“THE CONSTITUTIONAL RIGHT OF ACCESS TO THE COURTS IS INHERENT IN THE RULE OF LAW”: THE JUDGMENT OF THE SUPREME COURT: EDITED HIGHLIGHTS

 The decision of the Supreme Court in UNISON, R (on the application of) v Lord Chancellor [2017] UKSC 51 may have wide ramifications. Certainly its impact will go well beyond employment law.  The Supreme Court set out, in clear and absolute terms, the importance of access to justice and the courts. Here I do no more than set out the passages of general relevance, not only to litigators but society as a whole.

“The constitutional right of access to the courts is inherent in the rule of law. The importance of the rule of law is not always understood. Indications of a lack of understanding include the assumption that the administration of justice is merely a public service like any other, that courts and tribunals are providers of services to the “users” who appear before them, and that the provision of those services is of value only to the users themselves and to those who are remunerated for their participation in the proceedings. The extent to which that viewpoint has gained currency in recent times is apparent from the consultation papers and reports discussed earlier”

THE CASE

The trade union Unison brought an action claiming that the introduction of fees for Employment Tribunal cases was invalid. Unison was successful.

THE COMPARISON WITH COURT FEES

Comparison with court fees

20.             Many claims which can be brought in ETs are for modest financial amounts. The fee structure is however very different from that applied to small claims in the County Court. ET fees for single claimants are set at one of two fixed rates: £390 for type A claims, and £1,200 for type B claims. The difference reflects the tribunal time which the claims are expected to require, and therefore has the effect of penalising claimants according to the complexity of their claims. Although most claims of a kind attracting low monetary awards tend to be classified as type A, the fees prescribed by the Fees Order bear no direct relation to the amount sought, and can therefore be expected to act as a deterrent to claims for small amounts and non-monetary claims. In the County Court, on the other hand, fees for small claims are graduated according to the value of the claim. For claims issued online, they begin at £50 for claims up to £300, and rise in stages to £745 for claims between £5,000 and £10,000. The fee structure has thus been designed in a way which is likely to have a less deterrent effect on the bringing of small claims. There is also no penalty for bringing a complex claim rather than a simple one. It is only once a claim exceeds £3,000 that the fees payable in the County Court exceed the ET fees for a type A claim. Even the highest fees in the County Court for small claims are well below the ET fees for type B claims.

FEES INCREASED THE PERCENTAGE OF CASES OF UNMERITORIOUS CLAIMS

57.             A secondary objective of the introduction of fees was to deter the bringing of unmeritorious claims. The Review Report analysed the outcomes of single claims which had been presented after fees were introduced, and compared them with the outcome of cases during the three quarters preceding the introduction of fees. The results show that the proportion of successful claims has been consistently lower since fees were introduced, while the proportion of unsuccessful claims has been consistently higher. The tribunal statistics, which record the figures for all claims, show the same trend. The Lord Chancellor accepts that there is no basis for concluding that only stronger cases are being litigated.

BUT THE BEST BITS FOR LAWYERS (AND SOCIETY AS A WHOLE)

“The constitutional right of access to the courts

66. The constitutional right of access to the courts is inherent in the rule of law. The importance of the rule of law is not always understood. Indications of a lack of understanding include the assumption that the administration of justice is merely a public service like any other, that courts and tribunals are providers of services to the “users” who appear before them, and that the provision of those services is of value only to the users themselves and to those who are remunerated for their participation in the proceedings. The extent to which that viewpoint has gained currency in recent times is apparent from the consultation papers and reports discussed earlier. It is epitomised in the assumption that the consumption of ET and EAT services without full cost recovery results in a loss to society, since “ET and EAT use does not lead to gains to society that exceed the sum of the gains to consumers and producers of these services”.

67. It may be helpful to begin by explaining briefly the importance of the rule of law, and the role of access to the courts in maintaining the rule of law. It may also be helpful to explain why the idea that bringing a claim before a court or a tribunal is a purely private activity, and the related idea that such claims provide no broader social benefit, are demonstrably untenable.

