The Ministry of Justice (MoJ) yesterday announced plans to increase the threshold for the court and tribunal fee remission scheme to around the level of the national living wage (NLW).
The move was specifically aimed at alleviate the impact that fees have had on the volume of employment tribunal (ET) claims, but will apply to all civil and family cases.
The long-awaited review of the impact of fees for ET claims showed a “sharp, significant and sustained fall” in claims, alongside a significant increase in the number of people who have turned to Acas’s conciliation service.
Nonetheless, the MoJ acknowledged that some people – it estimated between 3,000 and 8,000 – who were unable to resolve their disputes through conciliation then did not go on to issue proceedings because they said that they could not afford to pay.
It said: “We do not believe, however, that this necessarily means that those people could not realistically afford to pay the fee. It may mean, for example, that paying the fee might involve having to reduce other areas of non-essential spending; or that they were not aware of the help available, or thought they might not qualify for help, under the Help with Fees scheme; or they may have been unaware of the Lord Chancellor’s exceptional power to remit fees…
“While there is clear evidence that ET fees have discouraged people from bringing claims, there is no conclusive evidence that they have been prevented from doing so… Nevertheless, the review highlights some matters of concern that cannot be ignored.”
It said the “best way” to address the issue of some people being discouraged to pursue action because of fees was to extend access to the support available under the Help with Fees scheme.
This would be to adjust the income, rather than capital, test for fee remissions (anyone with disposable capital of £3,000 or more is not eligible). “We believe that this is the fairest approach because it would benefit people on low incomes, but whose income is just above the current threshold, and are therefore currently expected to pay at least something towards the fee.”
The MoJ proposed raising the gross monthly income threshold for a single person from £1,085 to £1,250, meaning anyone earning less than this would be fully exempt from fees.
This is approximately the gross monthly income that a single person over the age of 25 working full-time for the NLW (40 hours per week at a rate of £7.20 per hour).
“We believe that this is an appropriate level at which to set the threshold for a full fee remission above which the person is required to make a contribution to the fee.”
The same differentials as currently apply for couples (an additional £160 of gross monthly income per month) and for those with children (an additional £245 of gross income per month per child) would be maintained.
“Although our proposal is based on setting the threshold at the level of a single person earning the NLW, we are not proposing to increase it annually in line with increases to the NLW. This is consistent with our approach to fees generally, which are not subject to annual increases. Instead we propose to keep the level of fees and remissions in the ETs under regular review.”