> Having worked in employment law I can vouch that there are many spurious claims brought by employees which are very costly for employers.

Did I read somewhere – it costs an average of £7,000 on legal fees to defend a claim – that means that an employee knows that so long as they keep a spurious claim below £7,000, an employed is likely, purely out of self-interest, to pay up – as it’s cheaper!

> But there are ways to deal with these claims without preventing genuine claimants from accessing justice.

That’s a good aim.

> Employment judges could be instructed to use their existing power to throw out weak cases before they reach tribunal.

That may be a nice ideal, but hard to achieve in practise.
I’ve been there; until the case is heard properly, the court is not allowed to look at any evidence – the so called Pre Hearing Reviews are by definition not the real thing – so only throw things out on technicalities, not on anything in the evidence of that case.

The Employment Tribunals often have long backlogs. Whether there are incentives in the system to try to motivate them to speed things up I don’t know; but is not apparently working.

It kind of feels (like the law often does…) that it is there to serve the lawyers and professionals, not the claimant or respondent!

> The payment into court system could be used with more vigour (this is where judges order claimants with weak cases to make a payment into court, refundable only if they win).

Again, because there is no real mechanism in advance of the actual hearing for the court to know a case is ‘weak’ – this recourse is meaningless.
Have you any stats on how often it is used?

> Or claimants could be required to pay a fee in proportion to their income.

That’s a pretty good idea. Except… to win the biggest £ in a tribunal, a Claimant has to show they are worse off now financially – so are often not in a job at all, or are in lower paid jobs: – so which income would you use for the calculation? Their former one or their current ?

Hi Just Visiting,

Tribunals can strike out cases early if they have ‘no reasonable chance of success’. At the moment this can only be done at a pre-hearing review but it would be better if judges could strike out cases at any stage in the tribunal procedure.

You can often tell that a case has no reasonable chance of success before hearing any evidence, for example if the claimant has misunderstood the law or has given examples of unfair treatment that no reasonable person would deem to be unfair.

I don’t have any stats to hand on payment into court but the general consensus amongst practitioners is that it is underused. The Government could instruct tribunals to use this power more, but I agree that this alone is an unsatisfactory solution.

It would be good to consider ways in which judges could be incentivised to order payment into court for weak claims.

I would base a fee on the claimant’s current income because this in general will be fairest. For those who don’t have a job there could be a very low fee.

Thanks for your comments.

Well this is the point of it, isn’t it?

Given the economy is teetering on going back into recession, it’s only fair that the government prioritise removing workers right rather than regulating the finance industry, particularly the rights of vulnerable workers, because then (insert mystery step) will happen and that will lead to economic recovery.

Another good argument produced by the Tories and the Lib Dems for being a trade union member. Thanks, Bros Osborne and Cable! Keep helping us recruit!

Just Visiting raises an interesting point regarding income assessment. If you base the charge on current income, someone who has recently lost a well-paid job but expects to get another one soon effectively gets a free ride that they don’t need – and hence has no great disincentive for bringing a spurious claim to court. If you base it on previous income, people who don’t expect to get a new job soon get shafted – especially as they’ll probably be burning through their savings to buy essentials.

Annie

> You can often tell that a case has no reasonable chance of success before hearing any evidence, for example if the claimant has misunderstood the law or has given examples of unfair treatment that no reasonable person would deem to be unfair.

Fair enough.

But that misses my point – that a cynical claimant can say something that is easily proven as true or untrue (eg ‘they paid the men more than me a woman’) but the Pre Hearing Review may not look at the evidence – so the case WILL go to the tribunal.
And thus the employer pays on average £7,000 to their lawyers – at no cost to the claimant.

It seems asymetric – and thus open to abuse to cynical claimants who think it’s worth ‘trying it on’: as there are no costs to them, and as above it is cheaper for a company to pay them off, than to pay lawyers to win the case.

Anyway – I’d like to hear some stats from you – on how often the things you mention do actually happen.

Interesting how Cameron is busy retoxifying the Tory image, given that he took so much trouble to detoxify it before the election.

