Richard Brennan, Employment associate, TLT Solicitors.
For many years employers have had the burden of defending a rising number of tribunal claims from dissatisfied workers. In retail it has often made more sense to settle low-value weak claims rather than spend the required time and costs defending them.
The Government has now tried to redress the balance through the introduction of a £250 fee for any claim. As fees will be waived for many low-paid employees with limited savings, this move should generally be perceived as good news.
The wider impact will depend on whether claimants are forced to fund the fee themselves or whether they will be able to obtain funding from other sources. Unions have indicated they will fund fees for their members, but this may not be the case if they believe the claim has no merit. There may also be a rise in ‘no-win no-fee’ arrangements as claimants look to avoid paying the fee themselves.
Businesses will need to consider how this will affect negotiations - employees are likely to want to settle early to avoid fees, while an employer may delay to see if the employee is prepared to pay to bring a claim.
The new regime may deter those considering low value and sometimes frivolous claims. Although the impact of fees will take time to become clear, some believe there will be a 25% cut in claims.