from October 2013 to June 2015, although that still represents tens of thousands of claims per year. The fall in multiple cases by 72% was more expected, as lots of public sector equal pay claims were working their way through the system. There seems to be some debate, however, about the extent to which fees have put people off claiming, and this will always be a hard figure to tie down. The Committee speculated that it could be 13,000 a year, based on 26% of ACAS claimants saying they would not progress their claim because they found the fees off-putting. Of course, a significant proportion might have believed this, but possibly only or mainly because they had weak claims. We would need more research.
The debate around employment tribunal fees often focuses on the questions raised by vexatious or highly risky claims and the impact on business and the economy. I shall come back to these important issues, but they did not form the starting point of our initial review, which was, first, to get those who could pay to do so; secondly, to encourage parties to seek alternative methods of dispute resolution, where possible; and, thirdly, to maintain access to justice. I still maintain that those were sound principles on which to proceed, and I think that this has been justified by the very many judicial reviews, brought mainly by the trade unions, that have to date consistently failed.
I strongly believe that when a claimant could issue a claims form at zero cost to themselves, he or she had every incentive to do so—but, most importantly, every incentive to do whatever the weakness of the claim itself. The Justice Committee report describes a witness who suggested that vexatious claims may be less than 5% of claims, but that still represents a significant number for the unfortunate companies that are subjected to them. Witnesses also stated that fees had deterred claimants who would otherwise have won as the proportion of successful claimants has not increased, despite a fall in the number of cases.
The hon. Gentleman says that 5% is significant, but we are talking about falls of 70%. If he is genuinely concerned about discouraging unmeritorious or frivolous claims, a small charge—not one of £1,200—might be appropriate. Does he not think that that amount is disproportionate, even if he agrees with the principle?
I am coming on to alternative ways of funding. The starting point is to get cost recovery and then to look at individual circumstances, where necessary. I would have liked hon. Members to spend a little more time talking about the remission system rather than fees—perhaps one of my hon. Friends is about to do so. More winnable cases leads to more of them being settled before going to tribunal, but even if this is an access-to-justice issue it should be dealt through the remissions system rather than the fee itself.
I certainly recall personally the significant numbers of businesses complaining that the threat of employment claims alone was enough to put them off employing more people. Interestingly, this was very much more prevalent among small businesses than large ones. Indeed, this is reflected in the Justice Committee’s report, as the Chairman said, which clearly shows the CBI to be more relaxed on the issue than the FSB. This is undoubtedly because it is the larger companies that have the large HR departments that can manage claims as part of their overall business. For small businesses, processing a claim, let alone taking time off to go to tribunal, can take up an impossible amount of the principal’s time.
Does the hon. Gentleman accept that if the employer is given an unfair financial position or advantage over the claimant, ultimately, regardless of whether it is a big or a small firm, the greatest cost will be borne by claimants themselves?
The hon. Lady talks about unfair advantage, but I am not sure how she defines it, particularly if it is a single employer. Most of the FSB’s membership are two-person companies. If the hon. Lady is saying that it is unfair if it is one employer against one employee, I would say it was not. The answer to her question is that it would depend on the circumstances.
There grew a culture of settling claims, even weak claims, so that they would simply go away. The fact remains that there is more to business confidence than statistics. If the indirect impact of fees has been to change this perception among business owners, which I feel it has, fees have made a significant contribution to an economy that is delivering the creation of the highest level of employment the UK has ever enjoyed. We should be cautious about meddling with that.
The big change from when I was a Minister in the Ministry of Justice is the use of ACAS conciliation. I should be interested to hear more from the Minister, but the figure of 83,000 claims being dealt with by ACAS at an early stage sounds very promising indeed. It was the policy of the last Labour Government and then of the coalition Government and this Government that alternative dispute resolution should be promoted as a cheaper, quicker, more consensual and less stressful form of sorting out problems, including employment disputes. I shall be interested to hear whether the Minister has plans to extend the use of ADR further still.
Will my hon. Friend comment on our specific proposal that there should be an uprating of the remission threshold to take account of inflation. Otherwise, there will be a risk of fiscal drag. That is one of a number of specific points we make about remission.
It is useful to look at that, perhaps along with a wider review of the way in which remissions are working. A new system has been put in place, and I accept that such things need review.
The report totally overlooks the changing nature of the funding of legal claims now and possibly in the future—for instance, the use of loans to fund claims, or the use of no-win, no-fee agreements and insurance to fund claims. It assumes that the burden of risk is simply to be shared between claimant and defendant, which is unreflective of reality. What about the risk of claims being shared between insurers, lenders, lawyers—and, yes, even trade unions? For instance, should we not investigate what level of risk they should all take on board, before the taxpayer has to step in? Neither Opposition party statements so far, nor the Justice Committee report seems to be looking at the broader issues in an area where we need innovative ideas and an assessment of the wider marketplace. I would therefore be grateful to hear the Government’s views.
This debate is apparently about courts and tribunal fees. It is unfortunate that this Government’s programme of reforming courts and tribunal fees has been pursued as part of a wider Government austerity programme. In practical terms, this means that tribunal fees introduced in 2013 require financial contribution from claimants to have their case heard, and further fees look set to be imposed.
The governance and function of the management and operation of employment tribunals will be devolved to the Scottish Parliament in 2017, but the First Minister of Scotland has outlined her concerns about this system and expressed her desire to look forward to abolishing fees for employment tribunals. In the interests of justice, access to a fair hearing and fair work should not be the preserve of those who can raise the funds to have their voices heard, and it risks falling foul of the Human Rights Act.
We have heard that part of the reason for introducing such fees for claimants was to discourage weak and vexatious claims that, while costing the employee nothing, could impose significant legal costs on the employer. However, since these fees were introduced, we know there has been a significant drop in the number of claims accepted by the employment tribunal. Is anyone seriously suggesting that the drop can be accounted for by so-called “weak and vexatious claims” no longer being pursued? Surely the drop in claims must mean that many of these employees simply cannot afford to pursue their cases due to the costs involved, so they are effectively being priced out of the justice system.
I agree with the hon. Lady. Organisations such as citizens advice bureaux or law centres in Coventry tell us that they are inundated with people who cannot secure justice at tribunals because they cannot afford it. The real reason for the cuts in these budgets was very much the Government’s philosophy of making gigantic cuts, but the important point is that people are being denied basic justice.
I absolutely appreciate the hon. Gentleman’s point: this is nothing to do with a justice agenda; it is about an ideologically driven motivation towards austerity that effectively hits people who cannot raise the funds for justice. Surely no one can defend that.
Research undertaken by Citizens Advice, which the hon. Gentleman just mentioned, has demonstrated that an eye-watering 82% of those surveyed who were experiencing problems at work said they would be deterred from bringing a claim due to the fees; and only 29% of respondents were aware that they could apply for a fee remission. We have heard a similar chorus of concern from the Law Society of Scotland and other experts, which shows that genuine cases are not reaching tribunals as a result of the prohibitive fees. The impact on women is particularly damaging and, as a result, unlawful employment practices are undeterred and are going unpunished.
Let us look at still further evidence that such fees are a barrier to justice. On
Access to justice cannot and must not be limited to those who can afford it. That is not acceptable in any country that seeks to see itself as enlightened and democratic. Despite talk of austerity, politics is about choices, and these choices are based on the shared values of the society in question; it is as simple as that.
Robert Neill, who chairs the Justice Committee, says in its report on tribunal fees:
“Where there is conflict between the objectives of achieving cost-recovery and preserving access to justice, the latter objective must prevail.”
I could not agree more.
Worryingly, as has been pointed out, there has been a lengthy delay in the publication of the Government’s post-implementation review on the impact of employment tribunal fees, which aims to assess their effect against the three main objectives of transferring some of the cost from the taxpayer and towards those who can afford to pay and encouraging parties to seek alternative ways to resolve disputes while maintaining access to justice. Like the hon. Member for Bromley and Chislehurst, I am deeply concerned that such an implementation review has not taken place.
However, today’s debate is an estimates day debate, and I crave your indulgence for a few moments, Madam Deputy Speaker. I would like the House to bear it in mind that it is an estimates day debate. I believe it was Benjamin Franklin who said the only certainties in life are death and taxation. He was certainly right about the first, but recent events may suggest he is a wee bit off the mark on the second. However, there is another certainty in life that Mr Franklin overlooked: the one thing we may be sure will not be debated during a Westminster debate on estimates are the actual estimates. This issue may not exercise the minds of the general public, but that is because it is not well known outside this place just how little scrutiny there is of the spending plans of Departments. The scrutiny is negligible and it has suited successive Governments of all persuasions that it should be so. If the public knew just how inscrutable this process was, they would rightly be alarmed.
