UNTO THE RIGHT HONOURABLE LORDS OF COUNCIL AND SESSION PETITION

Transcription

1 UNTO THE RIGHT HONOURABLE LORDS OF COUNCIL AND SESSION PETITION of FOX SOLICITORS LTD, a company incorporated under the Companies Acts and having its place of business at 44 York Place, Edinburgh for PETITIONER Judicial Review of draft regulations imposing a structure of fees payable by claimants in the Employment Tribunals and the Employment Appeal Tribunal made by the Lord Chancellor HUMBLY SHEWETH:- 1. The petitioner is a limited company under the Companies Acts and having a place of business at 44 York Place, Edinburgh. It trades as a firm of solicitors under the name Fox and Partners. It represents substantial numbers of claimants in the employment and employment appeal tribunals in Scotland, in particular in cases involving claims for equal pay and in respect of discrimination in employment. Its interest in the subject matter of this petition is twofold: firstly, it is concerned in the public interest for the rights of potential such

2 claimants who could not reasonably be expected to litigate this matter themselves, and secondly, it is concerned for its private interest as being likely to be affected by any substantial reduction in the number of such claims, and also because it is likely that it would be placed under commercial pressure to pay the fees in issue for their clients or to lend them those fees (as the first respondent appears to assume they will: Equality Impact Assessment referred to below, page 19-20). In the nature of the case, no such client could be expected to litigate this issue at this time, because they would be advised to make a claim to the employment tribunal before the order complained of comes into effect and thus avoid its operation. The first respondent is the Advocate General for Scotland as representing the Lord Chancellor and the Secretary of State for Justice. The second and third respondents are the President of the Employment Tribunals for Scotland and the President of the Employment Appeal Tribunal, as having responsibility for the disposal of proceedings in the Employment Tribunals and Employment Appeal Tribunal respectively. The following persons may have an interest: (1) the Equality and Human Rights Commission; (2) the Lord Advocate. They are all designed in the schedule hereto. 2. That on or about 24 April 2013 the Lord Chancellor laid before Parliament at Westminster a draft of the proposed Employment Tribunals and the Employment Appeal Tribunal Fees Order 2013, with a view to these being brought into force on 29 July 2013.

3 3. That the petitioner seeks: 1. Reduction of the Employment Tribunals and the Employment Appeal Tribunal Fees Order 2013, or the draft of such order if not yet made, either generally or at least insofar as having effect in Scotland; 2. Suspension ad interim of the said Order or draft Order, either generally or at least insofar as having effect in Scotland; 3. Interdict against the making of the said Order and also against rejection of any claim to the Employment Tribunal or specification of a date for payment in terms of regulations 11 or 40 of the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2013, and against rejection of any appeal to the Employment Appeal Tribunal because no fee has been paid in terms of the said Order; and interdict ad interim. The petitioners crave the court to pronounce such further order, decrees or orders (including an order for expenses) as may seem to the court to be just and reasonable in all the circumstances of the case. 4. The petitioner challenges the actings of the Lord Chancellor in promulgating the said Order or draft Order (hereinafter referred to as the Fees Order ) on the following ground(s). 5. In Scotland, ministerial responsibility for policy as to fees in Scottish courts and devolved tribunals rests with Scottish government. However, ministerial responsibility for policy as to fees in non-devolved tribunals rests with the Lord

4 Chancellor, who has power to prescribe fees for such tribunals in terms of section 42 of the Tribunals, Courts and Enforcement Act 2013 (the Employment Tribunals ( ET ) and the Employment Appeal Tribunal ( EAT ) being added under section 42 (1) (d) and (3) by the Added Tribunals (Employment Tribunals and the Employment Appeal Tribunal) Order 2013, currently in draft but which is expected to come into force on 29 July 2013). In furtherance of his policies in this regard, in April 2013 the Lord Chancellor promulgated the Fees Order. This was accompanied by an Explanatory Memorandum; an Impact Assessment dated 15 April 2013 (there having been earlier editions of this); an Equality Impact Assessment dated 13 July 2012; and a Stakeholder Letter with Questions and Answers, dated 25 April These are all produced herewith and referred to. The Fees Order was approved by the House of Commons on 10 June It is set down for consideration in the House of Lords on 8 July It is expected that it will be approved and then made. 6. The scheme of the Fees Order is to introduce fees in the ET and the EAT. This scheme is here described briefly, but reference is made to the Fees Order as a whole. Fees are payable by the claimant in the ET and by the appellant in the EAT; fees are not generally payable by respondents. Thus, a person who seeks to bring a claim in the ET must pay a fee on lodging that claim of either 160 or 250, and on notification that the case is listed for a hearing of either 230 or 950 (article 4); a person who seeks to resist such a claim need pay no fee at either or any other stage. There is a provision for multiple claims to attract a

