R v Lord Chancellor

A statutory power to prescribe tribunal fees does not authorise measures which effectively prevent access to justice. Fees are unlawful where there is a real risk that people cannot reasonably afford them, or where their relationship to the value or nature of claims makes litigation futile or irrational. Affordability must be assessed in the real world. People cannot be required to sacrifice ordinary and reasonable expenditure needed for an acceptable standard of living.

Any intrusion upon the constitutional right of access must be clearly authorised and no greater than reasonably necessary to achieve a legitimate objective. Subordinate legislation also cannot render statutory rights nugatory. Under EU law, ability to pay is only one factor in assessing whether a financial restriction is proportionate.

The appellant trade union sought judicial review of the Employment Tribunals and the Employment Appeal Tribunal Fees Order 2013. The Order required claimants to pay issue and hearing fees in employment tribunals and the Employment Appeal Tribunal. The evidence disclosed a sharp, substantial and sustained fall in claims after the fees were introduced, with a particularly marked deterrent effect upon low-value and non-monetary claims.

Two claims for judicial review were dismissed by differently constituted Divisional Courts. The resulting appeals were joined and dismissed by the Court of Appeal in [2015] EWCA Civ 935. That court treated realistic unaffordability as the decisive issue under EU law.

The central question before the Supreme Court was whether the fees were unlawful because they impeded access to justice, frustrated statutory employment rights, contravened EU law or produced unjustified indirect discrimination.

1. Appeal allowed unanimously. Lord Reed delivered the leading judgment, with which all the other Justices agreed. The Employment Tribunals and the Employment Appeal Tribunal Fees Order 2013 was unlawful from the outset and had to be quashed.

2. The constitutional right of access to courts and tribunals is inherent in the rule of law. Courts do not merely provide a service to individual litigants. Their accessibility ensures that legislation and the common law are enforced, supports orderly social and economic relations, and enables disputes to be resolved fairly. An executive impediment to that right requires clear statutory authority.

3. Section 42(1) of the Tribunals, Courts and Enforcement Act 2007 authorised the prescription of fees but contained no words authorising the prevention of access to the relevant tribunals. The power was also subject to an implied limitation: any intrusion upon access could be no greater than was reasonably necessary to achieve the legitimate objectives of the fees regime.

4. The evidence, considered realistically and as a whole, established a real risk that the fees prevented access to justice. Claims fell by about 66–70%. The remission scheme was too restricted to answer this systemic problem. Fees are not reasonably affordable where low- to middle-income households can pay them only by sacrificing ordinary and reasonable expenditure required for an acceptable standard of living.

5. Effective prevention is not confined to unaffordability. Fees also obstruct access when they make proceedings futile or irrational. That occurred where substantial fees were charged for non-monetary claims or claims worth only modest sums, particularly given uncertainty of success and the significant risk that a successful award would remain unpaid.

6. Less onerous fees or a more generous remission scheme had not been shown to be less effective in transferring costs to users. Nor had the prescribed fees been shown to promote settlements or deter weak or vexatious claims. The Order also rendered statutory employment rights nugatory and imposed disproportionate restrictions upon EU-derived rights. Ability to pay was only one factor in that proportionality assessment.

7. Lady Hale, in reasoning agreed by the whole court but unnecessary to the disposition, concluded that the higher fees for type B claims had a disparate impact upon women and had not been shown to be a proportionate means of achieving the regime’s aims.

1. United Kingdom Supreme Court: The appeal was allowed unanimously in [2017] UKSC 51. The Employment Tribunals and the Employment Appeal Tribunal Fees Order 2013 was quashed as unlawful from its inception.
2. Court of Appeal: The joined appeals were dismissed in [2015] EWCA Civ 935; [2016] ICR 1. The court held that interference under EU law depended upon whether the fees made access impossible in practice through unaffordability.
3. Divisional Court—second judicial review: The claim was dismissed in [2014] EWHC 4198 (Admin); [2015] ICR 390. Permission to appeal was granted on effectiveness and discrimination.
4. Divisional Court—first judicial review: The claim was dismissed as premature and unsupported by sufficiently robust evidence in [2014] EWHC 218 (Admin); [2014] ICR 498.