The introduction of fees for accessing the employment tribunal service will help defend employers against unjustified claims, it has been claimed.

Adam Marshall, director of policy at the British Chambers of Commerce (BCC), said fees will also boost the confidence of employers and encourage them to take on staff.

Under the current system, firms often settle early to avoid the cost and uncertainty involved in defending themselves against unjustified claims.

Plans to introduce fees for employment tribunals were announced by the Ministry of Justice earlier this week.

Last year, the taxpayer footed the full £84 million bill of running the tribunals, despite the fact that most people will never use the service.

"The average cost for an employer to defend themselves at tribunal is £8,500," Mr Marshall said.

"However three-fifths of tribunal claims are settled due to high costs, with the average settlement at £5,400. According to BCC research, one in five businesses has been threatened with a tribunal in the last three years."

Higher feeds would put off "vexatious" claimants and not deter those with a genuine grievance, he argued.

Two options have been proposed under the plans.

Under the first, a claimant would pay an initial fee of between £150-£250 begin a claim, with an additional fee of between £250-£1,250 if the claim goes to a hearing.

The second recommends a single fee of between £200-£600 – but this would limit the maximum award to £30,000 – with the option of an additional fee of £1,750 for those who seek awards above this amount.

Article courtesy of Aviva PLC. Published 16-12-2011