Martin Partington: Spotlight on the Justice System

The Department for Business, Innovation and Skills is seeking views from UK stakeholders on recent proposals from the European Commission on consumer alternative dispute resolution. In summary, the Commission argue that all EU consumers should be able to solve their problems without going to court, regardless of the kind of product or service that the contractual dispute is about and regardless of where they bought it in the European Single Market.

In addition, for consumers shopping online and from another EU country, the Commission want to create an EU-wide single online platform which will allow contractual disputes to be solved entirely online and within 30 days.

As the proposals are likely to impact UK consumers, businesses and organisations that currently provide alternative dispute resolution services, the Department is particularly anxious to receive views on the likely scale of these impacts. Views received will help form the UK’s negotiating position.

The consultation has been running since November 2011, and closes at the end of January 2012.

The full consultation can be found at http://www.bis.gov.uk/Consultations/call-for-evidence-eu-proposals-dispute-resolution?cat=open

Just before Christmas 2011, the Government published a Consultation Paper proposing that those wanting to use the Employment Tribunal should be required to pay a fee to do so; at present access is free.

The Government argues that it has to reduce the £84 million cost currently borne by the taxpayer. Fees are an obvious way to do this. At the same time, it is suggested that fees may deter some people from using Employment Tribunals, thereby reducing the case load, which has expanded rapidly in recent years.

The consultation  puts forward two options for consideration:

• Option 1: an initial fee of between £150-£250 for a claimant to begin a claim, with an additional fee of between £250-£1250 if the claim goes to a hearing, with no limit to the maximum award; or
• Option 2: a single fee of between £200-£600 – but this would limit the maximum award to £30,000 – with the option of an additional fee of £1,750 for those who seek awards above this amount.

In both options the tribunal would be given the power to order the unsuccessful party to reimburse fees paid by the successful party.

The Government, consistently with its policy in the civil justice arena of encouraging out of court settlement, states that it will continue to fund the cost of  the Conciliation Service ACAS, which helps people in employment disputes reach agreement without the need for legal proceedings, and is free to users.

The Government also argues that introducing fees will bring employment tribunals into line with civil courts where claimants already pay a fee to use the service. The paper states that, just like in civil courts, the Government will also continue to fund a system of fee waivers for those who cannot afford to pay.

Although many may think that these proposals are sensible, they mark another step in the development of the tribunal system, which until recently has been more or less free to users. There have been recent moves to introduce fees in immigration and asylum hearings. The development in relation to employment tribunals could lead to similar moves in other contexts as well, for example land and property disputes or tax disputes that are dealt with by tribunals.

My view is that, while politically it may make sense for each of these initiatives to occur individually, there should be a much more open discussion about the implications of a general policy to make tribunals more like courts through the incremental imposition of fees. A discussion of this broad principle should not be allowed to go by default.

The present consultation runs until March 2012; the Government has announced that no change is likely before 2013/14.

To read the Consultation, go to http://www.justice.gov.uk/consultations/et-fee-charging-regime-cp22-2011.htm

Unlike the stock market changes some years back, when a revolution in trading practice took place overnight, the potential revolution in the delivery of legal services is taking place at a considerably more gentle pace. But an important step forward was taken on 3 Jan 2012, when the Solicitors Regulation Authority acquired the right to licence new forms of legal practice, envisaged by the Legal Services Act 2007 and the Clementi Report that preceded it.

Press stories have indicated, for example, that there is at least one firm of solicitors contemplating a share flotation to raise the capital it regards as necessary to expand its businesses. The co-op is widely reported to be wanting to add the provision of legal services to its portfolio of service activity (such as banking and funeral directors).

Well the ground is now clear for these necessary permissions to be sought. My expectation is that overall progress will be slow to start with, but that as lawyers begin to see the opportunities offered by new business models, there will be a gradual transformation in the legal services market.

The Ministerial claim that consumers will benefit from a more competitive legal services market will not be realised overnight; but I am sure that in 5 years time, there will be considerable change. Watch this space.