The estimates process is a very technical process by which spending is approved by Parliament. I further crave your indulgence, Madam Deputy Speaker, for just a few minutes more and ask you to allow me to recall that during the EVEL—English votes for English laws—debates the Leader of the House noted the possibility of a review of this process while seeming to be completely adamant that estimates already allow for affecting the Barnett consequentials. The Procedure Committee, on which I sit, is continuing to review the estimates process and many very distinguished and learned experts—far more distinguished than I am—from all sides have argued while discussing EVEL that the estimates process is simply not fit for purpose.
The way in which this House deals with the supply and estimates process is not sustainable. We need to have proper debate around supply procedure to achieve clarity on Barnett consequentials. The scrutiny of the estimates process is not robust and this Parliament has the least scrutinised spending arrangements in the western world—in this, the so-called “mother of Parliaments.”
Madam Deputy Speaker, I crave your indulgence for one minute more. Adam Tomkins, who is now a Conservative MSP, told the Procedure Committee on
“whatever we do with English votes for English laws has to be made practicable and operational in the light of and through using the Barnett formula. I think that can happen, but I think it can happen only if there is a clear opportunity for MPs representing constituencies from across the whole of the UK effectively and robustly to engage in deliberation and debate in the supply or Estimates process. At the moment, it seems that there is no such opportunity because…Estimates debates tend to be very wide-ranging—about everything other than the Estimates”.
“The fly in the ointment is to have this current inability or unwillingness to debate robustly and effectively parliamentary Estimates.”
The process is such that these procedures simply do not give MPs the full opportunity to scrutinise any Barnett consequentials of England only or England and Wales only legislation, and that is required in a healthy and mature parliamentary democracy. We need not take my word for it; we have the opinion of an eminent Conservative MSP—an expert in the field, or so I have been told. It should be a consequence of EVEL that the supply process be reformed in the interests of this being a “process of development”, as promised and envisaged by the Leader of the House on
I thank you, Madam Deputy Speaker, for satisfying my craving for your indulgence, and I will return momentarily to employment tribunal fees.
Order. For clarity, I should tell the House and the hon. Lady that she is perfectly in order. She is talking about estimates and this is an estimates day and, whatever anyone else says, in my judgment the points she is making are perfectly reasonable and ought to be debated.
I thank you enormously, Madam Deputy Speaker, for that supportive comment.
Regarding employment tribunal fees, the SNP Government in Scotland understand, as I fear the UK Government do not yet seem to, that the introduction of these fees is a significant barrier to justice, not least for women facing maternity discrimination who cannot afford to take a rogue employer to a tribunal. Last year a report for the Department of Business, Innovation and Skills and the Equality and Human Rights Commission found that unlawful maternity and paternity discrimination is now more common in the UK workplace than ever before, with as many as 54,000 pregnant women and new mothers—one in nine—being forced out of their jobs each year.
We in Scotland will listen to the experts. We will abolish these prohibitive and punitive fees. It is the right thing to do and justice must be the guiding principle of all we do. When any state puts a price on justice for its citizens, that is a state in peril. I urge the Minister to reflect on this and reconsider the pernicious effects of such fees on ordinary working people.
I am grateful for the opportunity to speak and to follow such experienced and learned speakers from across the House. I will concentrate on courts and tribunal fees. I am grateful for the opportunity to have served on the Select Committee that produced this report, and I wholeheartedly endorse the report and its recommendations.
I want to focus not on the more newsworthy aspects of the report such as employment tribunals, but on the structure and remission of fees. It is critical that fees do not impede access to justice. Fees are useful, and indeed necessary, for two reasons. First, they help to pay for the justice system, as my hon. Friend Mr Djanogly reminded us. Secondly, fees can be used effectively to deter frivolous and vexatious claimants. As ever, as has been said across the House this afternoon, getting the balance right is key. The introduction of fees before employment tribunals has clearly had an enormous impact on the number of cases issued, and it was right that we focused on that.
I know from speaking to many of my fellow barristers that fee increases have had a significant impact in other areas, particularly that of professional negligence. It is not the welfare of my fellow barristers that concerns me; it is the welfare of individuals such as those injured when medical treatment goes wrong and who cannot issue claims. That should be a matter of concern for us today.
The Justice Committee looked closely at fee structure and fee remission during our inquiry and received evidence from senior members of the judiciary, the Bar Council and the Law Society, among others. One suggestion to alleviate the deterrent effect of the increases was to allow fees to be met in a series of staged payments throughout the course of a claim. At first glance, staged fees seemed to be a good idea, but the suggestion was not universally supported by the evidence given to us by senior members of the judiciary. Both Lord Dyson and Sir James Munby were hesitant when questioned by the Committee about the concept of staging fees. Lord Dyson said specifically that it was not a proposal that he had previously thought about. He agreed that it was an interesting idea but voiced serious concerns about how fee staging might be used by respondents to put pressure on claimants at various stages of the litigation.
One solution, suggested by Sir Ernest Ryder, could be to adopt the Scottish civil justice model of requiring a respondent’s fee to be paid alongside sequential fees for claimants. This, he said, would level the playing field and place the risk more fairly on both parties. As the evidence did not point us clearly in one direction or another, the Committee’s proposal in this area is a tentative one. A graduated or sequential schedule of fee payments could be a positive step, but we feel that a pilot scheme should be carried out in the first instance to evaluate the best way to operate such a system.
I turn now to fee remission, and I shall again take employment tribunals as an example. To be successful in an application for remission, a claimant must first pass the disposable capital test and then the gross monthly income test. The claimant has to fill out a separate fee remission application for each court or tribunal fee. While taking evidence, we were given statistics about how many pages claimants had to fill in. The forms are clearly not simple. Thompsons Solicitors pointed out that the guidance booklet itself was 31 pages long. Major changes have been made with the introduction of a new, supposedly user-friendly way to deal with fee remission, which has now been rebranded as “help with fees”. There has clearly been some improvement but complexities remain. This is possibly symptomatic of the much wider problem of litigants in person not having a great deal of understanding of the system in which they have to operate. The situation clearly needs to be kept under review.
The Law Society has spent a considerable amount of time looking at fee remission in general and has called for the Ministry of Justice to introduce a system for regular re-rating of the remission thresholds to take account of inflation. It has also suggested that a further review of the affordability of civil court fees and the remission system should take place and that simplification in all areas should be considered. The Committee endorsed those proposals. Personally, I think that there is a lot of merit in the suggestion of enabling automatic remission for all basic rate taxpayers. That would simplify the system enormously. Fee structure and remission may not seem at first glance to be an obvious cause célèbre for reforming lawyers, but without structural change our justice system becomes less accessible and less affordable for those who need it.
I shall start by declaring that I practised as an employment solicitor for many years before I entered this place. My speech will focus primarily on the impact of employment tribunal fees, but I want to start by making a broader point. Many people are still struggling to understand why a majority voted contrary to the mass of economic evidence that leaving the EU would be bad for jobs and growth, and the subject matter of this debate should give us food for thought about why some people voted in the way they did. Messages about risks to the economy will only work if we have an economy that works for the whole population. Therefore, as well as aiming for full employment, we must ensure that the jobs we create are permanent, secure and properly paid. Telling people on zero-hours contracts or in agency work that there was a risk to their jobs from Brexit was not persuasive.
A culture has been created in this country that views employment as a flexible, disposable concept, not as the basic building block needed to create a cohesive and prosperous society. When the few rights that we have are locked away in a system that deliberately prevents people from enforcing them, we should not be surprised that so many voices say they feel disfranchised. For too long, the question of fairness at work has been at the fringes of political debate. I am sure that most hon. Members would agree that opportunity should exist for everyone, that there should be no glass ceilings and that those with different backgrounds should have just as much chance of making it into their chosen job as the next person. Too often, however, lip service is paid to those aims and—crucially, in the context of this debate—little thought appears to be given to the consequences of employment ending. There are workplace rights and protections that this place has deemed a necessary part of the social contract that the Government have with the country, and we must be absolutely sure that those rights can be genuinely be enforced if we are not to have an illusory system of protection. Opportunity, security and sustainability in work should be given as much priority as the creation of the job in the first place.