5 bulk discount, if they are made on the same claim form so as to constitute a fee group (defined, article 2). Thus, if over 200 claimants make a claim in one claim form, they will be liable as a fee group to pay lodging fees of either 960 or 1500 and a hearing fee of either 1380 or The higher fee is in each case payable if the claim includes a claim for equal pay or in respect of discrimination ( type B claim ); otherwise, in general the lower fee is payable (Schedule 2 tables 3 and 4). In the EAT there is no provision for bulk discounts; any appellant is liable to pay 400 for the lodging of a notice of appeal and 1200 when the matter goes to an oral hearing, even if that appeal is lodged along with those of other appellants (articles 13 and 14). In each case there is provision for remission on grounds of low income (but not for legally aided claimants or appellants as such). Thus, if for example and assuming no remissions, 1000 claimants make a combined claim for equal pay, they will be jointly and severally liable to make payments of fees of 1500 and 5700 in the ET; but if the same 1000 claimants make claims on different dates for equal pay and these are combined by the tribunal in the usual way, they will be individually liable to make payments of fees which in cumulo will be 250,000 and 950,000. In either case, if that group of claimants were to appeal to the EAT, they would be individually liable to make payments of fees which in cumulo will be 400,000 on lodging, and 1,200,000 for a hearing. Yet the typical cost of such an appeal is estimated by the first respondent in the Impact Assessment to be about 320 and 4350 at each of these two stages. If fees are not paid or successful applications for remission of fees not made, claims will not be permitted to be accepted or to

6 proceed: the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2013 (which will be in force from 29 July 2013), regulations 11 and 40. There is no similar provisions in the EAT rules, where it is believed the matter will be dealt with by practice directions issued by the third respondent. 7. By contrast, if similar claims were to be raised in Scottish courts, fee levels set by order would be far lower. If they were raised as summary causes in the Sheriff Court, which would be the generally analogous procedure and appropriate for similar claims, the lodging fee would be 71 and there would be no additional fees for adding additional claimants to a summons, or any equivalent to the hearing fee. The lodging fee would be less if the claim were for less than 200. Even if raised as an ordinary action, which in the majority of claims would be inappropriately complex, the fee for lodging an initial writ would only be 87, with further fees which correspond to a small fraction of those exigible under the Fees Order; fees for amendment to add additional claimants would be 44. In either case, the fee for lodging an appeal to the Sheriff Principal would be 55, however many appellants were combined in one appeal. Fees are also payable by defenders, at similar levels. In no Scottish devolved tribunal is any fee payable by a claimant in any comparable situation. In the Scottish courts, the system for remission of fees on grounds of means is in practice far more generous than under the Fees Order, because there is remission for all claimants with legal aid.

7 8. The petitioner acts for many thousands of claimants in equal pay and discrimination claims in Scotland. Such cases are predominantly conducted on a no win no fee basis, although the petitioner also acts for legally aided and for privately paying clients. Such claims are for the most part made by women in the case of equal pay; and by women, members of ethnic minorities, and the disabled in the case of discrimination claims. Claims which are subject to higher fees under the Fees Order are overwhelmingly made by members of such groups. Thus, to take the three largest current cases in Scotland, the petitioners current client base in equal pay claims against Glasgow City Council is 4985 of whom 4334 are women; against North Lanarkshire Council, 2728 of whom 2476 are women; and against South Lanarkshire Council, 2858 of whom 2701 are women. These proportions are typical. Generally, such claims are not, and cannot be, made on behalf of such claimants in large multiple groups; because of the rigid operation of time bar in equal pay claims, they must be raised as soon as claimants come to instruct the petitioners either singly or in small multiples. They are then combined by the ET to minimise administrative expense, but this cannot under the Fees Order result in their acquiring the right to be considered as a combined fee group; they remain liable for individual fees. Thus, in the case of Glasgow City Council v Fox Cross Claimants and Others which is currently under appeal by the employers to the Court of Session, there was a single hearing in the ET and EAT for about 3000 claimants (the petitioners representing 2487 at the date of lodging of the appeal to the EAT, and trade unions representing several hundred more). Some of the petitioners clients, it is

