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By Michael Scutt, 29/01/2010 10:01 am

Truly I can see the future. A few weeks ago I wrote on this blog about a website run by Gordon Turner and Damien McCarthy, the two employment lawyers who set up www.serial-litigants.com, designed to keep a check on those claimants who repeatedly bring claims against different employers (or potential employers) for the same thing – usually discrimination claims.  I welcomed the scheme but thought that it might hit problems with the Data Protection Act, which governs what information can be held on people and how it can be used.  Then, lo and behold, I received this email from Gordon Turner a few days ago;

Dear Michael

 ALL GOOD IDEAS MUST BE SHOT DOWN

 …or so it seems. As you predicted, our service is to be challenged, although it is not clear why because (a) we have no database and (b) have already taken and implemented advice from the ICO.

 We are meeting an MP on Monday to see if a helpful EDM can be set down in response, namely to properly debate the degree to which serial litigants are (or may be) a ‘big problem’.

 With one claimant alone having brought well in excess of 50 claims (without ever showing up to hearings) our concern is that the problem or serious threat of a problem by serial litigants is neither audited or monitored in any way.

 There must be a way of striking a balance between the policy issues of dispensing with the Register and the needs of the public and employers.

 Regards,

Gordon Turner

 The EDM (Early Day Motion) will probably not be debated; most aren’t.  EDMs are a mechanism whereby backbench MPs can promote issues and raise awareness.  Although this EDM does criticise the abuse of the system by serial litigants, it does not suggest a practical alternative and that is regrettable.  This is the text of it;

I don’t think the reputation of the Oracle at Delphi is in too much danger as it was always likely that a challenge to this website would arise.  Serial-Litigants.com works by searching the Register of Decisions held by the Employment Tribunal.  If the same person keeps cropping up time after time this is then material for cross-examination at the final hearing or, more likely, for a strike out application early on. The idea is that when a Claimant is faced with evidence that he/she has been submitting multiple clams his credibility will be so badly damaged that no Tribunal would give the allegations credence. In my earlier post I said that this scheme deserves to succeed and I still think that. Some sort of safeguard is necessary for preventing vexatious litigants from making a fast buck out of the justice system – in the worst cases putting in multiple claims with the aim of forcing the employer into making a financial settlement is no better than extortion.  What is missing from this debate so far is any sort of statistical analysis on how significant a problem it is.  The EDM states that it “does not accept that these individuals are a big problem”:  does anyone know of any figures out there? Perhaps Gordon Turner or Damian McCarthy could respond on that?

Where the EDM might be on stronger ground is in saying that the website could be used by employers for screening out job candidates who had previously taken legitimate claims against their previous employers.  That is a concern in just the same way as the blacklist maintained by The Consulting Association on construction workers and the Retail Consortium’s register on shop-workers was.  I can see that the website could be misused in this fashion but, in the bigger picture, how many employers are going to pay the fee (currently £99 per search, although temporarily reduced to £50) each time they employ someone?  I think it unlikely that many employers will do that. Which is the bigger risk: serial litigants ripping off innocent businesses or honest employees being screened out by unscrupulous employers?    How else can this problem be tackled if not by a search based system?

Well, I can think of two options. One way would be to introduce Tribunal fees upon issuing proceedings, in the same way that is required when commencing a claim before the County or High Court.  The level of fees can be swingeing though, especially in the bigger claims and that is because (laughable) government policy for some years now has been to make the court system self-financing by its users.  Hence you have to pay a large fee even if you want to cough in court.  Employment Tribunals do not require a fee to be paid and the system is “free” at point of delivery.  Introducing large issue fees might stop the scamsters but it would also prevent genuine claimants from getting access to justice and would be a political non-starter.

The second option would be to introduce “costs-shifting” in the ET.  This occurs in the civil courts and means that the winner gets his costs paid by the losing party. In ETs it is very unusual for the Employment Judge to award costs against a party, so the general rule is that each party bears its own legal costs win or lose.  It is this rule that makes it attractive for serial litigants to “try it on” because they know many employers will pay up a “nuisance settlement” sooner or later to avoid the case going to a full hearing because they won’t want to incur legal expenses that they won’t recover from the Claimant.  That is why serial litigants are performing a type of extortion, in my view. 

The problem is in identifying the serial litigants. Someone who has brought fifty claims against fifty different employers ought to be a surefire candidate; but what about someone with ten, or five, or (worryingly) two claims?  An employee who has had the misfortune to be involved in previous ET proceedings is not prevented from bringing his/her claim by this website.  It is for the Respondent (the employer) to adduce the evidence and make of it what it will: similarly the employee can give evidence to explain.  Most employers would probably be keen for costs shifting to be introduced into the ET system, but I can’t see it happening any time soon.  Instead the serial-litigants search system offers a practical option accessible by all.  I don’t have shares in it, I don’t know Gordon Turner or Damian McCarthy (although I do instruct other barristers in his chambers) but I do think it deserves to succeed.  No one is well served by allowing serial litigants to abuse the system, least of all genuine employees with honest claims.  In his email to me Gordon Turner  writes that he is seeking to drum up support from a sympathetic MP to place an EDM in response.  I look forward to news of developments.

