1. www.tanfieldchambers.co.uk FEES IN THE ET & THE EAT & NEW PROVISIONS ON COSTS Paul Stevenson

2. www.tanfieldchambers.co.uk CONTENTS: Fees in the ET New provisions on ET costs Fees in the EAT New provisions on EAT costs Contact FEES IN THE ET & EAT AND COSTS

3. www.tanfieldchambers.co.uk Draft Employment Tribunals and the Employment Appeal Tribunal Fees Order 2013 likely to come into force on 29 July 2013. Also see The Employment Tribunals (Constitution and Rules of Procedure) Regulations 2013. Fees to be payable: i.By the Claimant when a claim form is presented to the ET; ii.By the Claimant at the time notice is received of a final hearing; iii.By an applicant upon making an application; iv.By the Respondent in advance of a judicial mediation Employment Tribunal Fees Introduction

4. www.tanfieldchambers.co.uk Employment Tribunal Fees Liability for payment Transition No fee is payable in respect of an ET claim where the claim was presented prior to 29 July 2013. No fee is payable in respect of an appeal to the EAT where a notice of appeal was received before 29 July 2013.

5. www.tanfieldchambers.co.uk Employment Tribunal Fees Liability for payment Type of claim Two levels of issue fee and hearing fee depending on whether claim is a “Type A” or a “Type B” claim. Type A claims include redundancy pay, holiday pay claims, sums due on termination, and unauthorised deductions. Type B claims are all other claims, i.e. unfair dismissal, discrimination, and whistleblowing. By error Equal Pay claims are omitted from Type A. This will be rectified.

6. www.tanfieldchambers.co.uk Employment Tribunal Fees Liability for payment Fees for issue and hearing TypeET issueET hearing A£160£250 B£230£950

7. www.tanfieldchambers.co.uk Employment Tribunal Fees Fees for applications Counterclaims to a contract claim - £160 Reconsideration of default judgments - £100 Reconsideration of a judgment following a final hearing - £100 or £350 depending on whether claim is Type A or B Fee for judicial mediation - £600

8. www.tanfieldchambers.co.uk Employment Tribunal Fees Liability for payment Who pays? Both the issue fee and the hearing fee are payable by the claimant probably via a central online service rather than direct to local ETs. Respondents will not be required to pay a fee to file a response but they will be required to pay to issue a counterclaim in a contract claim. The respondent pays the judicial mediation fee. The applicant pays any application fee.

9. www.tanfieldchambers.co.uk Employment Tribunal Fees Liability for payment Multiple claims Irrespective of the number of claims brought, a claimant only has to pay a single issue fee and a single hearing fee. Where at least one claim is Type B, the issue and hearing fee are charged at the Type B rate.

10. www.tanfieldchambers.co.uk Employment Tribunal Fees Liability for payment When are the fees payable? Issue fee: the ET issue fee is payable “when a claim form is presented to an employment tribunal”: see draft Article 6. Hearing fee: the draft Order does not specify how far before the hearing the hearing fee is payable. The hearing fee is payable “on a date specified in a notice accompanying the notification of the listing of a final hearing of the claim”: see draft Article 4(1)(b). Thought to be the Government’s intention that the fee would be paid 4 – 6 weeks before the hearing. Application fee: there is no set date for payment. It is not payable with the application itself. It is payable on a “date specified by the Lord Chancellor in a notice following the making of the application”: draft Article 4(2). Judicial mediation fee: paid “on a date specified in a notice accompanying a notification of listing for judicial mediation”: draft Article 4(3).

11. www.tanfieldchambers.co.uk Employment Tribunal Fees Non payment Consequences Rule 11 11.— Rejection: absence of Tribunal fee or remission application (1) The Tribunal shall reject a claim if it is not accompanied by a Tribunal fee or a remission application. (2) Where a claim is accompanied by a Tribunal fee but the amount paid is lower than the amount payable for the presentation of that claim, the Tribunal shall send the claimant a notice specifying a date for payment of the additional amount due and the claim, or part of it in respect of which the relevant Tribunal fee has not been paid, shall be rejected by the Tribunal if the amount due is not paid by the date specified. (3) If a remission application is refused in part or in full, the Tribunal shall send the claimant a notice specifying a date for payment of the Tribunal fee and the claim shall be rejected by the Tribunal if the Tribunal fee is not paid by the date specified. (4) If a claim, or part of it, is rejected, the form shall be returned to the claimant with a notice of rejection explaining why it has been rejected.