8 estimated at most 20%, would be entitled to full or partial remission under the Fees Order had it then been in effect; but even if only 80% had to pay fees the lodging and hearing fees in the ET, and the lodging and hearing fees in the EAT, for the other 1990 of the petitioner s clients would still have been about 497,500, 1,890,500, 796,000, and 2,388,000 respectively for those 1990 claimants. In one case against Glasgow Council which is currently at avizandum in the ET where the petitioners represent about 2500 claimants, if the decision should be require to be appealed to the EAT with the Fees Order in effect, it is estimated that the lodging fee required will be about 2,400,000 even on the assumption that as many as 20% of claimants would be entitled to remission of fees (which is a high estimate). The petitioner represents a number of other large groups of claimants whose cases have not yet gone as far as a final hearing in the ET, substantially because of what appear to be delaying tactics by some local authority respondents, although they have been in progress in the ET from as long ago as 2005 in some cases. All these claimants will become liable to pay fees if the case is determined in the ET and goes on appeal to the EAT. It has been the practice of the petitioner not to seek any form of payment to account from clients but to await the conclusion of litigation (the exception being the small proportion of clients who are privately funded), because they recognise that their clients are not well off and would expect to pay costs and fees from any award made; but it is unlikely that they could continue so to act in such circumstances. They will however be put under severe commercial pressure to pay such fees or to lend them to clients. The petitioners are aware, from their

9 knowledge of such claimants, that a high proportion would not persist in their claims if they had to pay fees at the levels set forth by the Fees Order. 9. Rules 11 and 40 of the schedule to the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2013, which come into force on 29 July 2013, provide respectively for the rejection by the ET of any claim which not accompanied by a fee or a remission application, and for the dismissal of any claim if the claimant has not paid a fee or remission granted. These rules have no practical effect unless and until the Fees Order is made and comes into force. They grant the ET no discretion in the matter except in the date to be specified for payment of the fee. Similar provision is not at present made in the rules of the EAT, where it is anticipated the matter will be dealt with by practice directions. The operation of such provisions is a matter which could be dealt with by the issue of practice directions by the second and third respondents respectively. Thus, unless appropriate practice directions are issued by the second and third respondents on this matter, there is a danger that claimants may have their cases dismissed while litigation on the legality of the Fees Order remains outstanding. The effect of the Fees Order is to oblige claimants in equal pay or discrimination cases to pay fees which (a) are far greater than the fees which are payable by claimants for analogous remedies in the ordinary courts, and are subject to a less favourable remission system by comparison to legally aided claimants in the ordinary courts, and are thus less favourable than the fees payable for access to justice in Scotland in similar domestic situations; (b) are so

10 substantial as to deter a substantial proportion of claimants from presenting or pursuing claims or appealing, and thus tend to render claims impossible in practice, or excessively difficult; (c) are indirectly discriminatory against women, ethnic minorities, and the disabled because they disproportionately affect these groups; (d) are, in mass claims such as those described, far in excess of any fair estimate of the costs incurred by the tribunal system. 10. The legal argument for the petitioner may be summarised as follows; (1), the Fees Order offends against the principle of equivalence in European law; (2), it offends against the principle of effectiveness in European law; (3), it is indirectly discriminatory without justification; (4), it was made in breach of section 149 of the Equality Act 2010; (5), in mass claims it operates perversely so as to raise revenue rather than a contribution towards costs as intended. On each of these propositions, it is ultra vires; it is recognised that there is considerable overlap between them. 11. The principle of equivalence. Claims for equal pay or in respect of discrimination in employment, whether brought under the Equality Act 2010, or under the Treaty of Functioning of the European Union, are claims which rest on European law. That was settled by Preston v Wolverhampton NHS Trust, [2001] 2 AC 415, ECJ if not indeed before, see also North v Dumfries and Galloway Council, 2013 UKSC 45 paragraph 36. It is a fundamental principle of the European legal order that national rules governing the exercise of claims which rest on European law may

