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Employment Tribunal Claims to Increase?

A recent ruling by the Supreme Court regarding the legality of Employment Tribunal Fees could result in an increase in frequency and cost of Employment Tribunal claims.

Written by Paul Brown on 2nd August 2017

Employment Tribunal Claims  to Increase?

A recent ruling by the Supreme Court regarding the legality of Employment Tribunal Fees could result in an increase in frequency and cost of Employment Tribunal claims.

Since the introduction of tribunal fees in 2013 requiring employees, or workers, looking to bring an Employment Tribunal claim to pay fees of up to £1,200,  the number of employment tribunal cases has reduced. Employment claims, including claims for unfair dismissal and sexual, racial, gender, or age harassment, or discrimination have still however remained the most common type of management liability insurance claim by far.  

Since 2013 the Unison union has brought a series of challenges to tribunal fees and on 26th July 2017 the Supreme Court found unanimously that the current fee regime is unlawful. The Court found that as the cost of a tribunal claim fee is higher than and disproportionate to that in the Small Claims Court it prevents access to justice. The Court also felt that employment tribunal cases are important for all of society, not just the individuals bringing the cases.

As a result of this ruling:

1.     For now, no fees are payable in bringing a tribunal claim.

2.     There will probably need to be a consultation by the Government to consider whether or not a new fee regime should be brought in and what that would look like.

3.     All fees paid by Claimants between 2013 and July 2017, will be reimbursed by the government.  This figure has been estimated to be in excess of £27,000,000.

4.      Tribunals may need to respond to claims from individuals who didn’t bring a claim because they couldn’t afford the fee.  

We can also expect the average tribunal cost of £20,000 to increase courtesy of the Employment Relations Act 1999 which requires that compensation awarded, by an employment tribunal, is increased in line with inflation.

With effect from 6thApril 2017, amongst other increases, this has the effect of increasing the maximum amount of a week's pay from £479 to £489 and the limit on the compensatory award for unfair dismissal rises from £78,962 to £80,541.

We can therefore expect the frequency and cost of Employment Tribunal claims to spike which can be extremely financially damaging as well as draining management resource and potentially harming your company’s reputation.

Employment Practices Liability Insurance provides valuable cover for legal costs, awards and settlements for any employment claims brought against you including the legal costs of representing any director, officer or employee at an official employment investigation.

Contact Franklands now to discuss Employment Practices Liability Insurance.

See other blogs related to: Insurance , Legal

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