12. www.tanfieldchambers.co.uk Employment Tribunal Fees Non payment Consequences Rule 40 40.— Non-payment of fees (1) Subject to rule 11, where a party has not paid a relevant Tribunal fee or presented a remission application in respect of that fee the Tribunal will send the party a notice specifying a date for payment of the Tribunal fee or presentation of a remission application. (2) If at the date specified in a notice sent under paragraph (1) the party has not paid the Tribunal fee and no remission application in respect of that fee has been presented— (a) where the Tribunal fee is payable in relation to a claim, the claim shall be dismissed without further order; (b) where the Tribunal fee is payable in relation to an employer's contract claim, the employer's contract claim shall be dismissed without further order; (c) where the Tribunal fee is payable in relation to an application, the application shall be dismissed without further order; (d) where the Tribunal fee is payable in relation to judicial mediation, the judicial mediation shall not take place. (3) Where a remission application is refused in part or in full, the Tribunal shall send the claimant a notice specifying a date for payment of the Tribunal fee. (4) If at the date specified in a notice sent under paragraph (3) the party has not paid the Tribunal fee, the consequences shall be those referred to in sub-paragraphs (a) to (d) of paragraph (2). (5) In the event of a dismissal under paragraph (2) or (4) a party may apply for the claim or response, or part of it, which was dismissed to be reinstated and the Tribunal may order a reinstatement. A reinstatement shall be effective only if the Tribunal fee is paid, or a remission application is presented and accepted, by the date specified in the order.

13. www.tanfieldchambers.co.uk Employment Tribunal Fees Non payment Consequences Rule 13 13.— Reconsideration of rejection (1) A claimant whose claim has been rejected (in whole or in part) under rule 10 or 12 may apply for a reconsideration on the basis that either— (a) the decision to reject was wrong; or (b) the notified defect can be rectified. (2) The application shall be in writing and presented to the Tribunal within 14 days of the date that the notice of rejection was sent. It shall explain why the decision is said to have been wrong or rectify the defect and if the claimant wishes to request a hearing this shall be requested in the application… Rule 10 applies where the correct claim form is not used or the claimant fails to supply the minimum required information. Rule 12 applies where the ET considers it has no jurisdiction to consider the claim or that it is an abuse of process. NB: does not apply to Rule 11.

14. www.tanfieldchambers.co.uk Employment Tribunal Fees Non payment Consequences in summary The rejection of a claim for non-payment of an issue fee is terminal where the time for presenting a claim has expired. If time limit has yet to expire, a further claim may be presented. Where part of an issue fee is paid the claim will not be rejected immediately but this will follow if the amount due is not paid by the date specified by the ET. Rule 40 will still apply where a claim is dismissed for non-payment of a hearing fee rather than an issue fee. Where an application fee is not paid the application is dismissed without further order. Where a judicial mediation fee is not paid, the mediation does not go ahead.

15. www.tanfieldchambers.co.uk Employment Tribunal Fees Fee remission Applying for remission The fee remission system which currently operates under the CPR will be extended to ETs and the EAT: see draft Article 17 and the Court Proceedings Fees Order 2008 but note MoJ consultation (see below). 11.— Rejection: absence of Tribunal fee or remission application (1)The Tribunal shall reject a claim if it is not accompanied by a Tribunal fee or a remission application… (3) If a remission application is refused in part or in full, the Tribunal shall send the claimant a notice specifying a date for payment of the Tribunal fee and the claim shall be rejected by the Tribunal if the Tribunal fee is not paid by the date specified.

16. www.tanfieldchambers.co.uk Employment Tribunal Fees Fee remission Applying for remission Entitlement to remission does not have to be resolved when the claim is presented but the application must be made with the claim. There is no requirement that a claimant must genuinely believe that he/she would be entitled to remission. A two-stage administrative appeal process applies for rejected admissions (probably). Pending resolution of the appeal, the ET will probably not send the notice set out in draft rule 11(3), i.e. the claim is in limbo. Upon resolution of the appeal if it fails the ET sends out a notice requiring payment of the relevant tribunal fee by the date specified.

17. www.tanfieldchambers.co.uk Employment Tribunal Fees Fee remission Types of remission Schedule 3 There are three types of fee remission: i.Remission 1 – qualifying benefits; ii.Remission 2 – gross annual income; iii.Remission 3 – disposable monthly income

18. www.tanfieldchambers.co.uk Employment Tribunal Fees Fee remission Remission 1 – qualifying benefits A party is entitled to full remission if he or she is in receipt of one or more “qualifying benefits”: i.Income support under the Social Security Contributions and Benefits Act 1992; ii.Working tax credit (provided no child tax credit is being paid to the party); iii.Income-based jobseeker’s allowance under the Jobseekers Act 1995; iv.Guarantee credit under the State Pension Credit Act 2002; v.Income-related employment and support allowance under the Welfare Reform Act 2007.

