Number of Employment Tribunal Claims Drop - Is this forever?

Yesterday the Department of Justice published its statistics showing the number of Employment Tribunal claims made for the period October to December 2013. These were the first set of statistics since Claimants were required pay fees in order to make a claim in the Employment Tribunal. Unsurprisingly the number of claims made dropped by 79% compared to the previous period of July to September leading to employment lawyers wondering about their future career and tribunal judges twiddling their thumbs.

So will the number of claims remain permanently at this level? It is certainly the case that tribunal fees will act as a deterrent for many potential claimants. It is however likely that over time potential claimants will become aware of alternative ways to fund tribunal litigation. This would include using cover that may be provided by their household insurance or having their fees paid by a trade union.  It is also likely that many law firms will carry out claims on behalf of claimants under a conditional fee agreement (“no win, no fee”).

Claims for unpaid notice, holiday pay and unpaid wages are breach of contract claims and can be heard in the County Court. Potentially if the claim is for an amount less than £5000 it may potentially be cheaper to submit a claim to the Small Claims Court rather than the Employment Tribunal. As potential claimants become more aware of this potential course of action then it becomes more likely that claims will be made through this route.

It is clear that the days of claims being submitted as a “punt” in an effort to extract some form of settlement have largely passed; however, while the goalposts may have changed I am of the view that the number of claims made will increase again from their current low; however, not to the levels that existed prior to July 2013.

If it aint broke......

The Queen’s speech has been accused of being light in terms of content by both MP’s and the Press; however, from my point of view it looks as though there will be plenty of interest for employment solicitors in the form of the Enterprise and Regulatory Reform Bill. One of the aims of the bill is to streamline the Employment Tribunal System leading to claims being resolved more quickly than they are at present. One way the government hopes to speed things up is to require all claimants to lodge details of their claim with ACAS and be required to take part in conciliation before the Tribunal proceedings start to kick in.

Early involvement of ACAS means that both parties will potentially start talking to each other about settlement at an early stage leading to an early settlement and costs being saved on both sides. ACAS can also help unrepresented parties get a realistic idea of what they may achieve either as a settlement or at Tribunal. A simple example of this is the ACAS officer explaining to a claimant who is claiming unfair dismissal that they cannot claim monies for injury to feelings as their claim is not one of discrimination.

However, will this actually improve things? ACAS are already involved in tribunal proceedings at a fairly early stage. They are sent a copy of both the tribunal claim and response at the outset of the proceedings and from personal experience I have found that the ACAS officers try to get in touch very early on in proceedings to see if settlement is possible. Arguably, they do a reasonably well with 29% of all Tribunal cases in 2010-2011 being settled through ACAS.

I would suggest that the reality is that ACAS officers are already doing good work in trying to find a resolution to tribunal claims and that parties cannot be forced into an early settlement if they don’t want to. Not everybody can be persuaded to come to an agreement early on due to the emotions involved. It is often the case that attitudes to settlement start to soften later in proceedings often only when the parties are within sight of the Employment Tribunal door and realising that they are actually going to have to give evidence at the hearing.  Sometimes giving the parties time to draw breath is a good way to eventually reach a settlement.

This does not mean that the representatives of the parties should not advise on early settlement. When I advise clients on the prospects of successfully defending a claim I will also discuss the option of early settlement with them and how much they should consider paying to make the matter go away, taking into account the prospects of success and the costs that they may incur. It has however regularly been the case that either my client has not been minded to settle at that stage or the claimant is completely unwilling to consider settlement in any event.

The reality is there is only so much that can be done to encourage early settlement. I think that if ACAS officers and employment lawyers do their jobs properly then claims will be settled in good time. I feel that these proposals are more a case of the government wanting to be seen to be doing something rather than actually coming up with genuinely new way of settling tribunal claims.