11 not be framed in such a way that they are less favourable than those which govern similar claims resting on national law: see as one summary among many Bulicke v Deutsche Buro Service GmbH [2011] 1 CMLR. 9 at paragraphs 24-29, and for a summary in this Court Gillen v Inverclyde Council 2010 SLT 513 at paragraphs Similar claims, in Scots law, are actions for payment under contracts and actions for damages for breach of contract or reparation, which are typically brought in the ordinary courts. Where substantial additional costs are imposed, that is less favourable treatment: Preston, page 451H-452A. Yet, in the present case, substantial additional costs are imposed on claimants making equal pay or discrimination claims in the ET. While such claims could be brought in the sheriff court (Birmingham v Abdulla, [2012] ICR 1419) and so avoid the higher claim form fee, they would be liable to be dismissed or to be transferred to the ET and so incur the higher hearing and appeal fees: Equality Act 2010, section 128. As pointed out in Birmingham, paragraph 32, that could not be done if it were held that those fees were themselves contrary to the principle of equivalence; but meantime that is a risk that, unlike comparable domestic claims, they would face. And, although there are both in the tribunals and in the courts provisions for remission of fees, in the ET and EAT there is no provision (as in the ordinary courts) for remission for legally aided claimants as such. It is settled, authorities above, that it is for this Court to consider objectively whether the principle has been infringed; its jurisdiction is not restricted to a conventional supervisory jurisdiction over the decision-making process of the respondent and indeed calls

12 for no deference to that opinion. As the Fees Order fails this principle, it is ultra vires and should be reduced. 12. The principle of effectiveness. The legal background is substantially the same and need not be repeated, but the principle here is that the rules governing such claims may not be such as to render excessively difficult or virtually impossible the exercise of rights conferred on the applicants by Community law : Preston, paragraph 26. This is settled law. The question whether rules such as the imposition of fees make that exercise excessively difficult is, again, a question of objective fact for the Court, which, again, is not restricted to a supervisory jurisdiction. These rules do so, by imposing fees of 1200 on individual equal pay or discrimination claims even if their value is minimal; and in many cases such fees will be out of proportion to the total value of the claim as many equal pay and discrimination claims are for levels which in the Sheriff Court would be brought as small claims. As rightly noted by the Employment Judges in Scotland in their comment on consultation on the proposals (Charging Fees in Employment Tribunals and the Employment Appeal Tribunal, page 15) this leads to a significant risk that such claimants will be deterred from pursuing such claims. The Equality and Human Rights Commission, in its response to the consultation, was right to say that these proposals would make it excessively difficult for some individuals to exercise rights conferred by the EU Equality Directives: page 12. As the Fees Order fails this principle, it is ultra vires and should be reduced.

13 13. Indirect discrimination and absence of justification. For the sake of simplicity, the argument here is put by reference to discrimination on grounds of sex, although it is equally applicable mutatis mutandis to discrimination on other grounds. Claims for equal pay, or more generally for breach of the sex equality clause (for which now see Equality Act 2010, section 66), or in respect of discrimination on grounds of protected characteristics (Part 2 of that Act) are in their nature brought predominantly by women. That is exemplified in the petitioners statistics, paragraph 8 above, although the proposition is also apparent from the first respondents own Equality Impact Assessment pages 42 to 44. Accordingly, rules which treat such claims differently to other claims (paragraph 11 above) are indirectly discriminatory in terms of section 19 of the Equality Act 2010 because they tend to put women at a disadvantage. This, indeed, appears to be accepted by the first respondent, who states It could, therefore, be argued that the introduction of fees will potentially have a differential impact on those women who claim on these grounds : Equality Impact Assessment page 42. Accordingly, they are unlawful unless they can be shown (1) to have an objective justification independent of that discrimination and (2) to be proportionate to the legitimate aim pursued by the Fees Order (which is stated in the Explanatory Memorandum, paragraph 7.1, as being that those who use the employment tribunals system, and can afford to, should pay a fee as a contribution towards the cost of administering their claim or appeal ): section 19; Patmalniece v Work and Pensions Secretary, [2011] 1 WLR 783; Seldon v Clarkson Wright & Jakes [2012] ICR 716; O'Brien v Ministry of Justice [2013] 1 WLR 522; and cases there cited. This is,