 I would be very interested to hear from anyone – lawyer, employer, or MP – who has any information on how widespread this problem is, or any anecdotes on serial litigants (on an anonymised basis please).  

Related posts:

Serial Litigants Beware

Blacklists to be blacklisted?

A Rant about Data Protection

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By Michael Scutt, 06/01/2010 5:37 pm

Wot, no snowman?

I’m not referring to the five inches of snow outside as I write this, and the inevitable disruption caused to roads and railways for the next week,  but instead I am considering what the main statutory changes affecting employment law issues in 2010 will be.

January  

Not much will happen this month while everyone looks in astonishment at their credit card bills, but just a reminder that the Vento guidelines on awards to be made in cases of injury to feelings in discrimination cases look to have been increased late last year in the case of Da’Bell v NSPCC. The Court of Appeal case in Vento v Chief Constable of West Yorkshire Police in 2002 set three main bands for ETs to consider when making awards for injury to feelings; 

Lower – £500 – 5,000                       – for one-off or isolated incidents 

Mid     - £5,000 – 15,000 – for more serious incidents but not of the most serious nature 

Upper -£15,000 – 25,000               – for the worst examples of discriminatory behaviour, such as where there has been a campaign of bullying and harassment.  Only exceptionally should awards be made in excess of the upper figure. 

Since 2002 these bands have not changed.  It is now anticipated that the new bands will be 

Lower:  £? – 6,000 

Mid – £6,000 – 18,000 

Upper – £18,000 – 30,000 

For a fuller and very helpful discussion see Usefully Employed’s post on the subject.  

February 

This month will see something that hasn’t occurred before.  The maximum compensatory award that can be made by an Employment Tribunal for unfair dismissal will actually decrease. The Employment Rights (Revision of Limits) Order 2009 states that the maximum award will decrease from its current £66,200 to £65,300 for all claims where the event giving rise to the claim  occurred on or after 1^st February 2010.  This is because the maximum amount is linked to the Retail Prices Index (RPI) and that fell by 1.4% in the year from 1^st September 2008. 

The MINIMUM AWARD that can be made to an employee excluded/expelled from a Union and not re-admitted by the time the case reaches an ET falls from £7,300 to £7,200 

The maximum guarantee payment to an employee under s.31(1) ERA 1996 decreases to £21.20 per day. 

Each February also sees various other rates and limits amended – usually upward.  This time though the maximum weekly award, used for Statutory Redundancy Pay purposes and calculating the Basic Award in Unfair Dismissal cases will remain at £380, but only because it was increased to that figure last October.   

April – other notable increases, will be 

Statutory Adoption         } 

Paternity                            }                          all increase from £123.06 to £124.88 per week 

Maternity Pay                   } 

Maternity Allowance      } 

But, Statutory Sick Pay (SSP) will remain unchanged at £79.15 p.w 

This month will also see employees at employers with at least 250 employees acquire the right to request time off for studying or training relevant to the business.  The right is simply to request time off NOT for the employer to fund the training. 

Income Tax will rise to 50% for those earning more than £150,000 p.a 

October 

Legislative developments tend to occur in April and October now.  In October it is expected that the Equality Bill will come into force to hopefully bring some order to the convoluted and confusing plethora of anti-discrimination laws currently on the statute book. It won’t just tackle discrimination in the employment arena, but will be wider ranging. Contractual provisions that prevent employees discussing their pay with workers are expected to be made illegal and the government will acquire the power to force privatre companies to disclose gender-pay details.  More on all this in due course, assuming that it survives a change of government 

Throughout the year there will be new cases being decided that will make the headlines, or appeals considering cases that caused a stir in 2009.  I will cover these as they come up so please subscribe to the RSS feed or to the email updates for “breaking news”. 

If you need advice on any employment law issues please call me on 0207 464 8433 or email me at michaelscutt@dalelangley.co.uk.

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By Michael Scutt, 25/11/2009 10:04 am

Take a look at this article from The Daily Telegraph.  A good idea in principle but I’m wondering about the Data Protection issues involved, as well as the subsequent satellite litigation that would undoubtedly result.  Does anyone remember the blacklist of “difficult” employees compiled by The Consulting Association (see my previous post on the subject here)?  Or the National Staff Dismissal Register (see here) ? 

I can accept that there is a world of difference between a register kept by employers and passed on to others to identify those employees who stand up for their rigths and those people who bring many different (and fabricated) claims – but how do you differentiate between the two in practice?  I suppose we should bear in mind Oscar Wilde’s aphorism (albeit paraphrased) “To have one Discrimination claim is unfortunate, to have 34 is downright suspicious”.  Preventing someone from asserting their legal rights is not something to be undertaken lightly. 