68. At the heart of the concept of the rule of law is the idea that society is governed by law. Parliament exists primarily in order to make laws for society in this country. Democratic procedures exist primarily in order to ensure that the Parliament which makes those laws includes Members of Parliament who are chosen by the people of this country and are accountable to them. Courts exist in order to ensure that the laws made by Parliament, and the common law created by the courts themselves, are applied and enforced. That role includes ensuring that the executive branch of government carries out its functions in accordance with the law. In order for the courts to perform that role, people must in principle have unimpeded access to them. Without such access, laws are liable to become a dead letter, the work done by Parliament may be rendered nugatory, and the democratic election of Members of Parliament may become a meaningless charade. That is why the courts do not merely provide a public service like any other.

69. Access to the courts is not, therefore, of value only to the particular individuals involved. That is most obviously true of cases which establish principles of general importance. When, for example, Mrs Donoghue won her appeal to the House of Lords (Donoghue v Stevenson [1932] AC 562), the decision established that producers of consumer goods are under a duty to take care for the health and safety of the consumers of those goods: one of the most important developments in the law of this country in the 20th century. To say that it was of no value to anyone other than Mrs Donoghue and the lawyers and judges involved in the case would be absurd. The same is true of cases before ETs. For example, the case of Dumfries and Galloway Council v North [2013] UKSC 45; [2013] ICR 993, concerned with the comparability for equal pay purposes of classroom assistants and nursery nurses with male manual workers such as road workers and refuse collectors, had implications well beyond the particular claimants and the respondent local authority. The case also illustrates the fact that it is not always desirable that claims should be settled: it resolved a point of genuine uncertainty as to the interpretation of the legislation governing equal pay, which was of general importance, and on which an authoritative ruling was required.

70. Every day in the courts and tribunals of this country, the names of people who brought cases in the past live on as shorthand for the legal rules and principles which their cases established. Their cases form the basis of the advice given to those whose cases are now before the courts, or who need to be advised as to the basis on which their claim might fairly be settled, or who need to be advised that their case is hopeless. The written case lodged on behalf of the Lord Chancellor in this appeal itself cites over 60 cases, each of which bears the name of the individual involved, and each of which is relied on as establishing a legal proposition. The Lord Chancellor’s own use of these materials refutes the idea that taxpayers derive no benefit from the cases brought by other people.

71. But the value to society of the right of access to the courts is not confined to cases in which the courts decide questions of general importance. People and businesses need to know, on the one hand, that they will be able to enforce their rights if they have to do so, and, on the other hand, that if they fail to meet their obligations, there is likely to be a remedy against them. It is that knowledge which underpins everyday economic and social relations. That is so, notwithstanding that judicial enforcement of the law is not usually necessary, and notwithstanding that the resolution of disputes by other methods is often desirable.

72. When Parliament passes laws creating employment rights, for example, it does so not merely in order to confer benefits on individual employees, but because it has decided that it is in the public interest that those rights should be given effect. It does not envisage that every case of a breach of those rights will result in a claim before an ET. But the possibility of claims being brought by employees whose rights are infringed must exist, if employment relationships are to be based on respect for those rights. Equally, although it is often desirable that claims arising out of alleged breaches of employment rights should be resolved by negotiation or mediation, those procedures can only work fairly and properly if they are backed up by the knowledge on both sides that a fair and just system of adjudication will be available if they fail. Otherwise, the party in the stronger bargaining position will always prevail. It is thus the claims which are brought before an ET which enable legislation to have the deterrent and other effects which Parliament intended, provide authoritative guidance as to its meaning and application, and underpin alternative methods of dispute resolution.

73. A Lord Chancellor of a previous generation put the point in a nutshell, in a letter to the Treasury:

“(i)      Justice in this country is something in which all the Queen’s subjects have an interest, whether it be criminal or civil.

(ii)       The courts are for the benefit of all, whether the individual resorts to them or not.

(iii)     In the case of the civil courts the citizen benefits from the interpretation of the law by the Judges and from the resolution of disputes, whether between the state and the individual or between individuals.”

