Qualified one-way costs shifting (QOCS) should be extended to cover discrimination cases in the county court, MPs on the House of Commons women and equalities committee have recommended.
They also called for more use of exemplary damages by the courts and tribunals, and the ability to impose orders requiring organisational change, in a report published today on enforcing the Equality Act.
The committee said extending QOCS to discrimination claims was supported by the Equality and Human Rights Commission (EHRC) and the House of Lords committee on the Equality Act and disability.
MPs said discrimination specialist Chris Fry, senior partner of Fry Law, told them it would be “relatively straightforward” to extend QOCS, requiring only a “simple amendment” to the Civil Procedure Rules. Mr Fry “even provided” the committee with a draft of the amendment.
The committee said it heard that claimants in discrimination cases “all too often felt forced into settling a claim because they fear that if they do not do so they will become liable for the costs of the other party”, both in tribunals and the county court.
MPs said this “appeared to be as much due to the tactics employed by defendants and their legal teams as to the rules of the court”.
The committee had expressed the concern, during its inquiry into non-disclosure agreements (NDAs), that fears about pursued for legal costs led people to agree to confidentiality clauses they did not want.
These concerns had been “repeated” in its latest inquiry and “extended to include county court claims where the threat of a costs order is more significant than in the employment tribunal”.
The committee recommended that HM Courts and Tribunal Service (HMCTS) issued “guidance to judges and the legal profession on when refusing to enter a settlement agreement or agree to a non-disclosure agreement will and will not constitute grounds for awarding costs in discrimination claims, with a strong presumption that such a refusal, on its own, will not lead to an award of costs against an individual.”
More broadly, the committee stressed the need to develop a “critical mass” of cases to inform employers and organisations about their legal duties and make adherence to existing equality law a priority for all, “moving away from the current model of using individual litigation to create precedents”.
The starting point for this would be changing the cost benefit test for legal aid “to reflect the non-financial value, to the individual and to society, of enabling a discrimination claim to be brought”.
The report said: “The rules should require the cost benefit assessment to start from an assumption that discrimination claims are not primarily claims for damages and are likely to be in the wider public interest.”
It also called on the EHRC to lead the way in bringing strategic litigation, with financial backing from the government.
This would be supported by greater publicity. MPs said the EHRC had told them that, because county court judgments were not routinely published, there was “no clear picture” of how many claims were being brought, and who the “repeat offenders” were.
They rejected a suggestion by the Ministry of Justice that the high volume of business at the county court was a barrier to publication.
The committee said it could not be “beyond the ability of our courts system to be able to publish something as important to those involved as the judgment of their case”, with suitable use of anonymity.
The MPs said current remedies for discrimination tended to be focused on “remedying the ‘wrong’ suffered by the individual”, with “insufficient regard to the social benefit of enforcing the Equality Act” and unjustifiably limiting the role that individual claims can play in achieving that benefit.
“There are two key areas where the most urgent improvement to the remedies available for breaches of the Equality Act is needed.
“The financial consequences of discrimination need to be such that they act as a significant deterrent and the courts and tribunals need the power to ensure that their judgments can achieve change beyond the individual case.”
The committee recommended making exemplary damages for discrimination more widely available in the tribunals and county courts, and allowing remedial orders to be made which required organisational change.
Committee chair Maria Miller said: “Employers and service providers are not afraid to discriminate, knowing that they are unlikely to be held to account. We need a critical mass of cases to build a culture where compliance with the Equality Act is the norm.
“The EHRC must overcome its timidity. It has unique powers, limited resources and must use them for maximum impact.
“It should make regulators, inspectorates and ombudsmen not only key partners in creating a critical mass of enforcement action but also key targets for enforcement action when those same regulators, inspectorates and ombudsmen fail to meet their own equality duties.”