The introduction of upfront fees for employment tribunals has resulted in plummeting claim numbers.
Figures from Ministry of Justice revealed 3,792 applications were made for single claims between April and June 2014, down 70 per cent compared to the same period last year.
From July 2013, employment tribunals incurred an upfront cost to the claimant of either £400 or £1,200, depending on the complexity of the case.
Tribunal applications fell 75 per cent in the first quarter after the change. This rose to 79 per cent year-on-year.
Employment lawyers said the figures could prompt a government rethink on fee policy.
Matthew Lewis, partner at Squire Sanders, said a balance on fee levels must be found.
‘There needs to be a fee level that supports robust tribunals,’ he said.
While the changes were aimed at reducing the number of frivolous claims, it is likely claims with merit ‘are simply not being pursued’, Paul Scholey, senior partner at Morrish Solicitors, said.
The number of cases commenced earlier this year fell below the number of cases that were successful in the previous year, he noted.
‘Although there were always some hopeless cases, to say that seven out of 10 cases had no merit would be wrong,’ he said.
‘It is clear some cases with value are not being taken forward as a result of the changes,’ he said.
‘A functioning system of tribunals improves standards. While there are a lot of good employers, we know there are some less reputable that need to be challenged.’
The drop in claim numbers has put pressure on the employment law sector, both in firms and on the judiciary.
Judges and tribunals are also finding themselves without a full caseload, Mr Scholey said, which may threaten their future.
Corporate law firms are unlikely to reduce headcount, Mr Lewis said, as the economic recovery will create further work through hiring, restructuring and merger and acquisition activity.
The 2015 general election could also trigger a fee review, which may rebalance the current drop in claims, he added.
Source: Yorkshire Post