(Genn, Judging Civil Justice (2010), p 46, quoting a letter written by Lord Gardiner in 1965)

74. In English law, the right of access to the courts has long been recognised. The central idea is expressed in chapter 40 of the Magna Carta of 1215 (“Nulli vendemus, nulli negabimus aut differemus rectum aut justiciam”), which remains on the statute book in the closing words of chapter 29 of the version issued by Edward I in 1297:

“We will sell to no man, we will not deny or defer to any man either Justice or Right.”

Those words are not a prohibition on the charging of court fees, but they are a guarantee of access to courts which administer justice promptly and fairly.

75. The significance of that guarantee was emphasised by Sir Edward Coke in Part 2 of his Institutes of the Laws of England (written in the 1620s, but published posthumously in 1642). Citing chapter 29 of the 1297 charter, he commented:

“And therefore, every Subject of this Realme, for injury done to him in bonis, terris, vel persona [in goods, in lands, or in person], 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. Hereby it appeareth, that Justice must have three qualities, it must be Libera, quia nihil iniquius venali Justitia; Plena, quia Justitia non debet claudicare; & Celeris, quia dilatio est quaedam negatio [Free, because nothing is more iniquitous than saleable justice; full, because justice ought not to limp; and speedy, because delay is in effect a denial]; and then it is both Justice and Right.” (1809 ed, pp 55-56)

More than a century later, Blackstone cited Coke in his Commentaries on the Laws of England (1765-1769), and stated:

“A … right of every [man] is that of applying to the courts of justice for redress of injuries. Since the law is in England the supreme arbiter of every man’s life, liberty, and property, courts of justice must at all times be open to the subject, and the law be duly administered therein.” (Book I, Chapter 1, “Absolute Rights of Individuals”)

76. In more modern times, many examples can be found of judicial recognition of the constitutional right of unimpeded access to the courts (as Lord Diplock described it in Attorney General v Times Newspapers Ltd [1974] AC 273, 310, and again in Bremer Vulkan Schiffbau und Maschinenfabrik v South India Shipping Corpn Ltd [1981] AC 909, 977), which can only be curtailed by clear statutory enactment. Thus, in In re Boaler [1915] 1 KB 21, where the question was whether a statutory prohibition on vexatious litigants instituting legal proceedings extended to criminal proceedings, the Court of Appeal held that it did not. Scrutton J said at p 36 that although a statute might deprive a subject of the right to appeal to the courts, “the language of any such statute should be jealously watched by the courts, and should not be extended beyond its least onerous meaning unless clear words are used to justify such extension.” Similarly, in Chester v Bateson [1920] 1 KB 829, where delegated legislation prohibited the bringing of certain legal proceedings without a minister’s consent, the Divisional Court held that the regulation was invalid. Avory J stated that “nothing less than express words in the statute taking away the right of the King’s subjects of access to the courts of justice would authorize or justify it” (p 836). To similar effect was the decision of the House of Lords in R & W Paul Ltd v The Wheat Commission [1937] AC 139, where an arbitration scheme established by delegated legislation disapplied the Arbitration Act 1889, under which arbitrators could state a special case for the opinion of the court on a point of law. That element of the scheme had not been expressly authorised by the enabling legislation, and was held to be ultra vires. As Viscount Simonds observed in Pyx Granite Co Ltd v Ministry of Housing and Local Government [1960] AC 260, 286:

“It is a principle not by any means to be whittled down that the subject’s recourse to Her Majesty’s courts for the determination of his rights is not to be excluded except by clear words.”

77. Another important general statement was made by Lord Diplock in Attorney General v Times Newspapers Ltd at p 309:

“The due administration of justice requires first that all citizens should have unhindered access to the constitutionally established courts of criminal or civil jurisdiction for the determination of disputes as to their legal rights and liabilities; secondly, that they should be able to rely upon obtaining in the courts the arbitrament of a tribunal which is free from bias against any party and whose decision will be based upon those facts only that have been proved in evidence adduced before it in accordance with the procedure adopted in courts of law; and thirdly that, once the dispute has been submitted to a court of law, they should be able to rely upon there being no usurpation by any other person of the function of that court to decide it according to law.”