How will people who are not being paid, a situation I’ve been in twice, be able to come up with the money? And I’m talking as an employee here, not a contractor!

In one case I MIGHT have been able to do it, in the other I’d have ended up not only in a city I’d moved to without other nearby prospects, but two months wages down and basically up shit creek without a paddle!

How, precisely, is that defensible?

@ 6 Just Visiting

“they paid the men more than me a woman”

Nit-picking here, but that’s probably not a good example of an easily-proved claim. If a woman claims she was underpaid due to her gender, you can’t easily prove or disprove that just by seeing if she got the same pay as men on average, or even the same pay as a man in the same role (as this may be based on experience, time spent at the firm or productivity).

“It seems asymetric – and thus open to abuse to cynical claimants who think it’s worth ‘trying it on’: as there are no costs to them, and as above it is cheaper for a company to pay them off, than to pay lawyers to win the case.”

What if courts imposed costs on claimants whose case failed – but instead of an upfront charge it was means-assessed at the point of collection? E.G. while the failed claimant remains unemployed they pay a token £5 a month or whatever, but once employed they pay a lot more, with the payments ending when a certain pre-set charge has been reached? Kinda like an interest-free student loan?

Just Visiting

I agree that the current system is unduly weighted towards employees. But the way to correct that isn’t to prevent genuine claimants from taking their employers to tribunal.

A combination of all the measures I mention should deter many opportunistic claimants. The tribunals should also be more willing to order such claimants to pay their employers’ legal costs.

@9 – If you’re unemployed, £5 is likely a huge chunk of your food budget.

@ 11 Leon

“If you’re unemployed, £5 is likely a huge chunk of your food budget.”

Fair point. Ok, say £0 per month until you hit a certain income threshold. The main point is that the charge still exists (thus ensuring a disincentive for bringing frivolous suits on the off-chance that you’ll get away with it), but it’s not actually taken until you can afford it (ensuring that it doesn’t screw over people of limited means).

So a rich person can pay it all in one go, someone with an average income can pay it over a few months, and a skint pensioner will never have to pay it at all.

Tribunals can already impose costs on a claimant who brings a vexatious claim. Costs are rarely awarded, which suggests there are few such claims. However it is already common for employers to use the misleading threat of costs to intimidate genuine claimants.

Average tribunal awards are nothing like as high as is commonly believed. A basic award for unfair dismissal in a low paying job is likely to be under £500. A proposed fee of over £1000 is completely out of proportion to any other court fee charged in the justice system. The court fee for a high court claim is only about £200 I think.

What are employers paying £7k for in defending claims? The tribunal system is designed to be easy for the common man or woman to use wihtout specialist representation. Employers should already know something about employment law, and free organisations such as the CAB will advise employers as well as employees provided there is no conflict of interest in the individual case.

Presumably employees are not paying £7k in legal fees to bring a case, they often represent themselves, so why should it be costing employers that to defend a case unless they are squandering their money?

Let’s take the example of a cleaner on the minimum wage who is sacked because of the colour of his skin…………Each year thousands of women in the UK are forced out of their jobs for being pregnant.

Annie, your examples are worryingly terrible.

From an employers point of view, the loss of a case brought for unfair dismissal is finite and assessable. However the potential downside of a case brought under equalities legislation is, literally, unlimited.

For this reason alone, the chances of an ethnic, female or homosexual employee being the victim of unfair dismissal which could feasibly be related to their colour, sex or sexual orientation are practically nil.

@14 – So over 700 cases won at tribunal in FY2010/2011 don’t exist? Er…

Prejudice isn’t rational.

(Also, a LOT of those cases are settled via ACAS… about 40%, well above the average of 30%)

See; http://www.justice.gov.uk/downloads/publications/statistics-and-data/mojstats/employment-trib-stats-april-march-2010-11.pdf

Tom 13

> Tribunals can already impose costs on a claimant who brings a vexatious claim. Costs are rarely awarded,

I really want to start seeing hard numbers on this thread – else it’s all just arm waving.

> However it is already common for employers to ….

Numbers please!

> A basic award for unfair dismissal in a low paying job is likely to be under £500.

