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EMPLOYMENT APPEAL TRIBUNAL FEES: A MESS

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It is well known that the introduction of Employment Tribunal fees has caused an 80% reduction in cases and that Unison’s Judicial Review applications have failed.
Less well-known is that there are further fees of £1,600.00 to appeal to the Employment Appeal Tribunal, being a fee of £400.00 to lodge the appeal and £1,200.00 to proceed to a full hearing once leave has been given. This will typically bring the total fees to £2,800.00 once the original Employment Tribunal fees are added in.

Rule 34A(2A) of the Employment Tribunal Rules 1993 – SI 1993/2854 – provides:-

“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.”

Thus the general no costs rule remains but an exception is made in relation to tribunal fees.

The Employment Appeal Tribunal has been interpreting and applying this rule in a harsh manner to appellants. It has rejected the suggestion that the winning party in an appeal should automatically have any tribunal fees refunded saying that that would involve adopting a costs shifting regime which does not exist in the Employment Appeal Tribunal.

In Look Ahead Housing and Care Limited v Chetty and Another [2015] ICR 375 – UKEAT/37/14

the Employment Appeal Tribunal was asked to make an order under Rule 34(A) (2A) of the Employment Tribunal Rules 1993.

Here the employer appellant had paid a total of £1,600.00 being the first fee of £400.00 to lodge the appeal and a further £1,200.00 to proceed to a full hearing once leave had been given.

Here the appellant had lost on every point argued before the Employment Appeal Tribunal but it had succeeded on one ground of the appeal which had in fact been agreed by the respondent to the appeal.

The appellant argued that it had succeeded in part on the appeal and had had to appeal to secure that success.
The respondent pointed out that the appeal had been lodged just two days before the expiry of the 42 day period for appealing and that the respondent had never objected to that particular ground of appeal as being unfounded or wrong.

To award costs against the respondent, that is the original claimant, would cause injustice. It would have been open to the appellant to seek reconsideration by the tribunal and had they done so it would have been obvious to the tribunal that it had made a mistake.

Neither had the appellant sought to agree this point with the claimant prior to incurring the fees in the Employment Appeal Tribunal.
The Employment Appeal Tribunal pointed out that the fees are paid whatever the result and are not refundable and “except perhaps in the most exceptional of circumstances, which very rarely if ever exist, the court never pays them back. Accordingly, what has to be achieved by application of Rule 34A (2A) is justice between the parties as to which should effectively incur the payment of fees which, viewed as between them, is a common expense which was incurred simply because there was an appeal.”

The Employment Appeal Tribunal said that although it was tempting to work on the same basis as the civil courts whereby costs are generally awarded to the party who substantially succeeds and are paid by the party who substantially fails that would be to adopt a costs shifting regime which did not exist in the Employment Appeal Tribunal. Rather the rules look simply at a question of repayment of fees which was necessary to pay in order to bring an appeal.
This is a disingenuous point as when Parliament set the system up in the 1960s as a costs free zone no one anticipated the introduction of punitive fees. Automatically to reject fee shifting because of a system designed to deal with a free procedure makes no sense.

Here the Employment Appeal Tribunal said that the appellant could have asked the original Employment Tribunal to reconsider the question and could have approached the claimant to see agreement on this particular point. Consequently the Employment Appeal Tribunal said:-

“I have concluded that there could have been and should have been action taken prior to the issue of the notice of appeal, of a kind which would not have imposed the payment of fees or an equivalent sum upon either party, and which should have been capable of remedying the injustice. In the light of that, I have concluded that in this case I should make no order as to costs: that is no order as to the repayment of fees.”

The Employment Appeal Tribunal then gave guidance in relation to other cases:-

“For the benefit of other cases which may follow, it seems to me that in a case in which an appeal is brought which is entirely rejected, there is no basis for any payment by the successful party to the appellant. Where there is an appeal which is partly successful, all will depend upon the particular facts. The rule does not permit the payment of the actual costs of litigation, apart from fees, from one party to another. What the court essentially has to assess is whether it was necessary to incur the expense in order to bring the appeal – this includes asking whether the appeal, as in the present case, could have been avoided by the appellant taking reasonable steps, or was made more likely to proceed by the behaviour of the respondent to it; it should then recognise the fact, if it be the case, that an appeal has largely failed or for that matter largely succeeded in deciding, in its discretion, exercised reasonably, whether it should award the full extent of the payment made by way of fees, or whether it should moderate that amount to a reasonable extent. A reasonable extent includes making no award at all, though in circumstances in which an appeal has been partly successful this would have to be carefully justified and is likely to be rare.”