14 again, for the objective consideration of the Court. Yet there is no objective justification, and none has been suggested, for imposing fees on claims which are typically brought by women which are higher than those typically brought by men. The only justification suggested is, per the Impact Assessment, that such claims are more legally complex and generally require the most amount of judicial and administrative resource. A justification which amounts to the proposition that women s claims are more troublesome than men s claims is not independent of the underlying discrimination; so it goes nowhere. It appears, accordingly, that no proper justification of this discrimination is offered by the first respondent. In any event, so far as proportion to the aims of the Fees Order are concerned, the effect of its treatment of mass equal pay claims is that such claimants will, uniquely (because such mass claims are unheard of except in equal pay litigation) pay not merely a contribution but far in excess of the actual cost: see further on this paragraph 15 below. That is also discriminatory, and again no justification in this regard is offered. 14. Public Sector Equality Duty: section 149 of the Equality Act That section provides that any public authority (such as the respondents) must, in the exercise of its functions, have due regard to the need to (a) eliminate discrimination, harassment, victimisation and any other conduct that is prohibited by or under this Act; (b) advance equality of opportunity between persons who share a relevant protected characteristic and persons who do not share it;. This duty requires public bodies to whom that provision applies to give advance consideration to issues of

15 discrimination before making any policy decision that may be affected by them. This is a salutary requirement, and this provision must be seen as an integral and important part of the mechanisms for ensuring the fulfilment of the aims of anti-discrimination legislation. It is not possible to take the view that the Secretary of State's noncompliance with that provision [is] not a very important matter. In the context of the wider objectives of anti-discrimination legislation, section [149] has a significant role to play ; Arden LJ, on the predecessor section of the Race Relations Act, in Elias v Secretary of State for Defence [2006] 1 WLR 3213 at paragraph 274. The process of assessment is not satisfied by ticking boxes. The impact assessment must be undertaken as a matter of substance and with rigor ; Moses J in Kaur and Shah v Ealing LBC, [2008] EWHC 2062 at paragraph 25. In the present case, no due regard was had to these matters. The Equality Impact Assessment noted that stakeholders were asked what they considered to be the equality impacts of the introduction of fees: page 53. The first respondent s survey of responses ( Charging Fees in Employment Tribunals and the Employment Appeal Tribunal ) noted the widespread view that there would be serious impacts, but merely noted For discussion on the equality impacts of the proposals see our equality impact assessment : page 18. The Equality Impact Assessment itself noted that it could not rule out a differential impact: pages 7-8. It stated that the proposals would mitigate the impact on equality, page 9; but nowhere is there any indication that a view was reached as to the likelihood that persons with equal pay and discrimination claims would be less likely to pursue these before the ET, although the view that respondents thought they would be less likely to do so was recorded, pages 20

16 and 23. The views of the Equality and Human Rights Commission, in its response to the consultation, had been that the proposals would have a deterrent effect on equal pay and discrimination claims, and this was both correct and called for careful consideration. The conclusion was simply that the impact could not be predicted with any certainty : page 24. The first respondent s ultimate position seems to be that he had no real idea what effect there might be, so he proposed to take no account of this. Thus the matters described in section 149 were simply left hanging. There was no due regard to the matters required by section Further, although the declared purpose of the Fees Order is to bring about a situation in which claimants (but not respondents) should contribute to the costs of the operation of the ET and the EAT by the fees described, its clear effect is that fees are charged which will be at a level which go far beyond a mere contribution. In the case of the ET, the Impact Assessment (paragraph 1.28) appears to calculate the cost of an actual hearing in an equal pay case at 3380, yet as shown by paragraph 8 the fees charged for setting down a hearing in a mass claim such as those conducted by the petitioner may be many hundred times that figure (and fees are not refunded if the hearing does not take place because the claim is settled or otherwise). In the case of the EAT, the Impact Assessment (paragraphs ) calculates the total cost of operation of the EAT throughout Great Britain as 2,500,000 per year and the cost of hearing of an appeal at 4,350, yet as shown by paragraph 8 the fees charged (which again

