Tribunal claims have increased by 90% – what does that mean for you?
The increase in claims since the removal of tribunal fees in July 2017 have been dramatic. Between October and December 2017 statistics show they increased by 90%.
Recent cases in the Employment Appeal Tribunal (EAT) include claims in which litigants in person have had their claims struck out for failing to comply with Court Orders and having to pay the Employers legal costs. The cases also include a holiday pay claim for a part time worker because the Employer failed to apply the calculation cited at s244 of the Employment Rights Act 1996.
There have also been successful claims that have no upper limit to the amount a Tribunal can award in compensation. These include a successful claim for detriment and constructive unfair dismissal as a result of raising concerns that occupational health requirements were not being complied with for a prolonged period in the NHS. “Whistle blowing” claims do not require a minimum period of service, so the employee does not need to have 2 years employment. Claims under the Equality Act 2010, which also have no upper limit and no minimum service, have also reached the Employment Appeal Tribunal.
Having the right to submit a claim free of charge may mean that the employer has to defend claims that have no prospects of success. An order for the employee to pay the costs incurred may be of small comfort, if the employee does not have the means to pay.
If the employee has instructed a solicitor then it should be more difficult for the employer as the likelihood is that the claim will not only need to be responded to but Court Orders will be complied with. Furthermore the employee may well be represented in court both by a barrister and a solicitor.
The cost of submitting a claim and of defending it is high both in legal fees and in time and stress. A complex claim may well take 6 months or longer to be concluded. In addition there is now likely to be further delay due to a 66% increase in the back log of claims as the Tribunals struggle to cope with the increased number of claims. The cost may be between £30,000 and £50,000.00 or more in legal fees. The highest award for compensation in the 2016/2017 period was £1,744,575.56.
In this situation Legal Expenses Insurance to cover all your legal costs and awards can be invaluable for both employees and employers.
Whether you have Legal Expenses Insurance or not negotiated settlements are usually desirable if an agreement can be reached on quantum, and taking into account the litigation risk, which is high for both parties. The importance of “principle” is often a factor in deciding whether to settle the claim or take the litigation risk. An employee who believes their reputation has been damaged, and that they will suffer significant loss of earnings because of the employer’s conduct, may want their day in court. Similarly an employer who believes the employee has been treated fairly and is pursuing an invalid claim may not want to settle in any circumstances.
If the rise in tribunal claims is causing you concern, and you would like to consider taking out legal expenses insurance to cover these potential risks, then please do contact Nick Richardson or Darryn Harris at rhw solicitors to discuss.