It is recognised that losing a job is a major cause of extreme pressure and stress in life. Many people who have lost their jobs have no discretionary income to speak of, and keeping a roof over their family’s heads and putting food on the table will always take priority over pursuing a claim, no matter how badly they have been treated. I am aware that there is a fee remission system, but let us not pretend that it is anything more than a fig leaf, because many people do not qualify for it. The average monthly take-home salary in this country is just under £1,800. Remission is not available to people on that salary, yet claimants are being asked to stump up two thirds of that amount to pursue a tribunal claim. It is simply unrealistic to expect them to do that, and I agree with Lord Dyson’s view that
“ordinary people on modest incomes” will
“inevitably be deterred from litigating.”
We have heard from the Chair of the Justice Committee, Robert Neill, about the recommendations in his report, so I will not repeat them, but it is quite remarkable that the Committee feels that it has been strung along by Ministers in relation to the outcome of the review of employment tribunal fees. The review was commissioned over a year ago and it has apparently been on the Minister’s desk for nine months. Having heard the Minister previously responsible for this area flounder in a Westminster Hall debate on this subject, I think it is pretty clear that the review has been sat on because the introduction of fees has been a disaster.
We know that this has been a disaster because the number of tribunal claims being lodged fell off a cliff following the introduction of fees in July 2013. Whatever comparisons are used, there has been a drop of around 70% on average in the number of claims lodged. Other Members have already mentioned the fact that the TUC and Unison provided statistics to the Select Committee comparing the number of cases brought in the first three months of 2013 with the number brought in the first three months of 2015. Those statistics showed that claims relating to the working time directive were down 78%, wages claims were down 56%, unfair dismissal claims were down 72%, equal pay claims were down 58%, breach of contract claims were down 75% and sex discrimination claims were down 68%. I am sure that the Government would like to claim that the success of the ACAS early conciliation scheme explains the drop, but that scheme was not in place for the period immediately after fees were introduced, and we know from an ACAS survey that at least 26% of claimants who did not progress their cases said that they did not do so because they found the fees off-putting. Lord Justice Underhill, referring to employment tribunals, has stated in the High Court:
“It is quite clear from the comparison between the number of claims brought in the ET before and after
Mr Djanogly suggested earlier that the introduction of loans to fund claims might be an option, but who is going to lend money to someone who has just lost their job? That is completely unrealistic. Substantial evidence was put to the Select Committee that fees were encouraging employers not to resolve disputes as they knew that many employees would not be able to find the fee to pursue their claim. This leaves us with unresolved complaints and unenforceable rights because of a Government policy that effectively rewards and encourages bad practice. The Committee reported that many judges say that they now hear no money claims at all. As my right hon. Friend Mr Hanson mentioned, the report states:
“Prior to the introduction of fees money claims were often brought by low paid workers in sectors such as care, security, hospitality or cleaning and the sums at stake were small in litigation terms but significant to the individual involved. There are few defences to such claims and they often succeeded.”
Like my right hon. Friend, I do not buy for a minute the idea that all those employers have suddenly changed their behaviour and everyone is being paid correctly. What is far more likely is that those whose wages are being docked are saying to themselves, “It will cost me more to go to a tribunal to recover the money than the amount that I have lost, so can I actually afford to challenge it?” The rules have a disproportionate impact on those whom employment laws are there to protect, whether those with the least resources or those who have been discriminated against in work. The current system gives employers an incentive not to respect such rights.
Employment tribunals play a vital role in ensuring that basic rights—such as the rights to a minimum wage, paid holidays and maternity leave, and the right not to be unfairly dismissed or discriminated against—are effective. Valuing those rights, such as they are, is not enough; the ease with which people are able to exercise them is just as important. They are not just about individual dignity and respect in the workplace. They bring important social and economic benefits to the country. They ensure that more people can participate in the labour market without facing unfair discrimination. They give vulnerable workers more job security and stability of income. They help to produce a committed and engaged workforce and encourage the retention of skilled workers, and they allow people to plan their lives and plan for a future, knowing that if they do a good job and their employers run their businesses well, they are likely to stay in work. What we have instead is a “hire and fire” culture, in which workers are seen as disposable commodities—figures on a spreadsheet—rather than people with real lives who actually matter.
It seems to me that the Government are incapable of recognising the importance of employment rights. As we enter a period of tremendous uncertainty with the fallout from Brexit, we need, now more than ever, a Labour Government to protect those whom we represent, and we must all reflect on how best to achieve that. Although I do not doubt that there will be differing views on the way ahead, I sincerely hope that all members of my party will agree that if we cannot unify and present ourselves as a serious Government in waiting, we cannot expect to do a single thing to reverse this contemptible, repugnant race to the bottom.
It is a pleasure to follow my hon. Friend Justin Madders, who knows far more about the issue of employment tribunals than I do. For understandable reasons, that issue has dominated the debate. I practised in the civil and criminal courts before I came here, but that seems some time ago now.
Let me begin by complimenting the Justice Committee, its Chair—Robert Neill, who spoke very persuasively today—and all its members, including my right hon. Friend Mr Hanson. It has produced a good report, which makes our task easier because we can endorse it and agree with its recommendations, many of which do not pull their punches with the Government. I might go further in some respects, but I suspect that it will be sufficient to ask the Minister to respond to the points made by the Committee. I trust that he will not simply say that matters will be dealt with in due course; I have become rather used to his saying that.
I apologise to those on both Front Benches for the fact that I may not be able to stay for the closing speeches. If I cannot, I will of course read the Minister’s comments assiduously tomorrow, as I always do. He has made some interesting speeches recently.
I have another reason for not saying much about the substantive issue. During the five years for which I held the shadow brief—until last year—I probably said everything that I wanted to say about courts and tribunal fees. However, unusually, I want to correct something that was said earlier by my hon. Friend Karl Turner. I did not take the view that fee increases should always be opposed. On the contrary, given the constraints on the public finances, and the particular pressures on the other parts of the Ministry of Justice budget—which are now coming to fruition in very unpleasant ways that affect the prison service and legal aid—I always took the view that fee increases were appropriate, and that full cost recovery, and in some cases more, could be justified on its merits, provided that it did not interfere detrimentally or substantially with access to justice.
That is where the Government have lost their way. In fact, they have lost their way rather more than that: they eventually began to introduce changes that were self-defeating, such as the criminal courts charge, and had to do a U-turn. The report criticises many elements of fees and charges, not just employment tribunal fees but civil fees, which have risen by up to 600%—that figure alone should have set alarm bells ringing—commercial fees, and the fees for divorce. Now there are proposals for an increase of up to 500% in immigration tribunal fees. Those increases will clearly not be affordable, especially in the light of a remission system that does not appear to function properly.
I think that many Members have concentrated on the issue of employment tribunal fees because we have had more time to experience it, and because there is something particularly insidious about the way in which the fees were introduced. They have led to a 70%—in some cases, an 80%—drop in the number of claims, which must have been the intention, because this does not represent a great saving of public finances. I think that the estimate is about £10 million a year, and although that is a substantial sum, it is not substantial in the context of the overall budget. The aim appears to be to restrict access in a way that some employers may find convenient, but people who are experiencing a time when they are vulnerable, have little money at their disposal, and face having to undergo what is, even at a tribunal, the intimidating process of putting their case forward will be easily put off. They do not need fees, and they certainly do not need fees at this level, to discourage them.
I do not want to take up too much time, so let me return to a point that I raised during the speech of the hon. Member for Bromley and Chislehurst. It is one of the few points on which I disagree with the Committee. It relates to Freedom of Information Act appeals from the Information Commissioner to the First-tier Tribunal. The Chair of the Committee was very kind in replying to my intervention. The Committee said that, according to the Independent Commission on Freedom of Information,
“'considerable resources and judicial time are being taken up by unmeritorious appeals’. It recommended that legislation should be introduced to remove the right of appeal to the First-tier Tribunal against an Information Commissioner decision”,
only allowing an appeal to the Upper Tribunal on a point of law. The report continues:
“This recommendation is under consideration by the Government. We see no reason to disagree with the Commission’s view.”
This is not really a criticism, but it appears that the Committee ticked a box because it had not received submissions. I accept, if that is what the Chair says, that it had not received submissions to the contrary, but the independent commission had certainly received many such submissions. It may well be that the Committee did not receive any because the impression given by the report was that it concerned levels of fees and charging rather than the existence of rights of appeal in themselves.
