Return of the litigant in person?
Three of our largest payouts last year (all over 50k) were for costs relating to meritless litigants who pushed insurers to 10 or 15 day hearings at enormous cost.
In one pyric victory, a self-represented claimant won £1,700 on a minor Head of Claim after rejecting a commercial offer from insurers of £20,000 to 'go away' while driving repesentaton costs up to a total £60,000. In another example, an employee with less than a year's service was dismissed for gross misconduct (witnessed by the HR professional) and with the help of a partner with an international law degree forced the claim to the Court of Appeal, losing at every instance with costs to the employer, that we insured, of £65,000.
These could have been catastrophic losses in a struggling economy for any employer with a weak balance sheet, no professional HR support and inadequate insurance.
The year ET phoned in a record number of times?
If the trend established before fixed ET fees were introduced recommences then, in 2018 UK employers could see a new claim on average every FIVE minutes of the working day.
We actually don't believe it will be anything like as bad as that because the 2 year qualifying rule is still in place but, with no fees to restrain would-be litigants and a growing awareness that claims cost nothing to make and are a lot of time and money for bosses, it's very bad news for employers.
Already ACAS offices are swamped with many reporting a five to ten fold increase in conciliation requests. As a consequence Tribunal listing dates have already crept out to February 2019 in a number of jurisdictions. So far the large majority of pre-conciliations we have seen are for contractual payments, but there is a trend developing for a more regular assertion of discrimination and bullying as a negotiation tatic, often supported by opportunistic no-win no-fee lawyers who are 'diversifying' away from personal injury matters with on-line offerings of support.
Any employer who still thinks ET claims have gone away is in for a sharp suprise, and there is no substitute for professional advice and specialised insurance that can be trusted to perform to order.
No Tribunal Fees - What Next?
Following on from our article in September, "Fees were illegal - what now?" Straight Solutions has taken a look at what will happen next.
It's now been over two months since The Supreme Court ruled that employment tribunal fees were unlawful and we have seen informal reports from Employment Judges stating that they have seen a 2 to 7 - fold increase (depending on region) in claims over the months following the court ruling but many of these newly reported claims relate to wages claims, which should not progress further.
What will happen next?
Fees were illegal - what now?
The general feeling is that the removal of ET fees will be good for lawyers and conversely some insurers too. On the one hand, without fees we expect more claims but given that the reduced perception of risk to employers has been a big barrier to selling legal services, their absence should stimulate demand for professional advice.
BTE and defendant insurers will see increased costs for fighting an increased number of claims, but they should see more sales and in turn good profitability if they get their pricing right.
After 2013 the combination of introduction of ET fees, unfair dismissal being increased to 2 years service and the introduction of early conciliation at ACAS, claims dropped by 79%. In the same period our average costs for claims has escalated 4 fold due to the involvement of funders and their reluctance to settle without a profitable return, longer hearings due to Judges with time on their hands and cost escalating tactics.
With the removal of ET fees a few weeks ago there are clearly concerns that claim numbers will rocket. In light of the expected 40-50% increase in claims and a spike in vexatious ones now is the time to alert employers of the value of professional legal advice and effective insurance (from us of course).
That's a new claim every five minutes!
Protect the retainer, not the client?
Recognising that insurance premiums are driven mostly by previous claims experience and the cost of future representation, our most successful business partners approach the purchase of employment insurance as if they were buying cover to protect their service rather than the client.