19. www.tanfieldchambers.co.uk Employment Tribunal Fees Fee remission Remission 2 – gross annual income A party is entitled to full remission if his or her gross annual income for the 12 months prior to the application – together with that of any partner – other than from the receipt of “excluded benefits” does not exceed the thresholds set out: If the party has four or more children the relevant amount of gross annual income is the amount for four children + £2,930 for each additional child. Number of childrenSingleCouple 0£13,000£18,000 1£15,930£20,930 2£18,860£23,860 3£21,790£26,790 4£24,720£29,720

20. www.tanfieldchambers.co.uk Employment Tribunal Fees Fee remission Remission 3 – disposable monthly income A scale applies depending on disposable monthly income (“DMI”). DMI is the gross monthly income for the month when a fee becomes payable less: i.Income tax paid or payable and NI contributions; ii.Monthly rent or monthly payment in respect of a mortgage debt (or equivalent) less any housing benefit paid; iii.Child care costs paid or payable; iv.Bona fide maintenance payments for the maintenance of a child who is not one of the party’s household; v.Amounts paid pursuant to a Court order; and vi.Living expenses of £315 + £244 for each child of the party + £159 if the party has a partner. The income of a partner counts as a party’s income.

21. www.tanfieldchambers.co.uk Employment Tribunal Fees Fee remission Remission 3 – disposable monthly income The maximum fee payable is: i.Where DMI is £50 - £210, one quarter of every £10 of the party’s DMI up to a maximum of £50; i.Where DMI is £210+, £50 + one half of every £10 over £200 of the party’s DMI. For example, where DMI is £300, the fee is: £50 + (£300 (DMI) - £200 = £100 = 10 lots of £10 / 2 = £50) = £100 in total

22. www.tanfieldchambers.co.uk Employment Tribunal Fees Fee remission MOJ Consultation Consultation issued April 2013. Proposed remission system has 2 tests: (1)“Disposable capital” of the applicant and/or their partner to include savings, investments and redundancy payments; and (2)Gross monthly income For fees up to £1,000 remission would be available if disposable capital does not exceed £3,000. For fees from £1,001 to £4,000 remission would be available if disposable capital does not exceed £8,000. But applicants must satisfy test (1) and (2) to qualify. Full remission applies where gross monthly income is below: For 2+ children gross monthly income limit is increased by £245 per child. Recipients of income support and income-based JSA would automatically fall below the income threshold provided the disposable capital test is met. For income above threshold applicants to pay £5 for every £10 of income above the threshold. ChildrenSingleCouple 0£1,085£1,245 1£1,330£1,490 2£1,575£1,735

23. www.tanfieldchambers.co.uk Employment Tribunal Fees Multiple claims Fee groups Articles 8 – 10 The fee must not exceed the fees which the members of the group would have paid as single members taking into account any remission (see below). Number of claimants Fee 2 – 102 x fee for single claim 11 – 2004 x fee for single claim 201+6 x the fee for single claim

24. www.tanfieldchambers.co.uk Employment Tribunal Fees Multiple claims Fee groups Articles 8 – 10 Type A claimsIssue feeHearing fee 2 – 10£320£460 11 – 200£640£920 201+£960£1,380 Type B claims 2 – 10£500£1,900 11 – 200£1,000£3,800 201+£1,500£5,700

25. www.tanfieldchambers.co.uk Employment Tribunal Fees Multiple claims Part payment What if some group members pay the fee but not all? Where issue fee is unpaid, notice will be sent under Rule 11(2) to all group members giving a date for payment. If the group fee remains unpaid by that date, the claims of those who have failed to pay will be rejected: see Rule 11(2). NB Article 12(1) “Where a fee payable by a fee group remains unpaid after the date specified in accordance with article 4, a member of that fee group may, before the date on which the claim to which the fee relates is liable to be struck out for non payment, notify the Lord Chancellor of that member’s decision no longer to be part of the group.” (and would be liable for the balance of the single claimant fee). Where a hearing fee is unpaid, notice is sent under draft Rule 40(1). If the hearing fee remains unpaid the claim is dismissed without further order. This probably applies to the whole claim (even where a share of the hearing fee has been paid).

