Philip Hodges, of Hill Dickinson, on fees for tribunal claims

CHANCELLOR George Osborne has announced the introduction of a system of fees payable by individuals wishing to issue claims in the Employment Tribunal.

The early signs are that there will be a fee of up to £250 to commence a claim and a further fee of £1,000 when the claim is listed for a hearing. Fees are likely to be waived where the claimant is on a low income. As many claims arise as a result of the termination of employment, the fee exemption is likely to apply to a fair number of claims. It is also expected that fees will be refunded if the claim is successful. The proposed introduction date is uncertain: some reports cite April ,2013, others December, 2013.

Employers are likely to welcome these changes. Many claims are funded by damages-based agreements – a “no win, no fee” type agreement under which the claimant’s solicitor takes a proportion of any damages recovered.

In the alternative, many claimants have the benefit of legal protection as part of domestic insurance products. As there is no cost to the claimant in issuing proceedings, this has led to unmeritorious and vexatious claims being brought by fearless claimants.

Currently, employers often feel under pressure to settle claims against them, due to the costs and management time that they are likely to incur in defending the claim. It remains to be seen whether fees can help to reverse the trend.