How lovely to see public policy working well for once:
The number of aggrieved workers bringing sex discrimination claims to employment tribunals has tumbled by 90 per cent in a year since claimants were made to pay a fee.
It appears that the prospect of forking out in advance – and losing the money if their case fails – is deterring many of those who may be tempted to use a tribunal to make their employer pay compensation.
But Labour business spokesman Chuka Umunna has promised to abolish the fees, claiming they are unfair.
Chuka, as ever, is missing the point here. The aim and purpose of the fee is to reduce the number of claims. The fee has been instituted, the number of claims has dropped: public policy is actually working. Would that everything done by government worked so well.
The point is not though to make sure that those cruelly done down by t'evil capitalist plutocrats have no recourse: discrimination law still exists and still operates in the normal manner. Those with a good case will happily pay the small fee, those with a frivolous one won't. The impact of this modest fee therefore tells us something most interesting: the number of former claims that were indeed frivolous, or at least highly unlikely to succeed. But if trying it on costs nothing then why not do so?
There's an interesting parallel here with another thing that the British courts get right. In, say, a patent case, the loser pays everyone's court costs and legal fees. In a similar US case the each side pays its own costs, whatever the outcome of the case (except in truly, truly, egregious cases). It costs perhaps $500 to file a suit alleging patent infringement and up to $2 million just to prepare the defence for a trial. The incentives there are obviously for many trivial suits to be filed in the hopes of getting a bit of cash as a settlement to bugger off and stop bothering everyone.
It's worth noting that the US courts are full of patent troll cases: the UK courts have nary a one.
You know, the first thing everyone should know about economics? Incentives matter.
When proven cases of real sex discrimination bring (righteous) damages of tens to hundreds of thousands of pounds the idea of a small fee as a gatekeeper to deter frivolous cases seems both sensible and not a barrier to those real cases moving into the justice system.