78. Most of the cases so far mentioned were concerned with barriers to the bringing of proceedings. But impediments to the right of access to the courts can constitute a serious hindrance even if they do not make access completely impossible. More recent authorities make it clear that any hindrance or impediment by the executive requires clear authorisation by Parliament. Examples include Raymond v Honey [1983] 1 AC 1, where prison rules requiring a prison governor to delay forwarding a prisoner’s application to the courts, until the matter complained of had been the subject of an internal investigation, were held to be ultra vires; and R v Secretary of State for the Home Department, Ex p Anderson [1984] QB 778, where rules which prevented a prisoner from obtaining legal advice in connection with proceedings that he wished to undertake, until he had raised his complaint internally, were also held to be ultra vires.

79. The court’s approach in these cases was to ask itself whether the impediment or hindrance in question had been clearly authorised by primary legislation. In Raymond v Honey, for example, Lord Wilberforce stated at p 13 that the statutory power relied on (a power to make rules for the management of prisons) was “quite insufficient to authorise hindrance or interference with so basic a right” as the right to have unimpeded access to a court. Lord Bridge of Harwich added at p 14 that “a citizen’s right to unimpeded access to the courts can only be taken away by express enactment”.

80. Even where a statutory power authorises an intrusion upon the right of access to the courts, it is interpreted as authorising only such a degree of intrusion as is reasonably necessary to fulfil the objective of the provision in question. This principle was developed in a series of cases concerned with prisoners. The first was R v Secretary of State for the Home Department, Ex p Leech [1994] QB 198, which concerned a prison rule under which letters between a prisoner and a solicitor could be read, and stopped if they were of inordinate length or otherwise objectionable. The rule did not apply where the letter related to proceedings already commenced, but the Court of Appeal accepted that it nevertheless created an impediment to the exercise of the right of access to justice in so far as it applied to prisoners who were seeking legal advice in connection with possible future proceedings. The question was whether the rule was authorised by a statutory power to make rules for the regulation of prisons. That depended on whether an objective need for such a rule, in the interests of the regulation of prisons, could be demonstrated. As Steyn LJ, giving the judgment of the court, stated at p 212:

“The question is whether there is a self-evident and pressing need for an unrestricted power to read letters between a prisoner and a solicitor and a power to stop such letters on the ground of prolixity and objectionability.”

The evidence established merely a need to check that the correspondence was bona fide legal correspondence. Steyn LJ concluded:

“By way of summary, we accept that [the statutory provision] by necessary implication authorises some screening of correspondence passing between a prisoner and a solicitor. The authorised intrusion must, however, be the minimum necessary to ensure that the correspondence is in truth bona fide legal correspondence.” (p 217)

81. The decision in Leech was endorsed and approved by the House of Lords in R v Secretary of State for the Home Department, Ex p Simms [2000] 2 AC 115, which arose from a prohibition on visits to serving prisoners by journalists seeking to investigate whether the prisoners had, as they claimed, been wrongly convicted, except on terms which precluded the journalists from making professional use of the material obtained during such visits. The House considered whether the Home Secretary’s evidence showed a pressing need for a measure which restricted prisoners’ attempts to gain access to justice, and found none.

82. A similar approach was adopted in R (Daly) v Secretary of State for the Home Department [2001] UKHL 26; [2001] 2 AC 532, which concerned a policy that prisoners must be absent from their cells when legal correspondence kept there was examined. Lord Bingham of Cornhill, with whose speech the other members of the House agreed, summarised the effect of the earlier authorities concerning prisoners, including Raymond v Honey, Ex p Anderson, and Ex p Leech:

“Among the rights which, in part at least, survive [imprisonment] are three important rights, closely related but free standing, each of them calling for appropriate legal protection: the right of access to a court; the right of access to legal advice; and the right to communicate confidentially with a legal adviser under the seal of legal professional privilege. Such rights may be curtailed only by clear and express words, and then only to the extent reasonably necessary to meet the ends which justify the curtailment.” (pp 537-538)

After an examination of the evidence, Lord Bingham concluded that “the policy provides for a degree of intrusion into the privileged legal correspondence of prisoners which is greater than is justified by the objectives the policy is intended to serve, and so violates the common law rights of prisoners” (para 21). Since that degree of intrusion was not expressly authorised by the relevant statutory provision, it followed that the Secretary of State had no power to lay down the policy.