Arghhh. let’s have hard numbers, not waffly ‘likely to be’.

> What are employers paying £7k for in defending claims?

What’s the average solicitor charge per hour – is it £200 or £300 an hour or something like that? If the case is scheduled for several days in court…that’s maybe 10 hours just in court.
Then add in meetings, reading of stuff, letters to the court + all the prep time.

Also, I understand that not all cases booked for a certain date actually have times allocated to them – they over-book.
So if your case is one of those you can end up having to come back another day, unless you’re lucky and enough space becomes free on the day. That’s more lawyers time to pay.

Annie 10

have you no hard-statistics at all to share with us?

The basic unfair dismissal award is calculated at a week’s pay per year of service.
http://www.emplaw.co.uk/lawguide?startpage=data/09700801.htm

The costs statistics are here:
http://www.citizensadvice.org.uk/employmenttribunals-2.pdf
Costs were awarded in 0.72% of cases in 2002. here is power to award costs in any case where a side has acted vexatiously. This does not prove that exactly 0.72% of cases were vexatious, but it is a guide to the number proven to be so.

Obviously there is no figure for how many times employers have threatened costs as this is not public information, but it is a recognised tactic.

My objection to the level employers are paying in expenses was not solicitors rates, but that it is their chocie to use a solicitor. The tribunal system was designed to avoid the need for solicitors. It’s not obvious to me why the employee claimant should be blamed for the employer’s solicitors costs.

Tom iow

> The costs statistics are here:

but quoting figures from 2002….. that is not hard-statistics.

Incidentally, I was told by a lawyer last week, (correct me if I’m wrong) that the Employment Tribunals are not properly computerised.
There is no central database of cases – so there is no way to look up to see if an Employer (or an employee) has a track record at Tribunals!

It’s 2011 for goodness sake – what is wrong with the lawyers/ legal system that they can’t get even the simplest database in place?

@19 – And what about privacy rights?

Sure, you look me up. I’ve brought 2 tribunal cases over wages. So…what, you won’t hire me because I’ve hammered employers who outright didn’t pay me? Right, thanks for that.

13. Tom (iow)

Tribunals can already impose costs on a claimant who brings a vexatious claim. Costs are rarely awarded, which suggests there are few such claims. However it is already common for employers to use the misleading threat of costs to intimidate genuine claimants.

That is an entirely one-sided reading of events. It is just as likely that this Mickey Mouse Tribunal never imposes costs because it is not in their own self interest. It would be bad for business. I wouldn’t like to claim they would go so far as to pay people to bring claims – as EO Tribunals have in Canada – but I would not be all that surprised. You also assume that employers bringing claims of vexatious claims represents anything other than vexatious claims.

Average tribunal awards are nothing like as high as is commonly believed. A basic award for unfair dismissal in a low paying job is likely to be under £500.

So basically this Tribunal serves no useful purpose and ought to be abolished. As all it does is impose massive costs on the tax payer at a tiny benefit to the claimant, not to mention a cost to all of society which outweighs the benefits.

Get rid of them.

What are employers paying £7k for in defending claims?

Think about it – an ex-employee declares their intention to sue you for unfair dismissal. Even apart from the money side, it’s a reputationally bad claim for a company to lose. So you instruct employment lawyers. They will then have to review the evidence to advise you on the strength of your claim (and in some employment cases ‘the evidence’ will amount to an awful lot of paperwork, plus a couple of interviews with management/co-workers). Even if you’re getting junior lawyers to most of the grunt work, you’re still looking at a couple of grand at least to get you to the initial advice.

Then, if you’re told that you have a strong case to argue and you decide to press ahead to Tribunal, there’s a lot more work to do, probably a barrister to instruct, court fees, time spent attending hearings… It all adds up.

I have a friend who is a junior barrister specialising in employment tribunals. She usually works for the employees, but when she’s instructed by employers, her first question is always whether they really want to take it the Tribunal, because the money they stand to save in payouts will be more than made up for the amount they will pay in costs.

£500 is not a tiny amount to someone in the situation I was talking about, it could be a very significant amount. That someone thinks it is says a lot.

