Alan Sugar Employment Tribunal.

Crazy_Jamie

Takeaway_Addict wrote: »

I agree its rare but why should an employer be out of pocket as well if things have been done legitimately. There seems to be this feeling that as long as the employee is alright then its tough on the employer if it costs them to defend a claim.

But this argument goes both ways. Currently if an employee has no money or relevant legal expenses policy and wants to instruct a solicitor, they will have to enter into a contingency fee agreement, which means that if they win they will lose a proportion of their damages (usually 35% for the solicitor and 15% for the barrister if it runs to trial). The same argument therefore applies; why should a successful claimant lose a proportion of their damages? The answer is that they do not have to instruct a solicitor, but then that answer applies to Respondents as well. Lest we forget that whilst in practice companies usually will instruct solicitors (or 'employment consultants'), there is no onus on them to do so. The decision to incur those legal costs is their own, as it is a Claimant's decision to enter into a contingency fee agreement.

The default solution is not to allow legal costs to be recovered. In theory it sounds fair and reasonable, but as we have seen in others in practice it causes a lot of issues.

Takeaway_Addict wrote:

It would stop a lot of out of court settlements and would stop alot of the 50/50 cases being brought and take the stress of the system.

It wouldn't stop a lot of out of court settlements, because the litigation risk would still exist as regards paying the Claimant's costs. It's the balance between paying one amount in every case regardless of result, or paying twice as much in some cases when you lose. The reality is that settlement would still happen for 'commercial reasons' because of that risk in case of a loss. Again, that's what we have seen in personal injury cases even when Defendants could recover their costs.

The '50/50' point is a bit of a nothing simply because we don't know how many '50/50' cases are brought already. It's a tenuous definition at best. The issue is stopping the cases that have no merit, not the ones that have a '50/50' chance of winning. Equally, I'm not aware of any issues with 'stress on the system' in a general sense. It's difficult enough to address issues that do exist without worrying about ones that don't.

zzzLazyDaisy

Ironically I believe the 'law of unintended consequences' is going to operate once fees are introduced. True, the initial fee may deter some claimants from making a claim in the first place (not necessarily just those who have a poor case, but also those who simply cannot afford the fee).... but once a case has been started, the vast majority of claims that would have settled in the earlier stages will not now settle until after most of the work has been done... because in order to continue the claimant will have to find almost £1000 to continue, and employers will probably bluff it out and see if the case falls by the wayside at that point. So many more claims will continue through till the last minute, clogging up the system.

But even though, officially, it remains the case that each party pays its own legal costs, I do think that we will start to see those cases that do settle, include some recognition in the settlement agreement for the tribunal fees that the employee has had to pay out to get that far... and I suspect that tribunals will also find a way to reimburse successful claimants for the tribunal fees (not solicitors fees, that's a different issue).

Interesting times....

Crazy_Jamie

zzzLazyDaisy wrote: »

I suspect that tribunals will also find a way to reimburse successful claimants for the tribunal fees (not solicitors fees, that's a different issue).

I have wondered about this myself. It would make more sense if the issue and hearings fees were recoverable, in the same way that they are on the small claims track. It really does seem unfair for Claimants to have to pay those fees and for them then to be lost forever. But as you say, we shall see.

Perfect2

Once the fees are introduced, there will be a fee a remission system in place with it. If the Claimant is not working then they want pay anything; most Claimant's who bring claims have just lost there job so I'm sure what difference it is all going to make.

zzzLazyDaisy

Perfect2 wrote: »

Once the fees are introduced, there will be a fee a remission system in place with it. If the Claimant is not working then they want pay anything; most Claimant's who bring claims have just lost there job so I'm sure what difference it is all going to make.

It is not as simple as that. The eligibility criteria goes on household income. The only people who are automatically exempt are people whose household is in receipt of means tested benefits.

Anyone with a working spouse, or who has other income from savings or rental from a BTL, for example, is unlikely to qualify.

Further, there are a lot of claims which do not necessarily involve people losing their job - unlawful deduction from wages, and unlawful discrimination claims for example. Also, given the length of time it takes cases to get to a hearing (which is likely to get longer, as employers may be less likely to settle until they are certain that the claimant is actually going to pay the hearing fee, and not drop out) there may be many people who make a claim, with an exemption for the initial fee, but by the time the hearing comes round are in work and no longer eligible for the hearing fee. That is a lot of money to find when you have been out of work for months.

teabelly

For non payment of wages could claimants not go straight to a small claims action instead? If you can attach a monetary value then I think it should be a perfectly reasonable thing to do instead of clogging up an ET.

zzzLazyDaisy

teabelly wrote: »

For non payment of wages could claimants not go straight to a small claims action instead? If you can attach a monetary value then I think it should be a perfectly reasonable thing to do instead of clogging up an ET.

Until now it has been beneficial for a claimant to take non-payment of wages to ET, because there were no fees. From the summer a claim for non-payment of wages will be issue fee: £160; hearing fee £230, so it may well be better to go to scc.

One thing to remember though, is that the scc deals with non-payment of wages under breach of contract, and has no jurisdiction to hear claims under the unlawful deduction of wages provisions of the ERA. In many cases this may make no difference, but there are occasions when the money is legitimately owed, but the employer has no contractual right to deduct the money from the wages. Under a breach of contract action, the employer would simply make a counterclaim and one would cancel the other out. In a successful unlawful deductions claim the employer has no right to make a counterclaim, and loses the right to reclaim the money by any other means, so that can be a significant factor in a small number of claims.