Defend or Settle an employment tribunal claim?
Think about settling right away
It will always be beneficial for respondent to take settlement costs into account early on. This will allow you to consider the overall economics of defending the case before committing to what may prove to be an expensive defence, especially in cases where there are little to no chances of prevailing. Three important aspects are likely to be taken into consideration:
Likelihood of success of the Claim
It should be feasible to determine early on the likelihood of effectively defending an employment tribunal claim based on the documents and facts at hand. It will usually be a good idea to try to settle early on, often even before launching a defensive (if that is feasible), if those possibilities are 50% or fewer. We provide a legal merit of a claim inquiry, during which you will typically get the advice of a skilled legal expert who has thoroughly considered the case's issues and detailed why they think it has a good chance of succeeding.
Obtain a professional evaluation of the possible validity and worth of your case, as well as strategic direction for the measures to take next. Your claim as well as the evidence is going to be looked over by a legal practitioner when examining the legal merits. We will explain the merits of your claim and argument and provides recommendations for the next steps to take such what evidence needs to be obtained or if you have missed something out. This will be a 1-hour phone conversation to go over your claims and discuss the next stages and strategy. A rundown of the potential outcomes your case has before the Tribunal, to assist you in determining whether to continue. Book your assessment.
Employers should constantly plan for the unexpected and keep in mind that the result of an employment tribunal action is never certain. For instance, even if the paperwork supports your position, you can lose the case if, during the trial, one of your witnesses unexpectedly divulges material that was withheld from you. This would severely impair your defence. A useful method of determining the strength of a case is to consider the potential witnesses early on, we offer a document review. This has two functions. The first step is to determine whether internal papers are relevant to a particular case, from which a good understanding of success can be identified. The second is for preparing a list of documents for litigation exchange. In order words start preparing the documents you rely on to defend your case and while doing so prepare all the evidence you need. Find out more about this document assessment.
2. Cost of Cure
It is important to consider the potential compensation that the victorious party may get. This might influence not only whether you decide to make a settlement offer or not, but also how much could be a fair settlement price. For instance, the maximum compensation award in an unjust dismissal action is the lesser of the statutory limit (£105,707- or 52-weeks gross salary- whichever is the lower. The amount of compensation that may be awarded in a discrimination action is unlimited.
As part of their obligation to lessen their losses, claimants must consider whether they have obtained other employment, when they did so, and what they are now making. This may significantly lower any compensation granted if they have obtained employment and are receiving a comparable or greater pay and benefits.
It is important to consider the Employment Tribunal's ability to reduce compensation while contemplating a settlement or engaging in discussions. This might be the situation, for instance, in a claim of unfair dismissal if the employer possesses convincing proof that the worker committed serious misbehaviour but did not follow a just procedure before firing them. Even if it is determined that this was an unfair method, the Employment Tribunal may nevertheless decide whether the employee would have been fired regardless of if a fair process had been followed. If so, they might take up to 100% of the compensation amount away. This kind of deduction is called a "Polkey" deduction.
3. Wider repercussions
The settlement may have unintended consequences for your company, such as harming employee relations or setting expectations among surviving employees if they learn about the payment. It may also have an indirect influence on your company's internal reputation.
Even while employment tribunals are often open to the public, including the media, the chance of a hearing garnering media attention is probably slim unless the case would make an excellent news story or includes a topic of special public interest, which is typically not the case. What kind of headlines would the case generate even if it made the press, and how may this impact your business?
In terms of potential precedent, any settlement reached via ACAS will often be subject to what are known as COT3 provisions. This may contain confidentiality restrictions, which state that the worker is not permitted to reveal the conditions and/or value of any settlement. If they do, they could have to give you back all or part of the agreed-upon compensation. Even so, it could still come to light that an employer has settled a complaint. If you start getting a lot of claims, all of which you settle, this normally sets a "precedent" that might pose problems for the employer—that is, if they start to make claims and then pay you off.
When it comes to settlement, ongoing employee relations may also be considered. It's possible that those who remain after an employee leaves or is dismissed now must take up the task until a replacement can be located. In these situations, your employees can see any settlement as compensation for the former employee, which might negatively affect the people who are still employed by you.
Additionally, keep in mind that the major players involved may experience stress and time commitment if you defend a lawsuit. You will be responsible for paying the defence’s legal fees as well as the time spent by all parties engaged in creating paperwork and appearing in court to provide testimony.
Conclusion
In summary, employers have the option to decide up front that they would fight a case to the death and that they want to convey to staff members that going to tribunal is not worth the expense. But before making such a firm decision, consider all the considerations. Only then, if you are still certain that defending the claim is the appropriate course of action, should you proceed. Additionally, keep in mind that the likelihood of victory might alter at various stages of the claim, such as when witness testimonies are exchanged. Therefore, it is equally crucial to continuously assess the likelihood of victory and potential settlement throughout the tribunal claim process.
We can help
We can help you by offering prompt counsel about the viability of a claim and/or possible settlement. Please do not hesitate to contact us for more guidance if you have been the subject of a claim and are unclear on what to do next.