I agree that the fact employers feel they need to spend a lot on lawyers is wrong. That was largely my point: ETs were designed to be usable by the common man and woman without lawyers. Something has gone wrong and could be addressed, but I can’t see why punishing the claimant with exhorbitant fees is the answer.

@21 – So, go back to the situation where people bring cases in court? Oh, right, need a situation where you can remove peon’s rights entirely.

The ETS costs well under £100 million a year, and saves several billion, easily.

23. Tom (iow)

£500 is not a tiny amount to someone in the situation I was talking about, it could be a very significant amount. That someone thinks it is says a lot.

No one is saying it is. But spending tens of thousands, at least, of pounds in order to give someone else a few hundred is insane. It serves no useful purpose for the rest of society to be forced to pay for such an inefficient means of money transfer.

I agree that the fact employers feel they need to spend a lot on lawyers is wrong.

They feel the need because they do.

That was largely my point: ETs were designed to be usable by the common man and woman without lawyers. Something has gone wrong and could be addressed, but I can’t see why punishing the claimant with exhorbitant fees is the answer.

If someone brings a claim it is entirely reasonable they, or their lawyers, should pay costs. Or more. Being dragged to Court is a punishment in itself. People should be discouraged from doing so and made to pay when their claims are shown to be false. Deterring pointless claims looks like an excellent answer to me. Cost shifting needs to be automatic. And charged to the lawyers if they have a profit-sharing type of deal of the no-win, no-fee sort.

@25 – Quite, abusing workers is cheaper than paying them. What happens to the workers? Pfft, there’s more where they came from. You’re also of course blocking their civil rights in respect of court actions.

And an ET is not a court. In court, orders of costs against the loser are FAR more common. And would be far higher. It will cost employers massive amounts more. Unless, again, you abolish basic rights.

Which really highlights where you’re going.

Exactly, if you abolish ETs then the forum for enforcing employment rights just becomes the county court or sheriff court and it is not plainly obvious how this would be any different.

If someone is charged with burglary it may cost the court system thousands to bring the case, over a theft of £500 of property, but this is hardly an argument for legalising burglary. Nor is at an argument for charging the householder victim the costs.

27. Tom (iow)

Exactly, if you abolish ETs then the forum for enforcing employment rights just becomes the county court or sheriff court and it is not plainly obvious how this would be any different.

Well they are less likely to be biased against the employers for one thing.

If someone is charged with burglary it may cost the court system thousands to bring the case, over a theft of £500 of property, but this is hardly an argument for legalising burglary. Nor is at an argument for charging the householder victim the costs.

But that is the point – no one is going to be charged with the theft of £500. In fact the police won’t even bother to come and visit you if you have been robbed of so little. Someone would have to be a persistent thief, committing literally hundreds of such crimes before they even had a chance of seeing the inside of a prison cell. But I agree, this is not an argument for the legalisation of burglary. Such people ought to be in jail. However if you are charged with theft, wrongly, I don’t think it is fair you should be stuck with tens of thousands in legal fees. Especially if it is a civil matter. In civil actions it is perfectly reasonable to force the losing side to pay costs. So it should be here.

@28 – So, what evidence do you claim for the ET’s being biased against the defendants?

“But that is the point – no one is going to be charged with the theft of £500″

People are on a routine basis. Your knowledge of police procedure is as accurate as your usual nonsense.

SMFS: you are flitting between solutions. Making people pay costs for vexatious claims is current practice, and supported by just about everybody as far as I know. The proposal under discussion is forcing all claimants, including those with a valid case, to pay £1000 up front which is not necessary in any other area of law. You have also mentioned abolishing ETs which is inconsistent with both proposals.

The fact remains there are no statistics, at all, to back up the assertion that removing or weakening UK employment rights will do anything to create a single job. The bosses clubs bleat on and on, but produce no statistics.

The only statistic that is pertinent here is that the UK is ranked 1st in the EU (and 4th in the entire world) by none other than the World Bank in the index of “ease of doing business” which examines all factors such as labour market regulation.

If we are already such an easy place to do business, I fail to see how making it easier to sack people will somehow bring the recovery to us…