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29 December 2014
Legal challenge

Legal challenge

New legal challenge, same result. That was the outcome this month as Unison’s second application for a judicial review into the legality of employment tribunal fees was dismissed by the High Court in London. Without concrete real-life examples of claimants effectively being denied access to justice due to the cost of litigation, Lord Justice Elias and Mr Justice Foskett refused to back the trade union’s bid. That said, unquestionably, the number of claims lodged in employment tribunals has plummeted since fees were first introduced in July last year.     

Eradicating spurious claims and strengthening parties’ motivation to seek alternatives, such as mediation, to drawn-out workplace disputes were the intentions. The Institute of Directors, for instance, called fees a “sensible way to weed out weak or vexatious claims” given fewer than one in ten tribunal cases against its members was won by the claimant prior to the shake-up. However, trade unions have railed against a system that Unite general secretary Len McCluskey claimed saw a “worker-bashing government” taking “a sledgehammer to workers’ rights”. 

Type A claims, which tend to be more straightforward and include the likes of unpaid wages, redundancy payments and refusal to allow time off, now carry a fee of £160 to lodge the claim and a further fee of £230 if a hearing is necessary. Type B claims, which stray into unfair dismissal and discrimination complaints, generate an initial fee of £250 and a further hearing fee of £950. A remission scheme was also established, the intention being to reduce or remove the fee entirely for some individuals who are receiving particular benefits or whose incomes fall below a certain level. Between 29 July and 31 December last year, just under a quarter of such applications were accepted, amounting to 5.5 per cent of cases brought.

“For employment tribunals, it is having a real impact on people who were on a low wage to begin with and they take another job to pay the bills so they don’t qualify for remission and feel that it is just not worth it to pay out the money when there is no guarantee that they’re going to get anything back at the end of it,” says Lauren Wood, access to justice policy officer at Citizens Advice Scotland. “That’s a real worry in terms of access to justice. It is that value judgment about whether to bother – it should never come down to that.” 

Given a study commissioned by the Department for Business, Innovation and Skills last year found less than half of successful claimants had been paid in full with more than a third not receiving any money at all, a number of individuals simply cannot afford to take the risk, claims Wood. “Year on year what we’re seeing is that the level of advice given by Citizens Advice Bureaux across Scotland has remained static so actually, people have no fewer employment issues, that’s for sure, but what has changed is people challenging those issues,” says Wood. Joint research by CAS and the University of Strathclyde – likely to be published in February – will look at the impact of employment tribunal changes on clients in much more detail, asking specialist employment advisers what they are coming across. “It backs up a lot of the things that we’re already finding, so people are having problems but they’re just not able to take them forward,” adds Wood. 

The Law Society of Scotland wrote to Justice Secretary Chris Grayling as well as the then Cabinet Secretary for Justice, Kenny MacAskill, in July calling for an urgent review after the number of claims fell substantially against a backdrop of members’ concerns. “You can define poverty [as] having nothing, but you can even look at it in business terms,” says Stuart Naismith, convener of the Law Society’s access to justice committee. 

“Never mind nothing in the balance sheet, that’s one thing; the employment tribunal thing is your profit and loss account, this is your daily cash flow. When you lose your job and you have zero income, you are immediately poor. I’m not saying you’re poor relative to overall definitions of poverty but you are income poor instantaneously and it may be unlawful that that’s happened. You must have access to put that right. That’s where the case fees comes in. If you’ve no money to buy your tea this week, you’ve no money to pay a £250 lodging an application fee.”

That could, however, be about to change in light of calls by the Smith Commission to devolve “all powers over the management and operation of all reserved tribunals” – that is, UK-wide tribunals that were outside the scope of this year’s Tribunals (Scotland) Bill – to the Scottish Parliament. “What we would certainly hope is that when it comes, then the fees are abolished with it,” says Wood. “There is no doubt that the fees have been an increased barrier in what was before, and still is, quite a complex system.” 

Though devolution does present “a lot of opportunity”, Wood underlines the uncertainty that persists over when that might happen and exactly what powers will be transferred. For instance, Pinsent Masons employment law specialist, James Cran, has warned different fee structures either side of the border could prompt so-called “forum shopping”, whereby workers based elsewhere in the UK seek to bring a case before a tribunal in Scotland – if their company has operations this side of the border – to avoid paying a fee. 

Naismith’s instincts tell him ministers at Holyrood would have “sympathy” with the case for abolition of fees, more so than their colleagues in the Ministry of Justice. “They’re a travesty and the effect is already to compromise employees’ rights,” he claims. “Employers are much faster to fire people now; they don’t need to worry about it [as] no employee is going to pay £1,200 to take a tribunal case.”

While legal aid is still available in Scotland for employment law – unlike in England and Wales where it was withdrawn 18 months ago – it is “not a big player in this field”, according to Naismith. “In reality, although legal aid is technically available, almost no solicitor will do it under legal aid,” he claims. “Typically, they’re capped – you can only get a couple of hundred quid. You’re not going to go away for a three-day employment tribunal for that.” 

Figures for 2012-13 put the number of employment tribunal cases accessing legal aid for representation – otherwise known as ABWOR – at 212, with trade union funding or solicitors operating on a contingency fee basis said to be responsible for a much larger proportion. Those cases tapping into civil advice and assistance for employment matters is much higher, at 1,857, a fraction of that which is provided, claims Naismith, given the “major bureaucratic exercise” involved leads many solicitors to simply provide a client with advice and not fill out a legal aid form.     

