Over
the last few months, due to pressure from lobby groups and the introduction of
the Human Rights Act 1998 (HRA), the Government has proposed changes to the
employment tribunal system, particularly concerning the appointment of tribunal
members and the rules on costs.
The
changes are good news for employers who often come under pressure to settle
weak claims on a commercial basis because legal costs are generally
irrecoverable in the tribunal. It is possible that, in a year or two, the
present system will be radically reformed.
Changes
and proposals
The
traditional tribunal of a fully qualified chairman and two lay members is
unlikely to be altered. Changes have been made to the system of appointing lay
members, however. Until recently, one lay member was generally nominated by
business groups (such as the CBI), and the other by employee groups (such as
the TUC). However, the Government has undertaken a programme to recruit lay
members in a different way, encouraging applications from women, minorities and
the disabled, currently under-represented. Unions and business groups have now
effectively lost their grip on appointments. The next round of recruitment will
be in 2002.
The
system of appointing lay members has also become problematic because of the
HRA. At present, the Lord Chancellor, who is “independent” from the Government,
appoints the tribunal chairmen, but a government department, the DTI, appoints
the lay members. It has been argued that the DTI appointing lay members might
be contrary to the HRA’s guarantee of a right to be heard by an independent,
impartial tribunal. It opens up the possibility of political interference in
judging, and creates a conflict of interest where public bodies are involved in
litigation.
Issue
of costs
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The
Government has started to overhaul the rules governing tribunal costs. It has
raised the maximum deposit for weak cases in pre-hearing reviews from £150 to
£500. This will not be of great significance, however, because very few
pre-hearing reviews take place at the moment due to their expense.
At
present there is no rule that the loser pays the winner’s legal costs. Costs
are awarded only if a party has behaved in a frivolous, vexatious, oppressive
or otherwise unreasonable way in bringing or conducting proceedings. Costs
awards are made in less than 2 per cent of cases and are generally under £500.
The Government proposes new powers for tribunals to award costs of up to
£10,000, which has pleased small business groups. The DTI is still consulting
on the issue and is considering other ideas for reform, including “loser pays”.
This would encourage litigants to settle their differences but would cause
disincentives to claimants.