83. Finally, in this overview of the common law authorities, it is necessary to note two cases concerned with court fees. First, the case of R v Lord Chancellor, Ex p Witham [1998] QB 575 concerned court fees prescribed by the Lord Chancellor under a statutory power. The order in question repealed a power to reduce or remit the fees on grounds of undue financial hardship in exceptional circumstances. The order had been made with the concurrence of all four Heads of Division, as well as the Treasury. It had also been laid before Parliament. The applicant was in receipt of income support of £58 per week, and wished to bring proceedings. The prescribed fee was either £120 or £500, depending on the amount claimed. The applicant said that he could not afford to pay a fee of either amount. There was also evidence that a person on income support could not afford the £10 fee to set aside a default judgment in debt proceedings, and that another person on income support who was facing eviction could not afford the £20 fee to be joined in possession proceedings. Laws J, with whom Rose LJ agreed, said that he saw no reason not to accept what was said, and concluded that there was a variety of situations in which persons on very low incomes were in practice denied access to the courts.

84. Laws J accepted that, notwithstanding the wide discretion seemingly conferred on the Lord Chancellor by the relevant statutory provision, there were implied limitations upon his powers: the relevant provision did not “permit him to exercise the power in such a way as to deprive the citizen of what has been called his constitutional right of access to the courts” (p 580). The rule-making power in the primary legislation contained “nothing to alert the reader to any possibility that fees might be imposed in circumstances such as to deny absolutely the citizen’s right of access to the Queen’s courts” (p 586). Since that was the practical effect of the fees, the order was declared unlawful.

85. The second case is the decision of the Divisional Court in R (Hillingdon London Borough Council) v Lord Chancellor (Law Society intervening) [2008] EWHC 2683 (Admin); [2009] 1 FLR 39. The case concerned fees payable by local authorities in connection with applications made in public law family cases. The court rejected the Government’s argument that the lawfulness of the fees orders depended on whether local authorities would (or there was a real risk that they would) be required to act inappropriately by failing to make applications which objectively should be made. Dyson LJ stated that the impact of the fees orders “must be considered in the real world” (para 61). The relevant question was therefore “whether there was a real risk that the increase in fees will cause local authorities not to make applications which objectively should be made” (ibid).

The right of access to justice in the present case

86. The 2007 Act does not state the purposes for which the power conferred by section 42(1) to prescribe fees may be exercised. There is however no dispute that the purposes which underlay the making of the Fees Order are legitimate. Fees paid by litigants can, in principle, reasonably be considered to be a justifiable way of making resources available for the justice system and so securing access to justice. Measures that deter the bringing of frivolous and vexatious cases can also increase the efficiency of the justice system and overall access to justice.

87. The Lord Chancellor cannot, however, lawfully impose whatever fees he chooses in order to achieve those purposes. It follows from the authorities cited that the Fees Order will be ultra vires if there is a real risk that persons will effectively be prevented from having access to justice. That will be so because section 42 of the 2007 Act contains no words authorising the prevention of access to the relevant tribunals. That is indeed accepted by the Lord Chancellor.

88. But a situation in which some persons are effectively prevented from having access to justice is not the only situation in which the Fees Order might be regarded as ultra vires. As appears from such cases as Leech and Daly, even where primary legislation authorises the imposition of an intrusion on the right of access to justice, it is presumed to be subject to an implied limitation. As it was put by Lord Bingham in Daly, the degree of intrusion must not be greater than is justified by the objectives which the measure is intended to serve.

89. There is an analogy between the latter principle and the principle of proportionality, as developed in the case law of the European Court of Human Rights. These proceedings are not based on the Human Rights Act 1998, since the appellant is not a “victim” within the meaning of section 7(1) of that Act. Nevertheless, the case law of the Strasbourg court concerning the right of access to justice is relevant to the development of the common law. It will be considered in the context of the case based on EU law, on which it also has a bearing. To anticipate that discussion, however, it is clear that the ability of litigants to pay a fee is not determinative of its proportionality under the Convention. That conclusion supports the view, already arrived at by the common law, that even an interference with access to the courts which is not insurmountable will be unlawful unless it can be justified as reasonably necessary to meet a legitimate objective.

