The £1.6billion a year industrial tribunal gravy train has been brought to a shuddering halt. Official figures reveal there has been a fall of almost 80 per cent in the number of cases brought against firms by employees. Business leaders said the Government’s introduction of charges to deter vexatious claims appeared to have ended the damaging ‘no win, no fee’ culture that flourished under Labour. Official figures reveal there has been a fall of almost 80 per cent in the number of cases brought against firms by employees . They criticised Labour’s plans to reverse the reforms if it wins power in May, warning it would make firms less likely to hire. The introduction of fees of between £390 and £1,200 to take an employer to a tribunal, refundable if the case is won, has seen a 78 per cent fall in the number of cases since it was introduced in July 2013, the figures showed. That means the level of claims has returned to levels seen in the early 2000s, before the escalation of no win, no fee cases helped the number to spiral to almost 240,000 a year. Under the last government, the taxpayer met the £86million a year cost of running the tribunals. Firms were spending around £1.6billion a year in defence costs. Employment tribunals were also a major cost to employers, which were spending around £1.6 billion a year in defence costs. The British Chambers of Commerce estimated the average cost to a business of defending itself at tribunal is £8,500, and the average cost of agreeing a settlement is £5,400. Many firms said they settled claims they disputed rather than risk costs spiralling by proceeding to tribunal. Ministers say the new fees system is accompanied by financial support for those who allege they have suffered abuses by unscrupulous employers and cannot afford to pay a fee. Business minister Matthew Hancock told the Daily Mail: ‘Labour’s compensation culture was totally out of hand. It cost millions and warned businesses off creating jobs because of the risk of being held to ransom by a spurious claim. Business minister Matthew Hancock accused Ed Miliband (pictured) of not learning lessons . ‘We have worked hard to reform tribunals so they work better and more fairly, where more people are brought together in conciliation, and genuine abuses can be dealt with properly and only reach court when absolutely necessary. 'Businesses are more confident of creating jobs, and are doing so in record numbers. ‘Yet Ed Miliband has not learned lessons and would reverse this progress. A vote for Labour is a vote against business, against jobs and against prosperity. They cannot be trusted with our economy and would only take us back to the dark days of the past.’ Simon Walker, director general of the Institute of Directors said: ‘Our members would often tell us that the threat of being taken to an employment tribunal was a major concern and a deterrent to taking on new staff, particularly during uncertain times. 'The introduction of fees for employment tribunals has had a direct effect on the confidence and ability of businesses to hire, without undermining the rights of employees with legitimate grievances. It has proven to be a fair, balanced and vital reform.’ Employment tribunals rose by almost 160 per cent under Labour. In 1998-99, the number of employment tribunal claims was 91,913. By 2009-10, this had risen to 236,100. Though most applications did not result in a full hearing or were settled out of court, businesses still had to pay substantial legal costs. The consequences of vexatious claims were most serious for small businesses, which could rarely afford to launch a robust defence. Labour has vowed to abolish the current system to ensure ‘all workers have proper access to justice’. Shadow business secretary Chuka Umunna told the TUC last year: ‘The current employment tribunal system is unfair, unsustainable and has resulted in prohibitive costs locking people out of the justice they are entitled to.’ TUC boss Frances O’Grady said: ‘By charging up-front fees for harassment and abuse claims the Government has made it easier for bad employers to get away with the most appalling behaviour.’ Fees range from £390 for a straightforward claim over unfair dismissal or a failure to pay wages to £1,200 for sex or race discrimination. But poor claimants can have the fees reduced or waived. The new figures show the total number of cases brought has fallen to 35,163 a year. The steepest decline has been in sexual discrimination allegations, down 82 per cent since charges were introduced, to 3,628 over the last year.
Fall of 80 per cent in number of cases brought against firms by employees . Business leaders point to new charges designed to deter vexatious claims . They have criticised Labour plans to reverse reforms if it wins power in May .