Let me return to what the commission said, and why the Committee may have been led into error. There appears to have been a simple confusion between unmeritorious appeals, which are weeded out—between January 2014 and March 2015, 10% cases were struck out for being unmeritorious—and unsuccessful appeals, which are very different. The Committee said that 79% of appeals to the First-tier Tribunal against the Information Commissioner were unsuccessful, but that means that more than 20% were successful.
In my experience—including my experience as a litigant: I have been a frequent user of the Freedom of Information Act, and have gone through all those stages, up to the First-tier Tribunal—it is an absolutely necessary safeguard. The Information Commissioner does a good job although he is under-resourced, and, generally speaking, the independent commission did not come up with the horrors that we all thought it was going to come up with, such as charging more, restricting access, or in other ways trying to discourage freedom of information requests. Nevertheless, the appeal to the First-tier Tribunal is an extremely important stage of the process.
Let me exemplify that by referring to some of the cases that have succeeded at that level in the past year. I am grateful to the News Media Association, a combination of the Newspaper Society and the Newspaper Publishers Association, which, understandably and for very good reasons, wishes to see this right of appeal. I am particularly grateful to the Campaign for Freedom of Information, led by the redoubtable Maurice Frankel, who has rung alarm bells on the issue.
Let me give half a dozen examples. The First-tier Tribunal ordered the Cabinet Office to release information about the adoption of the selection criteria for appointing members of the Chilcot inquiry. It told the Ministry of Defence that it was wrong to withhold information about its failure to warn soldiers that they will get a criminal record if convicted of minor disciplinary offences. It ordered the Department for Education to reveal payments to new sponsors taking over failing academy schools. It ordered the Cabinet Office to disclose documentation for the expenses, of up to £115,000 per annum each, claimed by four former Prime Ministers in connection with their public duties. It also ordered—the Minister will appreciate this one—the Ministry of Justice to identify landlords convicted of Housing Act 2004 offences for letting dangerous or grossly substandard accommodation. Those are just some examples from central Government; there are even more examples from the national health service and local government.
I ask the Chair of the Justice Committee, who is a fair and reasonable man, to reconsider the issue. I assure him that the bodies that I have mentioned will be delighted to supply him with a plethora of information, just as they provided such material to the Independent Commission on Freedom of Information, albeit in vain.
The Freedom of Information Act was one of the key pieces of legislation of the previous Labour Government. Like anything else, it can be open to abuse, but it is generally used well not only in individual instances, but in promoting good government. It is right that the Information Commissioner’s Office is independent, but the Information Commissioner does not always get everything right. A 20% success on appeal rate is good, and the role of the First-tier Tribunal is materially different from that of the Information Commissioner. It brings a judicial eye to proceedings and, from the results that we have seen, allows for fresh and fuller scrutiny.
I will end on that point so as not to take up any more time, but I hope that that single issue—I apologise for picking out what I think are the errors in the report and do not mean to obscure the many good things in it—will be reconsidered by both the Committee and the Government.
May I first agree with the deserved compliments to the Chair of the Justice Committee, Robert Neill, made by my hon. Friends the Members for Kingston upon Hull East (Karl Turner) and for Hammersmith (Andy Slaughter)? It has been a pleasure to serve on the Committee, which has been bipartisan and united in its conclusions.
The Government’s case for introducing fees was cost recovery, but with spend at £71.4 million and income at £9 million that has failed, and the goal was to reduce the number of vexatious claims, which I will address in more detail later. The issue for the Committee was whether fees have had an unacceptable impact on access to justice. The introduction of fees has led to an enormous and undisputed drop—approaching 70%—in the number of cases brought. It is well worth repeating what my right hon. Friend Mr Hanson said about single individual tribunal cases declining by some 67%, but I will not repeat all the figures. Cases brought by more than one person, or multiple claims, declined by 72%.
The Under-Secretary of State for Justice, Mr Vara, told the Committee that 83,000 early conciliation cases had been dealt with by ACAS in the year beginning April 2014 and that other factors may account for part of the reduction in the number of cases being brought. The evidence submitted to the Committee was that of the 60,800 early conciliation notifications made in the period from April to December 2014, 15% were settled and only 22% progressed to an employment tribunal. Some 63% of notifications—38,304—dropped off the radar. I put it to the Chamber that that was down to affordability.
Comparing the cases in the first three months of 2013 with those in the same period in 2015, the TUC and Unison, as referred to by my hon. Friend Justin Madders, found that the most common types of cases where access has been restricted since the introduction of fees were those relating to the working time directive, down 78%; unauthorised deductions from wages, down 56%; unfair dismissal, down 72%; equal pay, down 58%; breach of contract, down 75%; sex discrimination, down 68%; and pregnancy-related detriment or dismissal, down 40%. That is quite shameful in a democracy.
In an ACAS survey, 26% of claimants who did not progress their cases said they did not do so simply because they found the fees off-putting. Tribunal fees have the opposite effect to what the Government are saying. They do not encourage early conciliation because the employer has no incentive to settle in cases in which the claimant may have difficulty raising the tribunal fee. The Senior President of Tribunals said:
“The Council of Employment Judges and the leadership judges would all say that there is clear behavioural material as to the way in which respondents”— employers—
“are behaving. They are avoiding engagement in conciliation processes and waiting for the next fee to be paid, which means that settlement opportunities are lost.”
“You wait for the employee to pay a fee. Ultimately you want to call their bluff—are they prepared to put their money where their mouth is?—so you sit back and see whether they do it.”
In other words, they want cases to drop off.
The Law Society and the Police Action Lawyers Group claim that there is emerging evidence of people and employers hanging back, waiting to see whether a claim progresses before settling. There is little evidence to suggest that such claims are vexatious. In evidence to the Committee, the charity Working Families said that vexatious claims
“may be less than 5%, even less than 2%”.
The Senior President of Tribunals said that if the aim was to remove vexatious claims, one would have expected the success rate of claims to go up, but, in so far as there is any material available at the moment, the evidence is to the contrary. Not only have the success rate and the appeal rate not significantly changed, but the policy has failed to reduce the number of unmeritorious claims. The timing and scale of the immediate reduction following the introduction of fees leave us in no doubt that the clear majority of the decline is attributable to fees. The drop in tribunals was not predicted by the Government. Even when employment law changes are taken into account, as the Minister said in Committee, the drop was down to tribunal fees putting people off exercising their right. Again, affordability is the main issue. A limit is being placed on access to justice in employment cases for those who are most vulnerable in the system.
In evidence to the Committee, the chief executive of Thompsons Employment Solicitors said that Ministers are not clear about the purpose of the fees. Are they intended to fund the tribunal system? If the tribunal system is to be funded by users, it should be taken into account that employers are also users. If it is to deter claims, fees are not effective. The costs system present in other civil cases is a better method. If someone brings a claim that has no merit and is unsuccessful, the employer can apply for costs. There is simply no evidence that there are loads of vexatious claims in the system. If employers face vexatious claims and are properly advised, they will oppose them. If they succeed, they will apply for costs. That is the appropriate deterrent and it already exists.
Factors that need to be taken into account include: the effectiveness of fee remission, as mentioned by Victoria Prentis; the vulnerability of claimants and their means by comparison with respondents, which may pose particularly problems in respect of inequality of arms when individuals or small businesses are seeking to uphold their rights against the state or major companies; and the degree of choice litigants have in whether to use the courts to resolve their cases and achieve justice. There should be a clear and justifiable relationship in the fee system between those factors and the degree of financial risk litigants are asked to bear.
Where there is conflict between the objectives of achieving full cost recovery and preserving access to justice, access to justice must prevail. The Select Committee report recommendations are clear. First, the Government should publish the factual information collated as part of their post-implementation review. The goalposts have been moved four times and they should publish now, without further hesitation. Why has this information not been published? Secondly, the overall cost of tribunals must come down. Thirdly, the financial thresholds for fee remission must be increased, and only one application should be required, thereby aiding access to justice. Fourthly, the binary type A/type B distinction should be replaced by a fee system that is fair and does not preclude vulnerable people. Fifthly, further special consideration must be given to the position of women alleging maternity discrimination or pregnancy discrimination. Their savings to support their new born child or soon-to-be-born child might be being used as collateral towards industrial tribunal fees, thus affecting any remission, and that is off-putting.