In Portnykh v Nomura International plc, Unreported, UKEAT/0448/13/LA

the Employment Appeal Tribunal took a different view:-

“On an application under rule 34A(2A) of the Employment Appeal Tribunal Rules, as amended, the successful Appellant asked this Tribunal to exercise its discretion to order the Respondent to pay him the amount of that fee as costs. An order to that effect was made on the general principle, subject to specific exceptions arising from the particular circumstances, that where a party had succeeded, the unsuccessful party, after consideration of, and subject to, the means of the paying party to make such a payment, should pay the fees incurred by the successful party. The issue should be looked at broadly and whether or not an appellant has succeeded on all points argued would be a relevant consideration but where, as here, there had been substantial success, payment of the equivalent of the full fee(s) should be the usual outcome.”

Fee Remission

 Here the EAT, Judge Hand QC sitting alone, also considered the appropriate order where an application had been made for fee remission:-

“Where an application had been made for fee remission this Tribunal has power to postpone payment until the outcome of the application for fee remission is known and to make payment conditional upon the application for remission being rejected.”

This is correct but reflects an absurd rule. If a multi-million or billion pound business loses an appeal why should it not be responsible for the fee irrespective of whether the appellant will or will not get fee remission?

Letting a rich company off the hook simply means that appellants of modest means have to pay more to bring an appeal.

This was an appeal against an interlocutory order. Full feels are still payable. Thus if there is an appeal against the substantive decision in due course then the fees payable in the Employment Appeal Tribunal will double to £3,200.00.

A hearing fee of £1,200.00 for a judge sitting alone on an interlocutory matter, maybe without an oral hearing, is by any standards exorbitant.

In Metroline Travel Ltd v Stoute [2015] UKEAT/0302/14  Unreported

the respondent to an Employment Tribunal claim successful appealed against that tribunal’s finding that Type 2 Diabetes necessarily constituted a disability.

The substantive claim had been disposed of and the claimant had no interest in the appeal, which was of importance to the respondent employer in relation to other employees and potential claims, a fact recognised by the EAT which said:-

“I have been persuaded that I should allow the appeal and determine it and not regard it as being entirely academic, but it is an appeal that has been brought for the benefit of the Respondent…”

Nevertheless the EAT ordered the claimant to reimburse his employer for the £1,600.00 EAT Appeal fee occasioned by the Employment Tribunal’s mistake.

Fees Not Recoverable if Paid by Union

In Goldwater v Sellafield Ltd [2015] IRLR 381 EAT

the claimants successfully appealed against an Employment Tribunal finding in relation to deductions from wages.

However the Employment Appeal Tribunal refused the successful appellant employees the return of the £1,600.00 fees as these had been paid by their trade union.

Deciding this important point on the papers only HH Judge Shanks, sitting without members, said that Rule 34A(2A) limits the amount of any costs order to “any fee paid by the appellant” and said:-

“…the plain fact is that the appellants have paid no fees at all in this case and that the maximum order that can be made is therefore nil.”

Rule 76(4) of the Rules of Procedure for Employment Tribunals contains similar wording.

Many Employment Tribunal and Employment Appeal Tribunal matters are funded by trade unions and in other cases it is not unheard of for solicitors to pay the fees upfront.

Rule 34(2) of the EAT rules defines “costs” as including “fees… incurred by or on behalf of a party… in relation to the proceedings.”

Given that definition it seems clear that the intention of Rule 34A(2A) was to limit the maximum that could be awarded rather than to restrict the circumstances in which an award can be made.
The result is absurd. Presumably if the union gives the fee to the appellant who then pays it, it is recoverable. What happens if a solicitor pays the fee without having got money on account from the client?
This is a very poor decision which may have been avoided if submissions had been heard rather than the matter being dealt with on the papers and would almost certainly have never been made by a full tribunal enjoying the wisdom of employer and employee representatives.


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