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 can not 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 can not 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 July 2013 .