I recognise that the Committee’s recommendations, put simply by me, would have cost implications for the Ministry of Justice, but we should note that an increase in the number of legitimate claims would in itself bring in additional fee income. I stress again that if there was a choice between income from fees and the preservation of access to justice, the latter must prevail. Indeed, as the Master of the Rolls reminded us in his evidence, the Lord Chancellor is required by statute to have regard to the necessity of maintaining access to justice.
I am grateful for the opportunity to speak in this debate, albeit at the last minute. I rise to speak having heard many of the statistics, which I still find shocking to hear, and I wish to give some personal reflection and context. My grandmother had many tall tales to tell when I was growing up, but one I always remember is the story of how she met my grandfather while working in munitions at the Rolls-Royce factory in Glasgow during the war. After the war, she went back to work to be a seamstress. When she got married and returned to work, she was “given her books”: her employment was terminated and she was unemployed. There were no tribunal fees in those days, and I often reflect on how we have come a long way, although not far enough.
Before I came to this place, I worked in the corporate sector for a number of years, where I managed a small team. A team member went on maternity leave as I started my employment, and just as she was coming back I was advised by the human resources department that if she took longer than nine months, I did not have to give her her job back—I just had to give her any job. I could not believe that. I found it incredible that someone senior—a marketing manager—was not allowed to get her job back. As a manager, I was put in the position of finding her any job.
This debate is about tribunal fees. They play a part here, but how we look at this is as much about company culture and our culture as a society. We also have to look at it in terms of the productivity gap, as I said in my intervention. We want to get people back to work and to encourage them. That is particularly true in the case of women, who are often marginalised, as so many of the reports have said. Having 400,000 women in this country experiencing discrimination in employment is not a mark of a modern or progressive society. Therefore, if we reduce people’s access to justice, it does not take us forward in any regard. The International Labour Organisation said in a 2014 report:
“Fathers undertaking a more active role in caregiving is likely to be one of the most significant social developments of the twenty-first century.”
This is therefore not just about women in the workplace and discrimination against them; it is also about men.
When the Equality and Human Rights Commission came to me a couple of weeks ago and talked me through some of the statistics and the issues relating to tribunal fees, I was staggered. I was told of the 56,000 women being put out of employment—that figure has been mentioned a number of times—and how 10% of mothers say that their employer discouraged them from attending antenatal appointments. We must get tougher. A number of Members from across the Chamber have legal backgrounds. There is a significant gap between people who are being discriminated against and the courts and the lawyers firms, which are undoubtedly making a significant amount of money out of cases.
Our courts are also being clogged up by cases that could be solved in other ways. I recently visited Australia, where I wanted to see how its small business commissioner operated by comparison with the legislation that has been introduced in this House. I found it incredible that Australia had a federal commissioner and individual state commissioners. They had developed a culture across Australia of resolving issues before they got to the courts, and that was very much welcomed by the legal profession. I wonder whether the Minister would consider that as a proposal and as something meriting further discussion: a commission with greater powers, sitting between the judiciary and businesses. There will have to be a carrot-and-stick approach at some point. I think of the number of times I have heard small and medium-sized enterprises saying, or people reporting, how they have had difficulties in supporting women or families through having children. We need to incentive small businesses, and individuals to start and develop their businesses. The fact of the matter is that women have children; we are not at the stage yet in genetics where men can carry children. We have to accept the fact that women are child bearers, and they bring so much to the economy and to our nations when they have children and continue on the next generation.
Some of the recommendations that Maternity Action made in its evidence to the Women and Equalities Commission were particularly interesting. They included having a single website and clear information for women who are going to be going on maternity leave or are thinking about having a family. There was disappointment about the withdrawal of the birth to five book and on the health and safety issue: the Government’s own research says that 41% of all pregnant women face health and safety risks being not properly managed by their employers. Those are damning statistics. We have to make business believe and understand that it is good for their them and for society for women to have flexible working, and the Government have to support that—it will not happen on its own.
In conclusion, we are a family of modern, progressive nations. Scotland is leading the way, in abolishing fees and giving access to justice. I hope that the Minister has an eye on the north and is taking notes.
I rise to speak as a member of the Justice Committee, whose report we are considering. I wish to add my hearty congratulations to our Chair, Robert Neill, on his brilliant opening statement; for a while, I thought that there was going to be nothing left for me to say, and I shall be brief as a result.
I also want to congratulate our new shadow Lord Chancellor, my hon. Friend Richard Burgon. [Interruption.] I see that the Lord Chancellor is not here—perhaps his mind is on other matters. What we are considering is far from what he is thinking about at the moment.
It is worth restating that, like all Select Committees, the Justice Committee is a majority Conservative Committee, but we were pretty unanimous in our conclusions on court and tribunal fees. As the Chair pointed out at the start of this debate, our inquiry included the criminal courts charge at the beginning. Our report on that voiced grave misgivings and recommended the abolition of that unfair charge as soon as possible, as it acts as a barrier to justice. Encouragingly, there has been action on that. We welcome the fact that the Government acted swiftly in response to our criticism. We now wish that history would repeat itself with the highly unpopular tribunal fees.
We still await the publication of the Government’s long-awaited post-implementation review of the impact of employment tribunal fees. That was announced in June 2015 and our Committee has called for this to happen urgently. We recommended that fees for employment tribunals be “substantially reduced”. However, the Opposition would go further and recommend abolition. I am proud to have stood on a manifesto at the last general election that urged abolition. I do not know what is in our next manifesto. Four years is a long way off, so I shall not get into Mystic Meg territory.
Ability to pay, or the thickness of the wodge in someone’s wallet, should not determine their access to justice. Fees should not be a barrier to those on low incomes bringing employment tribunal claims. That is what I want to address in this short contribution. It is a cause for concern that women in particular have been hard hit by employment tribunal fees, as shown by the fact that sex discrimination, pregnancy, maternity and equal pay claims have all fallen.
The austerity cuts have hit women hardest—some analyses show that 80% of all cuts hit women. That gives weight to the claim that the Prime Minister—he is still the Prime Minister, isn’t he, though not for that much longer—has a problem with women. It is interesting that the two main runners and riders to replace him are women. Let us see what the future brings.
The Justice Committee interviewed numerous witnesses. We had four evidence sessions, with 23 people appearing before us, and written submissions from 91 stakeholders ranging from pillars of the establishment, such as the Bar Council, to specialist pressure groups, including the self-explanatory Pregnant Then Screwed—that is its name.
Maternity Action gave evidence of maternity discrimination and found that on pregnancy discrimination in particular there has been a fall of 40% in the number of claims in the immediate aftermath of the introduction of fees—40% down. That is nearly half. The group’s figures from 2005 suggest that less than 10% of women suffering pregnancy and maternity discrimination would present themselves anyway, for fear of repercussions.
The Under-Secretary of State for Justice, Mr Vara, who is a pleasant chap, and who is here now, told us repeatedly that ACAS has reported an upsurge in people presenting themselves there. The figure of 84,000 extra cases for ACAS was mentioned. That is not a way to bat away the issue. We identified a number of problems. Part of the justification for the introduction of fees was to recover costs, but in both employment tribunals and the immigration and asylum chamber there has been a massive mismatch between costs and recovery. The costs recovered have fallen far short of what was projected. According to the Courts and Tribunals Service’s annual report for 2014-15, the cost recovery target for employment tribunal fees was set at around 33%. Only 17% has been achieved. For the immigration and asylum chamber, recovery was projected to be around 25%, but in reality it has been a measly 9%.
To add insult to injury, the latest accounts from the Ministry of Justice show that in 2014-15 net income from employment tribunal fees was £9 million, whereas expenditure on the service was £71.4 million. That is a poor ratio. The fees make bad business sense. Just 12.5% of the costs were recovered, at a time of fiscal belt-tightening, when we should justify every pound of public expenditure.
We received evidence from the TUC and Thompsons, the trade union solicitors, that fees have decreased employer engagement with early conciliation. Fees act as a disincentive because people wait to see whether the other side can afford them. If not, there is no point in the public policy initiative to settle before the case gets to the courtroom door.
My hon. Friend Andy Slaughter talked about claims without merit. I will not go into that, as I said I would be brief.
The Government’s policies have impacted on access to justice in a number of ways. Employment tribunal fees were introduced not in a vacuum, but against a background of measures such as the civil court fee increases, legal aid cuts, restrictions on judicial review, the Trade Union Bill, and the proposal to repeal the Human Rights Act. Some Ministers have mooted leaving the European convention on human rights. In our opinion, the cumulative effect of all these things is chipping away at access to justice.