Does the Fees Order effectively prevent access to justice?

90. It is therefore necessary to consider, first, whether the Fees Order effectively prevents some persons from having access to justice. It is argued on behalf of the Lord Chancellor that the fees cannot be unlawful unless it is proved that they have prevented access to justice in specific cases. No-one, however, has given evidence in these proceedings that they were unable to bring a claim because they could not afford the fees. Further, it is argued, the poorest people qualify for full remission. Those who do not so qualify have some income over and above the minimum necessary to meet the essentials of life, and can therefore save the amount needed to pay the fees if they choose to do so. In exceptional cases, the Lord Chancellor can exercise his discretionary power to remit the fees. Access to justice is not prevented where the decision on whether to make a claim is the result of making a choice between paying the fee and spending one’s income in some other way.

91. In order for the fees to be lawful, they have to be set at a level that everyone can afford, taking into account the availability of full or partial remission. The evidence now before the court, considered realistically and as a whole, leads to the conclusion that that requirement is not met. In the first place, as the Review Report concludes, “it is clear that there has been a sharp, substantial and sustained fall in the volume of case receipts as a result of the introduction of fees”. While the Review Report fairly states that there is no conclusive evidence that the fees have prevented people from bringing claims, the court does not require conclusive evidence: as the Hillingdon case indicates, it is sufficient in this context if a real risk is demonstrated. The fall in the number of claims has in any event been so sharp, so substantial, and so sustained as to warrant the conclusion that a significant number of people who would otherwise have brought claims have found the fees to be unaffordable.

92. In that regard, it is necessary to bear in mind that the use which people make of ETs is governed more by circumstances than by choice. Every individual who is in employment may require to have resort to an ET, usually unexpectedly: for example, if they find themselves unfairly dismissed or the victim of discrimination. Persons whose employment rights have been breached, or who believe them to have been breached, are often under a practical compulsion to apply to an ET for redress. Conciliation can be a valuable alternative in some circumstances, but as explained earlier the ability to obtain a fair settlement is itself dependent on the possibility that, in the absence of such a settlement, a claim will be presented to the ET. It is the practical compulsion which many potential claimants are under, which makes the fall in the number of claims indicative of something more than a change in consumer behaviour.

93. Secondly, as explained earlier, the Review Report itself estimated that around 10% of the claimants, whose claims were notified to Acas but did not result either in a settlement or in a claim before an ET, said that they did not bring proceedings because they could not afford the fees. The Review Report suggests that they may merely have meant that affording the fees meant reducing “other” areas of non-essential spending in order to save the money. It is not obvious why the explanation given by the claimants should not be accepted. But even if the suggestion in the Review Report is correct, it is not a complete answer. The question whether fees effectively prevent access to justice must be decided according to the likely impact of the fees on behaviour in the real world. Fees must therefore be affordable not in a theoretical sense, but in the sense that they can reasonably be afforded. Where households on low to middle incomes can only afford fees by sacrificing the ordinary and reasonable expenditure required to maintain what would generally be regarded as an acceptable standard of living, the fees cannot be regarded as affordable.

94. Thirdly, that conclusion is strengthened by consideration of the hypothetical examples, which provide some indication of the impact of the fees on claimants in low to middle income households. It is common ground that payment of the fees would result in the hypothetical households having less income than is estimated by the Joseph Rowntree Foundation as being necessary to meet acceptable living standards. The Lord Chancellor argues that, if the households sacrifice all spending on clothing, personal goods and services, social and cultural participation, and alcohol, the necessary savings can be made to enable the fees to be paid. As was explained earlier, the time required to make the necessary savings varies, in the examples, between about one month and three and a half months. Leaving aside the other difficulties with the Lord Chancellor’s argument discussed earlier, the fundamental problem is the assumption that the right of access to courts and tribunals can lawfully be made subject to impositions which low to middle income households can only meet by sacrificing ordinary and reasonable expenditure for substantial periods of time.

