Is taking a case to tribunal really ‘more trouble than it is worth’?
Posted on 30th November 2022 at 11:54
While most employment law disputes are decided at tribunal rather than court (there are a few exceptions), the general view seems to be that the official legal process is not perceived as the best solution. Just 17% thought justice was highly accessible, and 87% felt that those with less money generally get a worse outcome. But what are the alternatives, and are they any less trouble?
Taking no action
8% of small businesses surveyed took no action at all. Some problems do resolve themselves. For example, the employee may drop their claim because they realise it is weak, or they want to move on with a fresh start.
However, it is rarely sensible to ignore an employment law issue, as this can make matters far worse. If the employee formally submits a claim to the tribunal and you fail to respond within the specified time (usually 28 days) the tribunal may make a default judgement in the claimant’s favour. Having been found at fault, you would then be liable for any compensation or damages granted.
Settling the claim
While you can never completely rule out the possibility of your dispute ending up in tribunal, this is only the case for a minority of disputes. ACAS’ annual report for 2020-2021 showed that while 264,000 people accessed individual dispute resolution, only 7% of those cases made it to the tribunal. 30% of small businesses surveyed reached agreement with the other party. It is easy to see why settlements are popular. Settling saves you in legal costs, resolves the issue more quickly, gives you more control over the outcome, and can avoid the case being published online and damaging your reputation.
You may be able to reach an agreement independently, but you are likely to get better results with the support of a solicitor. A solicitor can help you to understand your rights and obligations, the strengths and weaknesses of your claim or defence and the potential outcomes if the case is not settled. This will put you in a better position to negotiate and could help you reach a more beneficial agreement. An experienced solicitor will also be able to liaise with the other party on your behalf. This can achieve better results as solicitors understand the tactics of negotiating, and approach discussions objectively.
This isn’t to say that you should settle at all costs. A settlement requires both parties to be willing to negotiate and compromise. The claimant may not be willing to enter meaningful discussions, perhaps if they have unrealistic expectations. There may also be times when you are not willing to negotiate, for example, if reputational damage has already been done and a tribunal would help clear your company’s name. Where a settlement is not possible, or the only settlement on offer is unreasonable, a tribunal hearing may be the more sensible option.
Resolving the issue yourself
It may be tempting to resort to searching the internet for employment law advice in the hope of taking the case into your own hands and keeping costs down. In fact, 44% of small businesses surveyed sought to resolve issues entirely on their own.
30% did manage to reach an agreement with the other party but, as discussed above, having legal advice can help you to reach a more beneficial settlement. Having help to understand the law and present your argument well in negotiations could encourage the other party to compromise, and knowing the strengths of your claim will give you a stronger basis to push for more beneficial terms.
Unqualified and unregulated advice can make your situation even more stressful and result in the wrong outcome. Employment law is complicated and without specialist guidance, it’s easy to misunderstand your legal rights. Every case is unique, so generic employment law information on the internet may not apply easily to your case.
Failure to properly understand and apply employment law could cost you directly in the value of a tribunal claim, but also indirectly in loss of productivity and reduced morale. A successful claim against you can, in some cases, threaten your entire business.
Some failings may even cause the tribunal to increase the compensation you must pay. For example, the compensatory award may be increased by up to 25% if you failed to follow ACAS codes of practice, or you may be ordered to pay the claimant’s costs if you act unreasonably or clearly had no defence.
A professional legal advisor can help you to understand how the law applies to your specific case. You can have peace of mind knowing the advice is accurate, up to date, and regulated by the Solicitors Regulation Authority.
Get better support
Not everyone will have the same experience, depending on their choice of representative. Those who felt that the legal system was ‘more trouble than it is worth’ may have been influenced by poor service or value.
Of the businesses not satisfied with the service they received, the top reasons given were that it took too long (25%), they were not kept up to date about progress (22%) and general poor quality of service (20%). But some firms are very good at offering efficient advice, good communication, and quality service (we would say that, but you can read our reviews to see what our clients say).
Only half of small businesses said they shopped around to compare providers, but time spent finding the right firm for you is time well spent . You will be spending a lot of time talking to your solicitor and investing a lot in their support. Having a good solicitor that you trust and feel comfortable working with makes a huge difference to your experience of the legal system.
Further, only 4% of small businesses used Legal Expenses Insurance (LEI) to fund legal costs, with many instead dipping into personal savings to pay for advice. The legal process is a big commitment however you pay, but seeing personal savings deplete is likely to add to the stress and expectations. As well as dealing with the dispute itself, in this situation you will be worrying about the financial impact on your business and personal future. Using insurance can take away some of this extra stress, allowing you to focus your efforts on the dispute and your business.
Alternatively, you should speak to your solicitor about budget from the outset. Many solicitors will work with you to manage your budget, with your solicitor offering advice and doing only the most technical work, leaving you to do the tasks you can. By discussing budget from the start, your solicitor can help you to allocate your spend where it will have the most impact.
Try to avoid the dispute altogether
If you are reading about legal claims it may be too late to avoid this dispute, but you may want to make changes to avoid the situation again. Read our guides to avoiding discrimination in the workplace, making redundancies, and dismissing employees legally. You may also want to consider our staff handbooks.
There is no denying that legal disputes can be stressful, time consuming and expensive. But once a dispute has arisen, seeking legal advice is the wisest option. A solicitor can advise you about your options and help you to decide which route is best for you. Ignoring the problem or relying on generic advice could cause you far more trouble in the long run.
If you are facing a legal dispute, get in touch for advice now.
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