I am a member of Unison, which has said:
“Over the last three years tribunal fees have prevented many people who have been wronged at work from taking their employers to court.
Unscrupulous bosses can hardly believe their luck. They can pretty much treat their staff as badly as they choose, safe in the knowledge they are never likely to be taken to a tribunal.”
Unison is mounting a legal challenge, which is due to be heard at the Supreme Court later this year. Other stakeholders have voiced similarly damning criticisms. The Bar Council called it “a shot in the dark”. Citizens Advice highlights the anomaly whereby the fees are higher than the sum claimed, so they make no business sense. The Law Society talks of “treating justice like a commodity”.
Our report says that
“the overall quantum of fees charged for bringing cases to employment tribunals should be substantially reduced”.
I say they should be completely abolished. In the words of the report,
“further special consideration should be given to the position of women alleging maternity or pregnancy discrimination.”
I would drink to that any day.
I agree with the report’s finding that
“the increase in the divorce petition fee, from £410 to £550, be rescinded”,
and that the review of the employment tribunal fees needs to be published before the Government steam ahead with the hare-brained mistaken aim of full costs recovery in the immigration and asylum chamber. There are more holes in these policies than in a colander—tribunal fees preventing access to justice and trampling on employment rights, the reduction in sex discrimination and equal pay claims at the employment tribunal, and the delayed publication of the review of employment tribunal fees. We should be increasing access to justice, not restricting it, particularly at a time of austerity.
I shall focus on three key points that are essential to this debate—the fundamental principle of access to justice, the clear fact that the introduction of fees is a barrier for women who are pregnant or experiencing maternity discrimination, and the post-implementation review of the introduction of tribunal fees. I am sure the Minister will pay close attention.
Employment tribunal fees have been mentioned by many hon. Members primarily because 54,000 women are forced out of their workplace every day by discrimination. If there was a need for evidence that the tribunal fees system is not working, that is it. Since the introduction of employment tribunal fees in 2013, there has been a 76% decline in the number of tribunal fee claims.
I will dispense with statistics for now and highlight some of the reasons employment tribunals exist. They are intended to assist not just women, but any worker who faces unfair dismissal or discrimination in their workplace. Such pressures are compounded by the fact that those people are often the most vulnerable in society. Despite many calls from across the Opposition Benches, I suspect that the Minister is not listening to any of the arguments that have been made thus far about employment tribunal fees being tantamount to a barrier to access to justice. They compound discrimination against women, in particular in maternity discrimination cases, but they can affect all workers.
We have heard from trade unions about when these issues compound the experiences faced by many workers. The trade unions have focused particularly on those on zero-hours contracts, who are offered little or no job security. If they bring a challenge against their employer, they may have no further work and no further hours, so they will not be able to put food on the table to feed their families. Unfair dismissal therefore affects not just women but many workers across the spectrum.
ACAS—the institution the Government proudly highlight as the main arbitrator in this—has indicated that 26% of people simply did not progress a claim, because the tribunal fees put them off. If their own statistics are not enough to tell Ministers the system is not working, I do not know what is.
Working Families has highlighted that there is a growing category of rogue employers—something the Government have not seen fit to address. Siobhan Endean, from the Unite trade union, has indicated that employers are confident that claims will not go to a tribunal, because people cannot afford the basic £1,200 fee that would be imposed on them to implement proceedings in the first place.
The Equality and Human Rights Commission has rightly highlighted the severe impact on women. Its review was done in conjunction with the Department for Business, Innovation and Skills, so the Ministers have further statistical evidence that their tribunal fees system is not working.
Some 77% of people have experienced negative or potentially discriminatory practices in their workplace. There has been a 76% decrease in the number of people who have gone to tribunals. As one of my colleagues said earlier, that cannot be attributed merely to vexatious or unmeritorious claims—it is clearly because the fees are a barrier. I cannot emphasise that enough.
The Women and Equalities Committee conducted a review of pregnancy and maternity discrimination issues, and one of our key findings was that the three-month time limit is insufficient. It is probably the furthest thing from a pregnant woman’s mind to start filing a claim against her employer. However, even if the time limit were extended to six months, the bottom line is that it would be completely impractical for any woman who has just had a child or who is pregnant to go through this procedure.
Joeli Brearley, from Pregnant Then Screwed, said she was unable to pursue justice, because she was pregnant and was informed that going ahead would be stressful and have a negative impact on the birth of her child. That is the reality for many women. Why will the Government not understand the simple fact that three months is insufficient for women who are pregnant and who have experienced discrimination in the workplace? They simply cannot access the justice they deserve. I hope the Minister will give that point about the time limits due consideration, because it is absolutely pertinent.
When the Committee visited Portsmouth, women told us they are subject to harassment and bullying and are refused time off for antenatal classes. Maternity Action highlighted the fact that the overwhelming majority of women simply cannot afford tribunal fees. Aside from fully abolishing or hugely reducing fees—I understand that the Justice Committee reports suggests that—simply increasing the time limit would make a sizeable difference to the number of women who can progress claims. I sincerely hope that Ministers will bear that in mind.
The fact is that less than 1% of maternity discrimination claims proceed to tribunal. That means that 99 out of every 100 women who experience discrimination have no legal redress whatever. With the greatest respect, therefore, I am going to quote the Under-Secretary of State for Justice, Mr Vara. A few months ago, I asked him whether he would continue to defend the introduction of tribunal fees—I suspect they are a means to eliminate the budget deficit, but they also fail to address the fundamental principle of access to justice. You said we require “a responsible approach” to funding services, so I am going to ask him a few questions. Is it responsible to allow people to be put out of work? Is it responsible to allow rogue employers to act as they wish, regardless of employment law? Does the knock-on impact on economic growth really help to redress or reduce the budget deficit?
I think I have clearly made my three points. One was about the fundamental principle of access to justice. One was about the time limit, and the potential to increase it from three months to six months, as recommended by the Maternity Action Group, Pregnant Then Screwed and many other organisations. I have also outlined to you—
Order. I have let this go a few times. When the hon. Lady says “you”, she is addressing the Chair. Could she refer to “the Minister” or “the hon. Gentleman”?
The conclusion I would like to draw is that the introduction of fees is a fundamental barrier to access to justice for not only women but all workers. The simple fact is that the time limit could be extended, and that should readily be considered. I hope the Government will do that. Ultimately, I would call for the outright abolition of tribunal fees, because there is no statistical evidence to suggest that they have decreased the number of vexatious or unmeritorious claims; all they have done is limit the number of women, in particular, who can bring claims. If the Government will not commit to abolishing fees, will they at the very least consider the Justice Committee’s recommendation of a significant reduction? However, I and my SNP colleagues would call for them to consider outright abolition. The First Minister said that when this area of law is devolved to Scotland, we will abolish tribunal fees if it is possible to do so. Will this Government make the same commitment for workers across the UK?
The Minister proves my point: budget deficit reduction should never come above access to justice.
With no financial penalty, Scottish women may soon face fewer barriers when they exercise their employment rights and seek access to justice. The same may not be said for other women across the UK. It is time for someone to stand up for hard-working women and other workers across this country and to demand equal access to justice for everyone across the UK. Women have waited three years for the post-implementation review of tribunal fees. Should they have to wait another three years for the Government to clear their debts and to consider this issues seriously? Ultimately, access to justice is the fundamental principle at stake here. I hope the Government will hear my questions and answer them.
It is a pleasure to respond for the Opposition. I am following in the footsteps of a very learned gentleman: Baron Falconer of Thoroton. In terms of my legal career, I am not quite so learned. Before I was elected to represent my constituents, I was a lawyer for 10 years in my home city of Leeds. In eight years as an employment lawyer, I saw—like my hon. Friend Justin Madders—many changes to employment law. As an employment lawyer, I was angry at what the introduction of employment tribunal fees in 2011 did to access to justice. Today, I am here at the Dispatch Box to speak up for all those whose access to justice has been deliberately obstructed by this Government and the coalition Government who preceded them.
I want to share with hon. Members my memory of the first time I lodged an employment tribunal claim after the introduction of employment tribunal fees in 2011. I was shocked and saddened to see the following words appear on the computer screen: “Customer, please enter your credit card details”. That made me sick to my stomach. Are we saying that people attempting to assert their statutory rights, such as the statutory right to be paid the national minimum wage and the statutory right not to be discriminated against at work on grounds of gender, sexuality, religious belief or disability, are reduced to being consumers or customers?
