On 29 July 2011, for the first time, fees were introduced for Claimants bringing claims in the Employment Tribunal. At the same time the Government introduced a fee remission scheme which allowed individuals to apply for a waiver of all or part of their fees, depending on their financial circumstances.
At present there are 3 different routes for remission of fees. The Government felt that a single remission scheme across all Courts and Tribunals would be fairer and more transparent. Therefore, on 18 April 2013, they launched a consultation paper and on 9 September 2013 the MOJ published the Government’s response to the proposals.
The new scheme, due to be introduced on 7 October 2013, will mean that a single fee remission system will operate across most civil courts and tribunals by the HM Courts and Tribunals Service. It will also introduce a disposable capital test to the eligibility criteria for determining whether someone is eligible to have part or all of their fees remitted.
The new scheme
The new scheme will introduce a 2 stage test which applicants must satisfy in order to be eligible for a full or partial fee remission. The new scheme will only be available to individuals, not businesses or organisations. The applicant’s partner, defined as a person with whom the applicant lives or usually lives, will be taken into account under both stages of the test. Any application for a fee remission must be made at the time when the fee is due to be paid.
The disposable capital test
The first aspect of the test looks at a person’s disposable capital. If it is above certain thresholds they will not pass the test and so will not be entitled to any fee remission.
‘Disposable capital’ means the value of every resource of a capital nature belonging to the applicant, and any partner, on the date on which the fee remission application is made. Income is not considered as ‘disposable capital.’ Certain other items are also expressly excluded such as the value of the property which is the applicant’s main or only home.
There are also different rules for determining the value of the capital depending on how it is held. In the absence of anything to the contrary, if an asset is jointly held then it is presumed to be held in equal shares.
Under the new scheme, rather than having to adduce evidence as to the value of their disposable capital, the applicant must sign a statement of truth on the remission application form. In cases of doubt the applicant can be asked for documentary evidence as to their disposable capital.
By way of example, for fees up to £1,000, if the applicants’ disposable capital is less than £3,000 then they will be entitled to a fee remission, the amount of which will be determined by the second, gross monthly income test.
The Gross Monthly Income Test
Once the applicant has passed the disposable capital test, the gross monthly income test applies to determine the amount of fee remission they are entitled to.
This aspect of the test applies thresholds to the individual or couple, together with an allowance for any dependent children that they have. An applicant’s gross monthly income is determined by reference to their total monthly income in the month before the fee remission application is made. It includes all sources of income other than certain excluded benefits.
When making an application the applicant will need to supply certain documentary evidence such as 3 months’ worth of bank statements and original wage slips.
The amount of remission that the applicant will be entitled to depends on which threshold their gross monthly income falls into. These thresholds vary depending on how many children the applicant has and whether they are single or have a partner.
By way of example, for a single applicant with no children, to be entitled to a full remission their gross monthly income must not exceed £1,085. There are different thresholds depending on the applicant’s circumstances. For every £10 over this threshold, and the other thresholds set out in the legislation, the applicant will have to make a £5 contribution towards their fee. If an applicant’s gross income exceeds the thresholds by £4,000 they will have to pay the fee in full.
The future of the fee scheme
At present there are 2 cases for judicial review of the tribunal’s fee regime pending in the courts. The MOJ have said that they will refund any tribunal fees paid if the fee system is held to be unlawful.