Monthly Archives: February 2016

“Forum Shopping” – Scotland takes control of its Employment Tribunals

Following the narrow vote in favour of Scotland remaining in the United Kingdom in September 2014, the UK government promised a raft of new powers to the devolved administration in Scotland. The Scotland Bill, currently being considered by the Westminster Parliament, is the legislation via which these new powers will be granted.

One proposal in the Scotland Bill is the devolution of tribunals. The control of tribunals is currently a matter reserved to the UK government. However, the new legislation would give the Scottish government power over all tribunals in Scotland, including the power to determine fees. The Scottish government, in its 2015-16 programme for government, has pledged to use this power to abolish employment tribunal fees, which have been charged to claimants seeking to access employment tribunals across the UK since July 2013.

The introduction of employment tribunal fees has been controversial across the UK, with the Green Party and the Labour Party calling for the reduction or abolition of fees, and a high-profile judicial review challenge by the trade union Unison, which was dismissed by the Court of Appeal in August 2015 (Unison has sought permission to appeal to the Supreme Court). However, the proposed abolition of fees in Scotland could be equally controversial, due to concerns about claimants “forum shopping”.

There is already some anecdotal evidence of employment claimants seeking to avoid employment tribunal fees by bringing low-value claims (e.g. for unlawful deduction of wages or breach of contract) in the County Court, where the fees are much lower. David Latham (former President of the Employment Tribunal in England and Wales) and Richard Fox (head of employment at Kingsley Napley solicitors) suggested as much to the Law Society Gazette in June 2014. It is possible that this accounts for a part (although certainly not the whole, and probably not even the majority) of the drop in the number of employment tribunal claims since fees were introduced.

However, if the Scottish government’s proposals for employment tribunals remain in their current form, employment tribunals in England and Wales could see their caseload reduced still further by claimants bringing cases in Scotland, rather than in England and Wales. This is due to a combination of the proposed abolition of fees and the proposal that Scottish employment tribunals be given jurisdiction over so-called “concurrent cases”.

The “concurrent case” proposal means that a claimant could bring a case against an employer whose business is headquartered in Scotland, even if the claimant is based elsewhere in the UK. If this proposal were to be implemented together with the abolition of fees in Scotland, it seems very likely that claimants based outside Scotland will look to bring claims in Scotland wherever possible. Both employers’ organisations, such as the Glasgow Chamber of Commerce, and lawyers such as the solicitors’ firm DLA Piper, have expressed concern about “forum shopping”, in terms of the burden it would place on employers facing an upsurge in employment tribunal claims and the administrative burden it would place on the Scottish employment tribunal system.

However, others have suggested that the majority of claimants in other parts of the UK will not find it financially worthwhile to pay for travel and (possibly) accommodation in Scotland simply to avoid employment tribunal fees. The future of the fees regime in England and Wales is also uncertain. Unison’s application for permission to appeal to the Supreme Court is still pending. Moreover, two reviews of tribunal fees are underway. The Ministry of Justice announced a review in June 2015, whilst the Justice Select Committee will examine employment tribunal fees as part of its inquiry into fee increases across the courts and tribunals. Neither review is likely to recommend the abolition of employment tribunal fees in England and Wales. However, it is plausible that employment tribunal fees could be lowered, further reducing the saving to be made by travelling to Scotland.

This is undoubtedly an area that both employers and employees will be watching closely in the coming months. There are so many permutations that it is not advisable to attempt to predict a final outcome. However, what can be said with some certainty is that the long-running controversy over employment tribunal fees shows no sign of dying down.