I will not be giving way because there is limited time and I want to give the Minister as much time as possible to answer.
Are we saying that these people are reduced to being customers? In fact, they should be viewed as citizens trying to assert their statutory rights and to seek justice. [Interruption.] Mr Djanogly is annoyed, but not as annoyed as many across the country who have seen their access to justice so unnecessarily restricted.
The Select Committee’s report, which I commend, recommends that
“the overall quantum of fees charged for bringing cases to employment tribunals should be substantially reduced” and that
“the Ministry…should introduce a system for regular rerating of remission thresholds to take account of inflation”.
I think, as do plenty of people outside this place, that we need to go further than that, but the report is nevertheless to be commended.
We have heard excellent contributions to this debate from hon. Members on both sides of the House. I particularly welcome the opening speech by Robert Neill, who is Chair of the Justice Committee, which, as he explained, unanimously supported the report’s recommendations. In response to a point made by my hon. Friend Andy Slaughter, we do recognise the concerns of the Campaign for Freedom of Information.
How can it be disputed, after what we have heard today, that access to justice has been harmed, not helped, by this Government and their coalition predecessor? Many of us know of this from our own experience as MPs, with our constituency advice sessions overflowing with people who do not know where to turn when they cannot access or afford legal advice or legal representation. Legal aid has been attacked, employment tribunal fees have been introduced, and fees are being increased in divorce proceedings and in immigration and asylum cases. As my hon. Friend Marie Rimmer explained, these fees risk dissuading people from litigating at all, and, as my hon. Friend Dawn Butler indicated, they have a discriminatory impact.
The Select Committee is right to be concerned about the effect of court and tribunal fees on women in particular. The increase in the divorce petition fee from £410 to £500 disproportionally hits women, who are the vast majority of divorce petitioners. Why should the Government be increasing what could be termed a “divorce tax” on people, including women, who have suffered domestic violence or emotional abuse? Why are the Government charging more for a divorce petition than it costs to process it? Should the state really be making money from people’s misery? What have people bringing cases in the immigration and asylum chambers done to deserve a proposed 600% increase in fees? This is an attack on some of our society’s most vulnerable people—those seeking asylum. As we heard here last week, this takes place against a backdrop of growing attacks on people who are perceived to be migrants.
Let me turn to the Select Committee’s concerns about employment tribunal fees. The report quotes from the Odysseus Trust, which describes tribunal fees as
“a tax on justice imposed to enable HM Treasury to profit from people seeking to enforce their legal rights”.
The same paragraph quotes the organisation, Working Families, which says that
“these fees imperil the rule of law.”
That is also the view of legal experts. The Select Committee heard from Jonathan Smithers, the president of the Law Society, who said that there was the possibility of
“a two-tier justice system for the rich and the poor” and that any increase in fees will militate for that rather than against it. Chantal-Aimée Doerries, chair of the Bar Council, said:
“Our members who practise in the employment tribunals have very much formed the conclusion that the challenge at the moment is the level of fees in terms of access.”
The Select Committee concluded, and I hope that the whole House weighs these words very carefully:
“Where there is conflict between the objectives of achieving cost-recovery and preserving access to justice, the latter objective must prevail.”
I could not agree more.
Employment tribunal fees have cut access to justice. As we have heard, there has been a 70% or so reduction in employment tribunal cases being brought. Cases on unauthorised deductions from wages are down by 56%. Cases on unfair dismissal are down by 72%. Cases on equal pay are down by 58%. Cases on sex discrimination are down by 68%, and cases on race discrimination are down by 60%. As my right hon. Friend Mr Hanson observed so effectively, is anybody seriously arguing that this drop in the number of claims being brought means that there has been a sudden damascene conversion of all the employers in the country and that bad treatment has been abolished and consigned to the history books? Of course not; it is just that claims are not being brought. We must remember the deterrent factor. Employment tribunal claims do not just help those who bring them; they also help those who would never dream of doing so. The possibility of the claim being brought acts as a deterrent against employers engaging in bad and discriminatory behaviour.
The true nature of the remission system must be discussed. I remember, when I was an employment lawyer, helping people to fill in the remission fees forms and watching them do so, with the amount of humiliating detail they are expected to go into in providing so many bank statements and all their other details. I remember getting documents back from the employment tribunals service where people had highlighted in yellow on someone’s bank statement the fact that they had had £12 transferred into their bank account by a relative and asked them to explain what this money was for, where it had come from, and why. Unison is correct to say that the remission system is not working. Unison argues that the equality impact assessment of July 2012, before the introduction of fees, said that it was expected that 23.9% of claimants would benefit from full remission and 53% of claimants would benefit from the variable discounts on fee rates up to £950, but the actual figures suggest that only 3.87% of claimants benefit from any remission. That is shocking.
With these statistics in mind, I welcome the Select Committee’s criticism of the Ministry for failing to publish the review on the impact of employment tribunal fees. The Select Committee said:
“On the basis of…evidence to us on
It also said:
“We have not appreciated being strung along in this fashion”,
and that it is “unacceptable” that it remains unpublished six months later. Who would not agree with that when ordinary people continue to miss out on justice? It is therefore welcome that as well as the pressure brought to bear by the Select Committee’s report we continue to see a legal challenge to employment tribunal fees by the trade union Unison, which has now taken its case to the Supreme Court, as my hon. Friend Karl Turner mentioned.
I would like to say more, but I wish to give the Minister an opportunity to address some of the concerns that I and others have outlined today. I reiterate my support for the Select Committee’s request that the Government publish their review on the impact of tribunal fees and reconsider their approach of treating court users as customers.
“It is a Bill which will open the doors of the courts freely to all persons who may wish to avail themselves of British justice without regard to the question of their wealth or ability to pay…indeed, going back further to the time when Magna Charta decreed that: ‘To no one will we sell, deny, or delay right or justice.’—it is an interesting historical reflection that our legal system, admirable though it is, has always been in many respects open to, and it has received, grave criticisms on account of the fact that its benefits were only fully available to those who had purses sufficiently long to pay for them.”—[Official Report,
Vol. 459, c. 1221.]
Nobody could put it better or advocate those principles more effectively, but regrettably they are up for debate again.
This is an estimates day debate. I can make it clear now, with no ifs or buts, that a Labour Government, with my right hon. Friend Jeremy Corbyn as Prime Minister, will abolish employment tribunal fees and pursue the principle of access to justice for all. The usual convention is not to vote on estimates day. However, such is the strength of feeling in the parliamentary Labour party that we will vote against this motion on a point of principle.
I congratulate the shadow Justice Secretary, Richard Burgon, on his new position and welcome him to the Opposition Front Bench. I pay tribute to the work of Andy Slaughter, who held our feet to the fire assiduously over many weeks and who I am sure will continue to do so from the Back Benches?
I also thank my hon. Friend Robert Neill for his Committee’s important report and work on court and tribunal fees and charges, and hon. Members from across the House for their invaluable contributions to this debate. The Government will respond to the Committee’s report in due course, but I welcome this opportunity to address some of the issues it raised. I will try to respond to as many as is practical in the time allocated.
As hon. Members will appreciate, the principal reason for raising fees is financial—there is no getting away from that. The shadow Justice Secretary said that he would get rid of all the fees. He was a little thin on how he would pay for them, but perhaps that does not matter too much to the Labour party. The raw truth is that the Ministry of Justice is not a protected Department. We have a very challenging financial settlement, so we must reduce its annual spending by 15% in real terms, which means about £1 billion in cash terms by 2019-20.
It is worth remembering that this is not just about cuts; we are also committed to this approach precisely so that we can invest £1.3 billion to modernise our prisons, and more than £700 million to transform our court system. Achieving those dual financial objectives inevitably requires difficult decisions. There is no ducking them. We have to look at every area of the Department’s finances, and I am afraid that there can be no exceptions for the courts.
To ensure that the courts and tribunals are properly funded, and access to justice is properly protected, increases to court fees will be necessary. The cost of our courts and tribunal system to the taxpayer is unsustainably high, and it is only right that those who use the system pay more to balance that burden with the taxpayer.
In coming to that conclusion, has the Department carried out research into or a survey on the costs to the court system of delays caused by persons appearing unrepresented as litigants? Should not that also be taken into account as part of the equation? What data does the Minister have?
My hon. Friend raises a perfectly legitimate point. If he is willing to be patient, I will write to him with any precise details that I have.
