R (UNISON) v Lord Chancellor [2017] UKSC 51

UNISON challenged the lawfulness of fees imposed for Employment Tribunal and Employment Appeal Tribunal claims under the Fees Order 2013. The Supreme Court unanimously held the Fees Order unlawful, finding it unjustifiably restricted access to justice under common law and EU law.

Facts

The Employment Tribunals and Employment Appeal Tribunal Fees Order 2013, made by the Lord Chancellor under section 42(1) of the Tribunals, Courts and Enforcement Act 2007, introduced fees for bringing claims in Employment Tribunals (ETs) and the Employment Appeal Tribunal (EAT). Prior to its introduction in July 2013, claims could be brought without fee. The Order created a two-stage fee structure (issue fee and hearing fee), with claims classified as type A (£390 total) or type B (£1,200 total), the latter covering unfair dismissal, equal pay and discrimination claims. EAT appeals attracted fees of £1,600. A remission scheme based on disposable capital and gross monthly income tests was provided, with discretionary remission in exceptional circumstances.

The stated aims were to transfer costs from taxpayers to users, deter unmeritorious claims, and encourage earlier settlements. Following implementation, there was a dramatic and sustained fall in ET claims of approximately 66-70%. The Ministry of Justice’s own Review Report (January 2017) concluded there had been a ‘sharp, substantial and sustained fall in the volume of case receipts as a result of the introduction of fees’. UNISON challenged the Order by judicial review, supported by the Equality and Human Rights Commission and the Independent Workers Union of Great Britain as interveners. The Divisional Court and Court of Appeal dismissed the challenges.

Issues

The principal issues were:

• Whether the Fees Order was ultra vires the powers conferred by section 42(1) of the 2007 Act because it interfered unjustifiably with the constitutional right of access to justice at common law;
• Whether it contravened EU law principles of effectiveness and the right to effective judicial protection under article 47 of the Charter of Fundamental Rights;
• Whether it frustrated the operation of statutory provisions conferring employment rights;
• Whether it was indirectly discriminatory against women and other protected groups contrary to the Equality Act 2010 and EU law.

Arguments

Appellant (UNISON)

UNISON argued that the Fees Order unlawfully impeded access to justice, citing the dramatic fall in claims and evidence that fees were unaffordable or rendered claims futile, particularly for low-value or non-monetary claims. It relied on hypothetical claimants demonstrating that middle and low income households could only afford fees by sacrificing reasonable expenditure. It further argued that higher fees for type B claims indirectly discriminated against women.

Respondent (Lord Chancellor)

The Lord Chancellor argued the fees were not unlawful unless proven to prevent access to justice in specific cases. No claimant had given evidence of inability to bring a claim. The poorest qualified for full remission, and others could choose to save for fees by reducing non-essential spending. The discretionary power of remission addressed exceptional cases. Higher type B fees reflected the greater costs of those claims.

Judgment

The Supreme Court unanimously allowed the appeal and quashed the Fees Order.

Constitutional right of access to the courts

Lord Reed (with whom Lord Neuberger, Lord Mance, Lord Kerr, Lord Wilson and Lord Hughes agreed) held that the constitutional right of access to the courts is inherent in the rule of law and long established in English law, traceable to chapter 40 of Magna Carta 1215 and chapter 29 of the 1297 version. He cited Coke’s Institutes:

“And therefore, every Subject of this Realme, for injury done to him in bonis, terris, vel persona, by any other Subject … may take his remedy by the course of the Law, and have justice, and right for the injury done to him, freely without sale, fully without any deniall, and speedily without delay.”

Lord Reed emphasised that access to the courts is not merely a service for individual users but underpins the rule of law and benefits society at large. Statutory powers will not be construed as authorising interference with the right of access to justice unless clearly expressed, and even when authorised, intrusion is permitted only to the extent reasonably necessary to meet the legitimate objective (applying Raymond v Honey, Ex p Leech, Ex p Simms and R (Daly) v Secretary of State for the Home Department).

Application to the Fees Order

The Court held the Fees Order was unlawful for two principal reasons. First, it effectively prevented access to justice. The dramatic fall in claims, the Acas survey evidence, and the hypothetical examples showed that for households on low to middle incomes, fees were only payable by sacrificing ordinary and reasonable expenditure. Fees must be ‘affordable not in a theoretical sense, but in the sense that they can reasonably be afforded’ (para 93). Secondly, fees rendered the bringing of many claims futile or irrational, particularly for small awards or non-monetary claims, given the uncertainty of success, the costs of recovery, and the fact that only half of successful claimants received full payment of awards.

Justification

The Court rejected the justification advanced. The assumption that higher fees produced higher revenue was ‘elementary economics, and plain common sense’ wrong (para 100); revenue is maximised by identifying the optimal price reflecting price elasticity of demand. There was no evidence that less onerous fees would have been less effective. Nor was there evidence that the fees deterred only unmeritorious claims; indeed the proportion of successful claims fell after the Order’s introduction. The Lord Chancellor had also failed to consider the public benefits of enforcing rights conferred by Parliament.

EU law

Lord Reed held that the Fees Order was also unlawful under EU law in respect of claims to enforce EU-derived rights. Applying article 47 of the Charter and Strasbourg case law (Stankov v Bulgaria, Kniat v Poland, Kordos v Poland), proportionality was not determined solely by affordability. The fees were disproportionate, particularly in relation to claims for modest sums or non-monetary remedies.

Discrimination

Lady Hale, while agreeing with Lord Reed and noting that it was unnecessary to reach a final conclusion, considered the discrimination ground. She concluded that the higher fees for type B claims had not been shown to be a proportionate means of achieving a legitimate aim and were indirectly discriminatory against women, who disproportionately brought such claims. She doubted whether the case could properly be narrowed to discrimination claims alone, since type B claimants were all in the same position.

Remedy

The Court held the Order was unlawful ab initio and must be quashed, rejecting the Lord Chancellor’s argument that only a declaration should be granted.

Implications

The decision reaffirms that the constitutional right of access to the courts is a fundamental principle of the common law, not derived from continental jurisprudence, and that any statutory power to impose impediments on access must be clearly authorised and interpreted as permitting only such intrusion as is reasonably necessary. Subordinate legislation that effectively prevents access to justice, or renders the enforcement of statutory rights futile or irrational, will be ultra vires.

The judgment is of particular significance to employees and workers seeking to enforce statutory and EU-derived employment rights, many of which can only be vindicated in Employment Tribunals. The Court emphasised that access to justice serves wider public interests, including the deterrent effect of legislation, the development of authoritative legal guidance, and the integrity of alternative dispute resolution.

The reasoning has broader constitutional importance: it places significant limits on executive power to introduce fees or other impediments to litigation by subordinate legislation, and confirms that affordability is judged in real-world terms taking account of acceptable living standards. It also clarifies that under EU law, proportionality of restrictions on access requires consideration of factors beyond ability to pay, including the relationship between fees and the value of claims. The decision establishes that courts will assess such measures by reference to their actual impact, not merely their theoretical effects, and that evidence of dramatic deterrence may itself demonstrate unlawfulness even absent specific examples of individuals prevented from claiming.

Verdict: The appeal was allowed. The Supreme Court unanimously held that the Employment Tribunals and the Employment Appeal Tribunal Fees Order 2013 was unlawful ab initio, both under domestic common law and EU law, because it effectively prevented access to justice. The Order was quashed.

Source: R (UNISON) v Lord Chancellor [2017] UKSC 51