17 are not refunded if the hearing does not take place because the claim is settled or otherwise) for a single appeal in a single mass claim such as those conducted by the petitioner may be more than the annual cost of operation of the entire tribunal. It is visible from the impact assessments and from the stakeholders letter that such a consequence was never intended or contemplated; in the ET this is a result of the definition of fee group in the Fees Order so as to exclude the possibility of claimants joining an existing fee group, and in the EAT a result of the imposition of fees upon an appellant rather than on all those joining in a combined appeal. In the case of fees in the EAT, this is particularly unfair as it has effect upon existing claimants whose claims are already progressing in the ET. That result is perverse. 16. In all these circumstances, the Fees Order is ultra vires and the petitioners are entitled to reduction. In the event that it is held that this is so because the principle of equivalence and the comparison with domestic remedies in Scotland leads to that result, but that there is no other good ground of challenge, it is a matter for the Court whether to confine that order so as to have effect in Scotland but not other parts of Great Britain; but in principle it should not be so confined. 17. The draft order is likely to be made, in the absence of any order of the Court in this regard, on or shortly after 9 July so as to come into effect on 29 July. Whether there is a need for interim orders is dependent upon whether final

18 orders can be made before the former date; that appears improbable. The coming into effect of the Fees Order will irrevocably prejudice some potential claimants who seek to present claims to the ET, or existing claimants who seek to present a notice of appeal to the EAT, from that date, as they are liable to have that claim or notice of appeal refused unless they make payment of the fee. It is possible that proposals by the second and third respondents for practice directions in this regard might mitigate that prejudice, but none have been suggested to the petitioners knowledge. On the balance of convenience, and to protect the interests of such claimants, interim suspension of the Fees Order, whether in draft as of the present date or as made, is appropriate; and interim interdict should also be pronounced on the balance of convenience. PLEAS-IN-LAW 1. The Order complained of being ultra vires, decree of reduction should be pronounced as sought. 2. On the balance of convenience, suspension and interdict should be pronounced ad interim. According to Justice etc.

19 SCHEDULE FOR SERVICE Respondents on whom service is sought in common form: (1) The Advocate General for Scotland for and on behalf the Lord Chancellor and the Secretary of State for Justice, Office of the Solicitor to the Advocate General for Scotland, Victoria Quay, Edinburgh, EH6 6QQ. (2) The President of the Employment Tribunals for Scotland, Melville Street, Edinburgh, EH3 7HF (3) the President of the Employment Appeal Tribunal, Audit House, 58 Victoria Embankment, London, EC4Y 0DS Interested parties on whom service is sought in common form (1) the Equality and Human Rights Commission, 151 West George Street, Glasgow, G2 2JJ (2) the Lord Advocate, Legal Secretariat to the Lord Advocate, 25 Chambers Street, Edinburgh, EH1 1LA

20 SCHEDULE OF DOCUMENTS UNDER RULE OF COURT 58.6 (2) 1. Explanatory Memorandum; 2. Impact Assessment dated 15 April 2013 ; 3. Equality Impact Assessment dated 13 July 2012; 4. Stakeholder Letter with Questions and Answers, dated 25 April 2013; 5. Charging Fees in Employment Tribunals and the Employment Appeal Tribunal; summary of consultation responses, dated 13 July 2012; 6. Response of the Equality and Human Rights Commission to consultation, 14 December 2011;

21 IN THE COURT OF SESSION PETITION in the cause FOX SOLICITORS LTD PETITIONER for JUDICIAL REVIEW 2013 SM/FOX/236/2 BALFOUR + MANSON, LLP FREDERICK STREET, EDINBURGH, EH2 1LS