Some of you may remember a blog some four years ago about the effect of mandatory Tribunal fees for employees bring a claim. The imposition of an ‘issue fee’ of up to £250 and a hearing fee of up to £950, both payable by the claimant meant that it was no longer possible for disgruntled employees to cause the maximum amount of upheaval, effort and cost for their employer or former employer by bringing a Tribunal claim, without incurring at least some financial outlay themselves.
True, if the employee’s claim were successful, the employer would be ordered to refund these costs, but the expectation was that the costs requirement would weed out the more frivolous claims. The employer is of course has to spend time and effort (as well as possible legal costs) in contesting any claim, or risk the Tribunal finding in favour of the employee.
Sure enough, the level of claims brought was reduced dramatically – so much so (some 70%) that it has now been held that the imposition of fees is unlawful, on the basis that it restricts the access of the individual to legal redress. I’m not going to go into the legal pros and cons of this as I’m sure that we will all be reading plenty of legal and other opinions in the next few months.
As far as I know, there are no plans to scrap the requirement for claimants to use the ACAS Early Conciliation period, the effect of which is to ‘pause’ the proceedings for a month (with agreed extension of 14 days). Although the effectiveness of this procedure is variable, it does provide a breathing space during which time either party may ‘think again’ and decide to avoid the costs and possible trauma of a hearing.
Some points to note:
- The claimant is obliged to enter into the ACAS Early Conciliation procedure, and settlement is likely to be very much cheaper than taking the matter to Tribunal.
- There is no downside in not conciliating. If you want to say to ACAS that you’re not prepared to agree to what the claimant wants, then this will not damage your case at all. The ACAS procedure is confidential and cannot be disclosed to the Tribunal as part of the proceedings
- Many people have legal expenses cover (probably as part of their house insurance). Many legal firms will take on a case on a ‘no win, no fee’ basis, if they think they can win. If you can, find out whether either of these apply, because if the claimant is not going to have to pay, they are much more likely to proceed to hearing. It is possible that the claimant may disclose this information as part of their negotiating strategy.
- If you lose at Tribunal, it is likely that damages will be awarded – but at the moment the Tribunal has no power to award costs, so you won’t be paying the claimant’s solicitors’ legal fees. However, there is a view that this could change.
Now, I’m not a solicitor, and although every effort has been made to verify the information above, I do urge you to take legal advice before acting – better still, review your policies and procedures now to give yourself the best chance of avoiding Tribunal Claims. The reversal of the requirement for the claimant to pay Tribunal fees means that we are likely to see a resurgence of ‘frivolous’ claims, but well-drafted and implemented policies may still deter claimants unless of course, they feel they have a genuine point. Prevention really is better than cure!
Do share with me any recent experiences.