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08 November 2017
After an unexpectedly lengthy wait, the government has launched the first stage of its scheme for refunding employment tribunal fees following the Supreme Court's decision that the fees system was unlawful.
On July 26 2017 the Supreme Court ruled that the system for charging fees to bring an Employment Tribunal claim was unlawful. Not only was the requirement to charge fees to be removed immediately, but all fees paid by users of the tribunal service since they were introduced in July 2013 were to be refunded (for further details please see "Employment tribunal fees ruled unlawful by Supreme Court").
This decision raised a number of issues. Although there is likely to be a central record of all fees paid by claimants, it is not as simple as repaying those fees to those individuals. Where claimants won their cases, the losing employer would usually be ordered to pay the value of the fees to the claimant as part of a costs award. If all fees are paid back to claimants, double recovery would occur in situations where the employer has already been ordered to make such payment. However, the Employment Tribunal cannot simply check its records and refund those fees to employers instead, as many do not pay the amounts ordered (for further details please see "Thorny issues arising from abolition of employment tribunal fees).
It was also unclear what would happen if fees had been refunded as part of a settlement agreement between the parties. These complications may be part of the reason that the government's announcement of the refund scheme – originally expected in early September – has only recently been made.
According to a press release from the Ministry of Justice and HM Courts and Tribunal Service, the first stage of the refund scheme will involve around 1,000 people being contacted individually and given a chance to apply for a refund. This stage will last for four weeks, after which the full refund scheme will be rolled out.
Full details of the final scheme are presently unknown. However, applicants who successfully apply for a refund will be paid interest at 0.5% calculated from the date of the original fee payment to the date of the refund. The government is also working with trade unions which have supported large multiple claims potentially involving hundreds of claimants, presumably to disentangle who is owed which amounts from a large multiple fee. Others who have paid fees but are not included in the initial 1,000 people being contacted can register their interest in applying when the full scheme is rolled out by either email or post.
A written statement from Justice Minister Dominic Raab gives additional information about the planned full scheme. It confirms that those who will be able to claim a refund include:
Some details of the refund process are also provided. To receive a refund, applicants will be invited to complete an application form and the details provided will be verified against the Employment Tribunal's records. Where applicants are unable to provide full details of the fees that they paid or the details do not match, the application will not be refused automatically, but may take longer to process. Where applicants are claiming for fees that they reimbursed to their opponent, they will be asked to provide a copy of the Employment Tribunal order and proof of payment.
The written statement clarifies that where an employer has reimbursed a claimant under a private settlement agreement, it will not be eligible for a refund. In these circumstances, the claimant will still be able to claim a refund of the original fee. The employer will be able to reclaim this fee from the claimant only if expressly provided for in the settlement agreement.
Employers should register their interest now to ensure that they are contacted promptly when the full scheme is in operation. They should also locate the Employment Tribunal order and proof of payment, in preparation for making a refund application when the scheme opens. In addition to the reimbursement of fees paid to an opponent, some employers may have paid other types of fee directly (eg, in order to issue a counterclaim or participate in judicial mediation). These employers should also consider registering their interest now.
In a written answer to a parliamentary question, the Ministry of Justice has stated that the estimated cost of fees refunds, including interest, is £33 million.
For further information on this topic please contact Michael Burd at Lewis Silkin by telephone (+44 20 7074 8000) or email (email@example.com). The Lewis Silkin website can be accessed at www.lewissilkin.com.
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