26. www.tanfieldchambers.co.uk Employment Tribunal Fees Multiple claims Fee remission What if some group members are entitled to remission? Article 10(b): “Where one or more members of the group is entitled to remission…[any fee payable] must not exceed an amount equal to the sum of the fees which the members of the fee group would be liable to pay as single claimants, taking into account any remission which would have been granted to individual members of the group if they were single claimants”. For example, if there are 11 claimants the issue fee for a Type A claim is £640, i.e. £58.18 each. If 9 are entitled to remission, £640 divided by the remaining 2 would be £320 (higher than the ‘single claimant’ fee of £160). The lower payment applies.

27. www.tanfieldchambers.co.uk Employment Tribunal Fees Fee reimbursement Fees are non-refundable even where a hearing fee is paid and no hearing is required.

28. www.tanfieldchambers.co.uk Employment Tribunal Fees Tactical considerations Additional negotiation “pressure point” when hearing fee becomes due. Incentive for a claimant to settle before payment. But, greater costs risks for a respondent in the event that the claimant succeeds. Query whether settlements are likely to increase by £1,200 to factor in the costs of fees. ET empowered to make a costs order at any point at which it makes a decision where a fee has been paid. Also consider that the ET could make an order for wasted costs under Rule 80 of the draft rules if it considers that unnecessary delaying tactics have increased costs.

29. www.tanfieldchambers.co.uk Employment Tribunal Fees Judicial review challenge Challenges brought by UNISON in the High Court and by Fox & Partners in the Scottish Court of Session. UNISON thought to be arguing: i.It is unlawful to introduce fees which make it prohibitively difficult to enforce European Community law; ii.Fees are not usually payable in First-Tier Tribunals and the “principle of equivalence” should apply; iii.The fees indirectly discriminate against women who (typically) earn less than men. Scottish Court of Session refused to grant interim interdict (injunction) to prevent introduction of fees on 29 July. Decision of High Court on permission is awaited (due by 22 July). This might delay the changes. Lord Chancellor has undertaken to refund fees (with interest) paid in the event that the JR succeeds.

30. www.tanfieldchambers.co.uk Employment Tribunal Fees Judicial review challenge Lord Chancellor made three concessions during the preliminary hearing in Scotland: 1)Only one fee is due for multiple appeals in the EAT (not one fee per appellant); 2)Preliminary hearings will not attract a hearing fee; 3)Equal Pay claims fall within “Type A” claims but legislation will be needed to correct the error.

31. www.tanfieldchambers.co.uk Employment Tribunal Costs Costs orders and preparation time orders The most important changes to costs under the 2013 rules are as follows: i.An ET can now make a costs order where a party is represented by a “lay representative”; ii.An ET can make a costs order requiring the payment of a relevant tribunal fee following, for example, a decision on an application; iii.An ET can make a costs order where a claim or response has no reasonable prospect of success; i.An Employment Judge can assess costs in excess of £20,000 (previously such assessments were remitted to the County Court).

32. www.tanfieldchambers.co.uk Employment Tribunal Costs Costs orders and preparation time orders 75.— Costs orders and preparation time orders (1) A costs order is an order that a party (“the paying party”) make a payment to— (a) another party (“the receiving party”) in respect of the costs that the receiving party has incurred while legally represented or while represented by a lay representative; (b) the receiving party in respect of a Tribunal fee paid by the receiving party; or (c) another party or a witness in respect of expenses incurred, or to be incurred, for the purpose of, or in connection with, an individual's attendance as a witness at the Tribunal. (2) A preparation time order is an order that a party (“the paying party”) make a payment to another party (“the receiving party”) in respect of the receiving party's preparation time while not legally represented. “Preparation time” means time spent by the receiving party (including by any employees or advisers) in working on the case, except for time spent at any final hearing. (3) A costs order under paragraph (1)(a) and a preparation time order may not both be made in favour of the same party in the same proceedings. A Tribunal may, if it wishes, decide in the course of the proceedings that a party is entitled to one order or the other but defer until a later stage in the proceedings deciding which kind of order to make.

33. www.tanfieldchambers.co.uk Employment Tribunal Costs Against whom a costs order may be made 74.— Definitions (2) “Legally represented” means having the assistance of a person (including where that person is the receiving party's employee) who— (a) has a right of audience in relation to any class of proceedings in any part of the Senior Courts of England and Wales, or all proceedings in county courts or magistrates’ courts; (b) is an advocate or solicitor in Scotland; or (c) is a member of the Bar of Northern Ireland or a solicitor of the Court of Judicature of Northern Ireland. (3) “Represented by a lay representative” means having the assistance of a person who does not satisfy any of the criteria in paragraph (2) and who charges for representation in the proceedings.