It’s no secret that the legal aid budget in Scotland is under some strain. The Scottish Legal Aid Board’s (SLAB) latest annual report shows total expenditure on legal assistance last year was £12.4m higher than the Scottish Government had initially set aside, forcing ministers to allocate an additional £10m-plus given demand must be met. Further gaps are forecast for this financial year and the next. Against this backdrop, SLAB has attempted to embrace a more preventative approach. Their first grant funding programme, focused on helping mitigate the effects of the economic downturn, considered projects that offered money advice to individuals in court due to rent arrears that had resulted in repossession or eviction proceedings. Their latest, the Tackling Money Worries Programme, funded 16 projects from October and focused particularly on families with children at risk of problem debt due to sudden changes in circumstances, such as divorce, birth, or the involvement of a family member in the criminal justice system. 

“Part of the idea [is] that by addressing things at an early stage you’ve not got people who are then being taken to court and require more intensive interventions at that stage,” says SLAB director of policy and development, Colin Lancaster. “So there are economic benefits from getting those things dealt with early on but obviously there are social benefits as well [in that] you’ve got people who, if they live with these problems over an extended period of time, that can have a significant impact on their mental and emotional wellbeing.”        

Reforms to both civil and criminal legal aid in England and Wales, as part of efforts to bring the annual budget of £2.1bn down, has prompted a significant backlash. Last month, the National Audit Office warned the UK Government failed to “think through” its legal aid cuts soon enough and “does not know” whether people in need of assistance are receiving it after a range of civil cases, including most family, debt, housing, employment and social welfare cases, were disqualified. “Broad-brush measures, like we’ve seen in England and Wales in terms of taking whole areas out of scope, that’s not what this government has previously said it wants to do and we’re fully supportive of that approach,” Lancaster tells Holyrood. “We don’t think that’s necessary and we think that there is a lot of baby that can be thrown out with that bathwater. 

“Our position remains [that] it’s far better to look more closely in detail at how different things are delivered and whether there are efficiencies that can be introduced into that, focusing on people and the cases that need most support, looking at preventative strategies wherever that is possible, trying to encourage people to resolve their issues without going to court, if they can do that, because that inevitably adds expense; there’s cost, there’s time, there’s stress involved in going to court and the more that can be done to frontload that system, to enable people to get help early, to help themselves if they can, then the burdens are reduced on legal aid expenditure. It is about trying to have that focus and I think that’s very different to the approach that we’ve seen in England and Wales [where] the consequences are beginning to become apparent.”

Against that backdrop, the Law Society of Scotland caused a certain degree of consternation last month with the publication of a discussion paper on legal aid, which, they claim, is “no longer fit for purpose”. Among the proposals mooted were to remove certain areas – breach of contract, debt, employment law, financial-only divorce, housing/heritable property, and personal injury, with the exception of medical negligence – from the scope of legal assistance in Scotland on the proviso that a “properly funded and widely available advice network, separate to the traditional network of firms of solicitors providing pro bono and legal assistance work” be in place. 

Director of the Glasgow-based Legal Services Agency, Paul Brown, warned the step “would result in the collapse of access to core areas of civil justice for the most vulnerable in our society”, while Mike Dailly, principal solicitor of the Govan Law Centre, writing on behalf of the Scottish Association of Law Centres, labelled it a “socially regressive proposal that would penalise the most vulnerable and disadvantaged people in our society, taking Scotland backwards in time by more than half a century, to a pre-1950 era when there was no civil legal aid”. Responses have been invited from across the legal profession as well as the Scottish Government and SLAB.  

“It’s hugely important that that [wider] scope remains because when you look at all the different areas that affect individuals, they can have a devastating effect on people’s lives,” says Lancaster. “Particularly, if you look at what is being done in England and Wales and what some have talked about here but not us or the government, some of the areas, if you’re looking at things like housing or debt or employment, these are things that really matter in people’s day-to-day lives.

“Again, if you take an employment problem, good advice at an early stage in an employment problem can help resolve that and prevent knock-on effects. So, if somebody is made redundant and they don’t get their redundancy pay or [are] unfairly dismissed, if they’re reinstated that can then prevent knock-on problems in terms of debt and housing debt and all the rest of those issues that then need further advice to resolve them as well as the impact on the individual. I think the UK Government, in looking at England and Wales, maybe thought those were slightly softer targets – but really, those are things that are fundamental to people’s ability to live their lives.”

Uncertainty still looms over the Scottish Government’s long-term intentions for criminal legal aid. Ministers had pledged to outline their decision on the introduction of contracting in criminal legal aid in October, almost a year on from SLAB submitting its advice. Two months and a ministerial reshuffle later, the profession is still waiting. Likewise, plans for the implementation of criminal contributions remain shrouded in darkness after the scheme, which will see Scots accused of criminal offences – depending on their weekly disposable income – contribute to legal aid costs in summary cases, stalled due to advisory guidance issued by the Law Society to solicitors earlier this year.

“I don’t know how they’ve decided to get round the Law Society’s position on that, but inevitably, there are going to be people who can’t afford what they’re assessed as being able to afford and who will then be unrepresented,” says Solicitor Advocate John Scott, chair of Justice Scotland and the second highest-earning solicitor advocate last year in terms of legal assistance fees. 

“I think we’ve seen more of that in England than here and even very senior judges in England have commented quite vehemently just in the past couple of months about unrepresented parties going through the courts and the delays and the expense that that causes. It’s almost as if there’s a message about cutting legal aid, but they ignore the reality which is that by the end of it all, you save neither time nor money because of the allowances that have to be made and the delays caused by people that are representing themselves who don’t know what they’re doing.” 

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