95. The court cannot be deflected from that conclusion by the existence of the Lord Chancellor’s discretionary power of remission. The statutory scheme of remission is of very restricted scope, as explained earlier. The effects of the Fees Order have occurred notwithstanding the existence of that scheme. The discretionary power of remission may be capable of greater use than has been the case in the past, but it can only be exercised “where the Lord Chancellor is satisfied that there are exceptional circumstances which justify doing so.” The problems which have been identified in these proceedings are not confined to exceptional circumstances: they are systemic.

96. Furthermore, it is not only where fees are unaffordable that they can prevent access to justice. They can equally have that effect if they render it futile or irrational to bring a claim. As explained earlier, many claims which can be brought in ETs do not seek any financial award: for example, claims to enforce the right to regular work breaks or to written particulars of employment. Many claims which do seek a financial award are for modest amounts, as explained earlier. If, for example, fees of £390 have to be paid in order to pursue a claim worth £500 (such as the median award in claims for unlawful deductions from wages), no sensible person will pursue the claim unless he can be virtually certain that he will succeed in his claim, that the award will include the reimbursement of the fees, and that the award will be satisfied in full. If those conditions are not met, the fee will in reality prevent the claim from being pursued, whether or not it can be afforded. In practice, however, success can rarely be guaranteed. In addition, on the evidence before the court, only half of the claimants who succeed in obtaining an award receive payment in full, and around a third of them receive nothing at all.

97. As explained earlier, the statistical evidence relating to the impact of the Fees Order on the value of awards, the evidence of the Council of Employment Judges and the Presidents of the ETs, the evidence collected by the Department of Business, Innovation and Skills, and the survey evidence collected by Acas, establishes that in practice the Fees Order has had a particularly deterrent effect on the bringing of claims of low monetary value. That is as one would expect, given the futility of bringing many such claims, in view of the level of the fees and the prospects of recovering them.

98. For all these reasons, the Fees Order effectively prevents access to justice, and is therefore unlawful. Given that conclusion, the other issues arising in the appeal can be dealt with very briefly.

Can the Fees Order be justified as a necessary intrusion on the right of access to justice?

99. The primary aim of the Fees Order was to transfer some of the cost burden of the ET and EAT system from general taxpayers to users of the system. That objective has been achieved to some extent, but it does not follow that fees which intruded to a lesser extent upon the right of access to justice would have been any less effective. In that regard, it is necessary to point out an error in the Review Report, repeated in the Lord Chancellor’s submissions. The Review Report states that the Ministry of Justice have considered whether it would be more proportionate to charge lower fees, but that “the result of reducing fees would reduce the income generated by fees, and thereby reduce the proportion of cost transferred to users from the taxpayer” (para 307). That statement is unsupported by any evidence, and appears to be regarded as axiomatic. Similarly, in his written case, the Lord Chancellor states that, in pursuing the aim of transferring the costs of the tribunals from taxpayers to users, “the higher the fees are, patently the more effective they are in doing so”. This idea is repeated: in recovering the cost from users, it is said, “the higher the fee, the more effective it is”.

100. However, it is elementary economics, and plain common sense, that the revenue derived from the supply of services is not maximised by maximising the price. In order to obtain the maximum revenue, it is necessary to identify the optimal price, which depends on the price elasticity of demand. In the present case, it is clear that the fees were not set at the optimal price: the price elasticity of demand was greatly underestimated. It has not been shown that less onerous fees, or a more generous system of remission, would have been any less effective in meeting the objective of transferring the cost burden to users.

101. Nor, on the evidence before the court, have fees at the level set in the Fees Order been shown to be necessary in order to achieve its secondary aims: namely, to incentivise earlier settlements and to disincentivise the pursuit of weak or vexatious claims. These issues were discussed at paras 57-59 above.

102. There is a further matter, which was not relied on as a separate ground of challenge, but should not be overlooked. That is the failure, in setting the fees, to consider the public benefits flowing from the enforcement of rights which Parliament had conferred, either by direct enactment, or indirectly via the European Communities Act 1972. Fundamentally, it was because of that failure that the system of fees introduced in 2013 was, from the outset, destined to infringe constitutional rights.