34. www.tanfieldchambers.co.uk Employment Tribunal Costs When a costs order may be made 76.— When a costs order or a preparation time order may or shall be made (1)A Tribunal may make a costs order or a preparation time order, and shall consider whether to do so, where it considers that— (a) a party (or that party's representative) has acted vexatiously, abusively, disruptively or otherwise unreasonably in either the bringing of the proceedings (or part) or the way that the proceedings (or part) have been conducted; or (b) any claim or response had no reasonable prospect of success… (4) A Tribunal may make a costs order of the kind described in rule 75(1)(b) where a party has paid a Tribunal fee in respect of a claim, employer's contract claim or application and that claim, counterclaim or application is decided in whole, or in part, in favour of that party. Note the replacement of “[where] the bringing or conducting of the proceedings by the paying party has been misconceived”. The new language is consistent with Rule 37 [strike out].

35. www.tanfieldchambers.co.uk Employment Tribunal Costs Amount of a costs order 78.— The amount of a costs order (1)A costs order may— (a) order the paying party to pay the receiving party a specified amount, not exceeding £20,000, in respect of the costs of the receiving party; (b) order the paying party to pay the receiving party the whole or a specified part of the costs of the receiving party, with the amount to be paid being determined, in England and Wales, by way of detailed assessment carried out either by a county court in accordance with the Civil Procedure Rules 1998, or by an Employment Judge applying the same principles; (c) order the paying party to pay the receiving party a specified amount as reimbursement of all or part of a Tribunal fee paid by the receiving party; (d) order the paying party to pay another party or a witness, as appropriate, a specified amount in respect of necessary and reasonably incurred expenses (of the kind described in rule 75(1)(c)); or (e) if the paying party and the receiving party agree as to the amount payable, be made in that amount. (2) Where the costs order includes an amount in respect of fees charged by a lay representative, for the purposes of the calculation of the order, the hourly rate applicable for the fees of the lay representative shall be no higher than the rate under rule 79(2). [£33 per hour to increase by £1 every 6 April] (3) For the avoidance of doubt, the amount of a costs order under sub-paragraphs (b) to (e) of paragraph (1) may exceed £20,000.

36. www.tanfieldchambers.co.uk EAT Fees Fees payable A fee of £400 is payable by the appellant on the date specified in a notice issued by the Lord Chancellor, following the receipt by the EAT of a notice of appeal. A fee of £1,200 is payable by the appellant on the date specified in a notice issued by the Lord Chancellor, following a direction by the EAT that a matter proceed to an oral hearing at which the appeal is to be finally disposed of.

37. www.tanfieldchambers.co.uk EAT Fees The Employment Appeal Tribunal (Amendment) Rules 2013 Non-payment of fee – new rule 17A In force 29 July 2013 17A.— Non-payment of fee (1) The Registrar must strike out an appeal, and must notify each party that the appeal has been struck out, where— (a) upon receipt of a notice of appeal, or following a direction by the Appeal Tribunal that a matter proceed to an oral hearing, the Lord Chancellor has issued a notice to an appellant specifying that a fee is payable; and (b) the appellant has not paid the fee or presented a remission application on or before the date specified in that notice. (2) Where an appeal has been struck out under paragraph (1), the appeal may be reinstated by the Registrar if— (a) the appellant applies to have the appeal reinstated; and (b) the fee specified in the Lord Chancellor's notice has been paid or a remission application has been presented and accepted. (3) The Registrar must strike out an appeal, and must notify each party that the appeal has been struck out, where— (a) after consideration of a remission application the Lord Chancellor has issued a notice to an appellant specifying that a fee is payable; and (b) the appellant has not paid the fee on or before the date specified in that notice. (4) Where an appeal has been struck out under paragraph (3) the appeal may be reinstated by the Registrar if— (a) the appellant applies to have the appeal reinstated; and (b) the fee specified in the Lord Chancellor's notice has been paid. (5) An application for reinstatement under paragraph (2) or (4) is deemed to be an interim application for the purposes of rule 20.”

38. www.tanfieldchambers.co.uk EAT Costs The Employment Appeal Tribunal (Amendment) Rules 2013 Costs New rule 34A(2A) “(2A) If the Appeal Tribunal allows an appeal, in full or in part, it may make a costs order against the respondent specifying the respondent pay to the appellant an amount no greater than any fee paid by the appellant under a notice issued by the Lord Chancellor.”