Britain is being economically choked by the tribunals industry, a report warns.

The 'parallel justice system' covering everything from immigration to education, tax and employment now rivals the courts in scale and complexity, says the study by the Centre for Policy Studies think-tank.

It shows the number of new cases has risen from 361,375 a decade ago to 417,539 in 2024-25.

Immigration cases almost doubled in the past five years but the biggest rise has been among applications to the Special Educational Needs and Disability Tribunal (from 7,694 to 23,861).

The report says the surge is down to parents being able to appeal any decision made about their child's support without having to pay a fee or face a threshold test for claims.

Councils and schools contest the cases but lose up to 99 per cent of them, wasting up to £80million a year in legal fees.

In the Employment Tribunal, workers suing bosses no longer have to pay to bring cases after the Supreme Court struck down fees.

Yet employers must spend up to £50,000 in legal fees before any witnesses are called – so most choose to settle out of court because it is cheaper than fighting the case.

The report blames Labour's Human Rights Act, which incorporated the European Convention on Human Rights into British law, for handing lawyers a 'near-inexhaustible toolkit' for challenging any rationalisation of public services.

To reduce the burden created by the current system, it recommends a 'modest' fee of up to £200 to bring a case in the main tribunals, while minor cases should be settled without in-person hearings.

Report author Alan Hibben said: 'The United Kingdom is struggling with a very large productivity gap as well as the effects of a huge regulatory overburden.

'A poorly performing tribunal system adds to the inefficiencies of the economic environment and pulls scarce resources and human capital from more productive use.'

The report also highlights 'equal pay' cases that have cost billions.

In a 'remarkable' 2024 Employment Tribunal case, judges awarded £30million to thousands of Next staff for gender discrimination even though they could not demonstrate ways in which any individual had been treated badly.

The firm's 'crime' had been to pay higher wages to warehouse staff, fewer than half of whom were female, than those on the shop floor.

The report says similar claims are causing 'extraordinary' economic damage, with both Birmingham City Council and Glasgow City Council hit by costs of £1.3billion.

It blames a Supreme Court ruling in 2012 which extended the limit for claims from six months to six years, with law firms running campaigns to recruit workers.

'What was once a complex legal process has turned into an industrialised claims factory,' the report says.