Keenan and Riches’BUSINESS LAW

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Chapter 3Resolving disputes

In May 2000 the Lord Chancellor commissioned
Sir Andrew Leggatt, a former Court of Appeal judge, to
undertake a review of the tribunal system. The report,
which was published in 2001, noted that there are 70 dif-
ferent administrative tribunals in England and Wales,
dealing with nearly one million cases a year. Tribunals
deal with a wide range of subjects, such as social secur-
ity, employment, immigration and mental health. The
attraction of tribunals is that they operate cheaply and
quickly with a minimum of formalities. Although the
chairman is usually legally qualified, other members are
drawn from non-legal experts in the subject under con-
sideration. Legal representation is discouraged as gener-
ally legal aid is not available and costs are not awarded.
The work of tribunals is subject to scrutiny by the
courts. An appeal from the decision of a tribunal can
normally be made to the ordinary courts on a point of
law but not on the facts. The Divisional Court of the
Queen’s Bench Division ensures that a tribunal acts
fairly, according to its powers.
One of the best-known tribunals is the employment
tribunal (formerly known as the industrial tribunal).
When it was established in 1964, it had a very limited
jurisdiction, but now it is one of the busiest tribunals. It
sits locally to hear complaints by employees about con-
tracts of employment; unfair dismissal; redundancy; sex,
race, disability and age discrimination in employment;
and equal pay. Since 1994 employment tribunals have
also been able to hear claims for breach of a contract of
employment where the amount claimed does not exceed
£25,000. The breach must arise from or be outstanding
at the termination of the employment. Previously these
claims could only be heard in the ordinary courts.
Personal injury claims and claims relating to living
accommodation, intellectual property and restraint of
trade are not included in the transfer of jurisdiction and
will continue to be heard in the civil courts. The tribunal
normally consists of a legally qualified chairman aided
by two lay members, one representing employers and
the other representing employees. However, changes
introduced in 1993 enabled employment tribunal chair-
men to sit alone to hear certain cases. The proceedings
are relatively informal, especially as the strict rules of
evidence are relaxed. Employees may receive ‘legal help’
from the Community Legal Service Fund to help them
prepare for the hearing by, e.g., drafting documents.
Financial help to cover the cost of representation at the
tribunal hearing is not available, although applicants can
be represented by a trade union official or a friend.


Normally each side pays its own costs. The tribunal’s
powers include being able to make awards of compensa-
tion totalling thousands of pounds. An appeal lies to the
Employment Appeal Tribunal and from there to the
Court of Appeal. The Employment Rights (Dispute
Resolution) Act 1998 introduced changes to the law
relating to the resolution of individual employment
rights disputes, which are discussed in more detail in
Chapter 16.

Reform of the tribunal system

As noted earlier, in August 2001, the government pub-
lished Sir Andrew Leggatt’s report on his review of the
tribunal system, Tribunals for Users: One System, One
Service. The report noted that, in the 44 years since tri-
bunals were last reviewed, they had grown considerably
in number and complexity. However, of the 70 tribunals
identified, only 20 hear more than 500 cases a year. A
consequence of having such a large number of dispar-
ate tribunals, many of which hear only a small number
of cases, is that it has not been possible to achieve
economies of scale. Resources have been wasted and
training and IT have been under-resourced. Their pro-
cedures are often old-fashioned and are not accessible to
users, who find the experience very daunting. Tribunals
are often established and sponsored by a government
department and, as a result, ‘The tribunal neither
appears to be independent, nor is independent in fact’.
Sir Andrew stated that the objective of the report was to
recommend a system that is independent, coherent,
professional, cost-effective and user-friendly. The rec-
ommendations include:

■To establish a common, unified administrative ser-
vice, known as the Tribunal Service, within the Lord
Chancellor’s Department.
■To establish a single Tribunal System, operating in
divisions according to subject matter, e.g. education,
financial, health and social services, immigration, land
and valuation, social security and pensions, transport,
regulatory and employment. Each division would
have an appellate tribunal headed up by a President.
■The Tribunal System should be headed by a Senior
President, who should be a High Court judge.
■There should be a right of appeal, but only by per-
mission, on a point of law on the generic ground
that the decision of the tribunal was unlawful. The
appeal would lie from the first tier tribunal to the

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