In its report, the Committee accepts the principle of charging court users a contribution towards the cost of operating our courts. Whatever the specifics, I think that that principle is accepted. It is a question of balance between taxpayer subsidisation and user pay. I welcome the Committee’s finding in that regard.
Under the Treasury’s “Managing public money” rules, fees for public services should usually be set at a level designed to meet the cost of those services. However, Parliament has granted, through the Anti-social Behaviour, Crime and Policing Act 2014, a power that allows the Government to set court and tribunal fees at a level above the cost of the service. The income from those fees must be used to fund an efficient and effective system of courts and tribunals. When setting these fees, the Lord Chancellor must have regard to a number of factors, including the need to preserve access to justice. I assure hon. Members that we take that requirement seriously. The idea that somehow a profit is being made is not accurate according to the law, let alone the practice.
I will now turn to the specifics of employment tribunals. I appreciate the concerns expressed both by the Committee and by hon. Members across the aisles. Those who have spoken today have mentioned in particular the impact of fees on employment tribunals. When fees were introduced, there were three main objectives. The first was to transfer a proportion of the cost of the tribunal from the taxpayer to those who use it, where they can afford to pay. The second was to encourage people to consider other ways of resolving disputes, in particular the ACAS conciliation services, which are provided free of charge. There has been virtually no mention of them in this debate. The third objective was to protect access to justice. I do not think that anyone could disagree that those are legitimate aims to pursue.
The main concern about employment tribunal fees has been the large fall in the number of claims immediately after fees were introduced, but it is not that surprising that the volume of claims has fallen. It is obvious that more people will use a service if it is free than if they have to pay to use it. It is also worth reminding hon. Members across the House of a few key facts. First, help is available for those who cannot afford to pay, through fee remissions. Under that scheme, someone who is eligible for help may have the fee waived either in part or in full. We have taken steps to make sure that more people are aware of the help available, and that has led to a marked increase in take-up under the scheme.
Secondly, and crucially, the introduction of the ACAS early mandatory conciliation service has been a success, with more than 83,000 people referring their disputes to ACAS in the first year. As many people are using the ACAS conciliation service now as were previously referring their disputes to the ACAS voluntary service and the employment tribunals combined. That is important, regardless of whether the dispute ends up with a meritorious claim succeeding; it is valuable that potentially divisive disputes can be settled in that way.
I will come on to that, if the right hon. Gentleman will bear with me for a few moments, because there are a lot of other points to get through. The point—this has been missed almost entirely in the debate—is that we are seeing the right kind of behavioural change.
Thirdly, the tribunal has the power to order the respondent to reimburse the claimant with his or her fee, if the claim is successful. Finally, on top of that, the Lord Chancellor has an additional power to remit fees where there are exceptional circumstances.
I appreciate that the Committee and hon. Members have not been shy in criticising the delay in completing the review. It is true that when we announced the review in June last year, we had hoped to finalise it by the end of the year. That simply was not possible and it is clearly important that we take time to carefully consider all the relevant material. It is regrettable that it has taken longer than planned, and I am sorry about that. I have looked into the situation and we will get the response published as soon as possible.
In our evidence to the Committee, however, we made it clear that, while we hoped that the review would be completed swiftly, we could not give a firm commitment on timing. I reassure hon. Members and the Chair of the Committee that the review is very close to completion, so I hope to be able to make an announcement in the near future.
I thank the Select Committee Chairman, who is being as tenacious and assiduous as ever. We are in a position to make the announcement in the near future. I do not think it is right to split the evidence and our response to it. Hon. Members in this House and the public expect us, when we produce the evidence, to be able to say what we think about it. If he is patient with us, he will get both in reasonably short order. On top of the apology that I have already given, I want to make it clear that it will be coming as soon as is practicable.
I am going to make a bit more progress. I have been given some time, and I have given way to hon. Members from across the House. If towards the end I have got time, I would be happy to take the hon. Lady’s intervention.
I turn to divorce fees, about which hon. Members have made some important points. The Justice Committee criticised the recent increase in the fee for divorce to £550, primarily because of the risk to vulnerable women. The Government have sought to make sure that vulnerable women are protected within the divorce fees scheme. Although it is true—this point has been made—that more women than men petition for divorce, it is also true, although it was rather neglected in this debate, that women are more likely to qualify for a fee remission. In the circumstances of a divorce or any other matter where the parties have conflicting interests in proceedings, the applicant is assessed on his or her own means, rather than on those of the household. For victims of domestic violence, the first priority is to ensure the victim’s safety. There is no court fee for an application for a non-molestation order or any applications in relation to one.
I turn to money claims. There has been criticism of the introduction of enhanced fees for money claims in March 2015, and some criticism of the quality of the research that supported those increases. We have said all along that we took the decisions that we did based on the best evidence available at the time. As things have turned out, the impact of those fee increases on the volume of claims has been greater than we thought. It is easy to be wise in hindsight, and we are investigating the reasons, but in the meantime we have decided not to implement the further increases we proposed. But given the very challenging financial circumstances, we have been clear—I want to be honest with the Chair of the Select Committee and hon. Members—that we may need to come back to those and look at them again when we have got a better understanding of the specific impacts.
There have been criticisms of our proposals to raise the fee in immigration tribunals to full cost levels. We estimate that those proposals would generate about £35 million a year in additional income. The normal policy over many years has been to charge fees at full cost unless there are good reasons not to. I do not see, given the remissions and the other flexibility, why the taxpayer should foot the bill in this case. We are currently considering in detail the responses to the consultation. Under our proposals, certain types of appeal would continue to be exempt from fees; we are talking about vulnerable people who need such flexibility the most. People receiving means-tested benefits, such as asylum support, would continue to have fees waived. We sought views on further exemptions, and specifically on whether we should exempt people in receipt of a Home Office destitution waiver. We are making sure that, notwithstanding the difficulty of the decisions, the most vulnerable are protected.
Meeting the challenges ahead cannot just be about increasing fees. That is why we recognise the need to invest in the courts and tribunals so that they are lean, efficient and fit to serve a modern, digital society. In the spending review, we announced that we would be investing, as I have said, more than £700 million to transform our courts and tribunals system. The scale of that investment and the ambition of our reform plans will enable us to build a justice system that is simpler, swifter and more efficient, because it takes better advantage of modern technology.
Other points and criticisms have been made. We take them on board, and we will respond to them fully in due course. We also need to have a sense of realism. Given the financial situation that we are still grappling with, fees are a critical part of the Ministry of Justice’s plans to meet our spending review challenges.
My understanding, off the top of my head, is that it was £71 million. I will come back to the hon. Lady if I find out that that is incorrect.
The truth is that we cannot afford to duck these decisions around fees if we want to secure the long-term funding of the courts and the tribunals and deliver on the mandate on which the Government were elected. It is all very well for the Opposition to say that they want to scrap every fee that has been imposed or duck every difficult decision, but unless they can explain to the House how that will be paid for or the impact that it will have on our economy, it is not the responsible thing to do.
I am going to finish, because of the second debate. Fee increases are never popular, but at every stage we have made it clear that we intend to protect the most vulnerable and make sure that those who cannot pay do not have to do so. We continue to consider carefully all the detailed points and recommendations made by the Select Committee, and we will publish our response later this year.
With the leave of the House, I will briefly respond to the debate. It has been a thoughtful debate, and I am grateful to Members from all parts of the House who have contributed. There is not time for me to refer to every hon. and right hon. Member who has contributed, but I am especially grateful to members of the Select Committee from both sides of the House who have contributed to the debate for the work that they have done. It is also right for me to say that I am grateful to the Committee staff for the work that they have put into preparing the report. I congratulate Richard Burgon on his appointment to the post of shadow Justice Secretary, and I wish him a long tenure of office, if that is a wise thing to do, one way or the other.
I appreciate the Minister’s response. I may continue to press further, but I take him at his word, because he and his fellow Ministers have always been entirely straight in their dealings with us. I hear his word that we will have the response soon, and I cannot stress enough how important that is. I am grateful that he is not proceeding immediately with the divorce fee increases. I hope that we will be able to persuade him that that should not happen at all, but I will take whatever is available. I appreciate that this is a detailed matter, and I hope that we can go forward with more detail in due course. I must confess that I do not think that this issue will be solved constructively by voting against the estimates in a symbolic fashion, but that is a matter for individual Members to decide. I am grateful for the House’s time and the consideration that Members have given to the report.
Question deferred (