Parasites and Legal Rights

First day back from the festive break and The Times, which must be short of contributors at the moment, rehashes the old argument about employees and their lawyers holding poor innocent small businesses to ransom.

Yesterday’s edition contained an opinion piece from Helen Giles,  HR Director of a business called Broadway which apparently provides services to homeless people.  Her theme?  “Stop legal parasites feeding on small business”(*) This morning the story made it onto the Today programme on Radio 4 and a much more useful discussion, chaired by Evan Davis.

It’s fairly standard stuff which has been heard many times: employers held to ransom by speculative employees and their grasping legal advisers, invariably acting on a “no win no fee” basis.  Ms Giles’ argument is that employees have too many rights and it is impossible for small businesses and charities to address poorly performing employees for fear of facing an unfair dismissal or discrimination claim. She relates how, for instance, at a dinner she attended with other HR directors

“they both agreed that however much effort was put into managing an organisation well in human terms, some staff will stick in a claim because they know it’s likely to be lucrative”

and

“two-thirds of claims are settled out of court … often because the costs of fighting, irrespective of the weakness of the employee’s case, are prohibitive”.

Later in her article she writes

“The employee is very often supported by lawyers who have no intention of arguing a flimsy case in court but who know how to sabre rattle and hold their nerve until the employer settles on the eve of a hearing”.  She advises that if you “Google ‘employment law’ you will find endless numbers of websites of these parasitical creatures”.

It’s all fairly tedious and there is no easier target than a Claimant lawyer.  It reminded me of the (long ago) days when I used to do some criminal law.  Politicians, newspapers, ordinary people and, sometimes, clients were always keen on tougher sentences for offenders other than themselves, their partner or child.  If Ms Giles has the misfortune to fall out with her employers I assume she will not be googling for her nearest parasite, sorry well qualified legal adviser.

She overlooks the underlying reality of the situation which is that employees face a tough decision in challenging their employers: the employee relies on the employer to pay their mortgage and bills. This is what I think Clive Howard of Russell Jones and Walker meant when referring to there not being a level playing field between employer and employee. Raising a grievance rarely improves anyone’s career prospects and for an employee to walking out claiming constructive dismissal is highly risky.  Despite the plethora of laws, especially in the area of discrimination, that allegedly  make it impossible for managers to manage, very few discrimination claims succeed at Tribunal.

But, having said all this, there is something in what she writes.  ETs do take too long to deal with cases and some employees undoubtedly use unfair dismissal and discrimination claims to bring employers to the negotiating table.  I wrote about this last November in the Law Donut blog. If you want to reduce the number of speculative  claims then introduce “cost shifting” at the end of the case or, to put it another way, get the loser to pay (this power is already available to ETs in cases where one party has acted unreasonably, but Tribunals remain reluctant to use it).

Ms Giles suggests something along these lines (I think) but rather complicates matters by calling for an “initial assessment” (by whom?) of a claimant’s “prospects”. If a Claimant was at risk of having to pay the employer’s legal costs if their claim failed it would certainly sort the wheat from the chaff, as would requiring claimants to pay a fee to issue their claims.  That would stop the serial litigants in their tracks and would also be cheaper than jailing them, as Ms Giles suggests.

However, introducing costs shifting would further encourage the no win no fee brigade (and thus prompt more anguished headlines from the same people who criticise claimants pursuing their legal rights at the moment) who would then try and flog Claimants “After the Event” insurance policies and thus make the funding of employment litigation as complicated as it has become in personal injury cases.  Following Lord Justice Jackson’s report into civil litigation costs and the ongoing government review, it may not be possible for a winning Claimant to recover the cost of the ATE premium from the loser in future, but we will have to await the government’s review of civil litigation to see what comes of this.

In my blog post on Law Donut (above) I suggested that the ET system be abolished and amalgamated with the Court Service as a means of addressing these problems and, probably, saving the state money. Somewhat radical maybe but employment law is increasingly complicated and a world away from the National Industrial Relations Court and the original Industrial Tribunals of the early 1970s. As @ljanstis reminded me, the administration of the Courts and Tribunals Services is to be merged in April, so full merger of all practice and procedure is  probably not that off the wall.

Judges in Courts would be more robust over awarding costs when appropriate and it would also end the difficult jurisdictional issues that can arise in some cases.  It would probably suit employers more than employees, especially if the three month deadline for issuing proceedings remained.

What do you think?

What we need is a sensible debate in this country over employment law, rights and procedures. sadly, Ms Giles undermines the sensible underlying points she makes through the use of sensationalist language which may get a good headline but doesn’t assist the real issues at all.

(*) Sadly it’s behind the paywall so I can’t link to it.

PS Thanks to @Bleak_Flat for bringing the article to my attention in the first place.