It’s interesting that the Employment Tribunal isn’t keen to get involved and I can see why.  These serial litigants might turn their hand to defamation or judicial review instead of discrimination claims. Tribunals are wary of awarding costs against litigants and they certainly aren’t going to relish banning individuals from bringing claims. Since 1993 they have had the power to make a “restriction of proceedings order”, but they are very rare.   The way forward is shown  by Her Majesty’s Courts Service, which runs all the civil and criminal courts (but not the Tribunals) in the country and which maintains a list of vexatious litigants on its website (www.hmcourtsservice.gov.uk).  However, the people listed on there will have been declared a vexatious litigant in proceedings and thus there has been a judicial finding.  If Mr Turner’s idea is to get off the ground (and it deserves to) he will need the ET to be more robust in making  “restriction of proceedings orders” and then publishing that list. 

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By Michael Scutt, 05/11/2009 10:35 am

For those of you on Twitter I am being twitterviewed tonight by 22Twts. If you haven’t come across one yet, a Twitterview is a series of (22) questions posed by Lance Godard and my responses, in real time, on Twitter.  Lance asks some really interesting and high-profile people to do his Twitterviews so I’m delighted to be asked to take part and be in such august company.

It starts at 20.00 GMT and please take a look when I will be revealing my deepest darkest secrets, or something, as well as talking about Dale Langley & Co and employment law.  I don’t think Hello or Ok magazines will be terribly interested though.

 You can follow me  = @michaelscutt  and the  twitterview can be found at @22twts and #22twts 

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By Michael Scutt, 04/11/2009 3:14 pm

The case of Grainger PLC v Nicholson UKEAT/0219/09/ZT gained lots of media coverage, including the front page of today’s The Independent (“Green beliefs win legal protection”).  I covered the case when it was before the Employment Tribunal and Mr Nicholson initially won.  The Employment Appeal Tribunal (EAT) has rejected the company’s appeal and held that Mr Nicholson’s belief in climate change is capable of qualifying as a philosophical belief within the meaning of the Employment Equality (Religion or Belief) Regulations 2003. These regulations protect workers with religious or philosophical beliefs from being discriminated against because of their religion or belief.  This was a preliminary hearing on whether belief in climate change could qualify within the meaning of those Regulations.  Mr Nicholson still needs to return to the ET for the case on its facts to be decided.  That will include cross-examination of his beliefs to establish to what extent they govern his life.

It is predicted that this decision will lead to employees being able to claim that they have been discriminated against on the ground of any spurious or loony belief that they might have or pretend to hold.  Undoubtedly employers are going to face some interesting assertions of belief over time.  To assist in considering what factors should be taken into account when considering the nature of the asserted belief, the EAT set out some guidelines for deciding whether a “philosophical belief” should qualify;

1. The belief must be genuinely held
2. It must be a belief and not an opinion or viewpoint based on current information
3. It must be a belief as to a weight and substantial aspect of human life and behaviour
4. It must attain a certain level of cogency, seriousness, cohesion and importance
5. It must be worthy of respect in a democratic society, be not incompatible with human dignity and not conflict with the fundamental rights of others   

The judgment notes that political beliefs could qualify for protection and, given the furore over Nick Griffin’s recent appearance on BBC’s Question Time and subsequent media concern that the BNP is on the rise, it is interesting to consider whether a member of the BNP  who is dismissed from his/her job because of support for the BNP could qualify under these Regulations for protection.  This was raised in Grainger and the Court pointed to (5) above as the limitation which should prevent “racist or homophobic political philosophy” from gaining protection.  On the face of it, therefore, the hypothetical BNP member would not be able to claim under these Regulations.  This is, of course, a fairly new area of law and that particular issue has not yet been tested.   

Please contact me with any comments or details of any other cases that take this point further, or if you simply need advice on your own position.  I can be contacted on 0207 464 8433 or via email at michaelscutt@dalelangley.co.uk

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By Michael Scutt, 05/10/2009 3:49 pm

Kevin Keegan has won his case for constructive dismissal against former employers Newcastle United, being awarded £2mn by the Premier League’s Manager’s Arbitration Tribunal.  He left the club in September 2008 after falling out with them over the purchase of a player Ignacio Gonzalez (who?) against his wishes. 

Two issues arise from the case. Firstly, although the BBC website report does not go into the technicalities of Keegan’s case I would guess that he claimed the acquisition of Gonzalez constituted a fundamental breach of the implied term of trust and confidence between employer and employee. After all, if the manager doesn’t choose the players who does (probably a good question to ask in respect of Chelsea and several other clubs from time to time come to think of it)? Secondly, Keegan claimed stigma damages – £16.5mn of them – on the basis that he would not obtain further employment in football until he retired at 65.  More on this further down.  

Constructive dismissal is a claim for breach of contract.  It isn’t necessarily a claim for unfair dismissal, but it will be wrongful dismissal.  Keegan was reportedly on a three year contract worth £3.5mn per annum and had approximately three years to run.  It would be interesting to read the full report (if available, which I’m sure it won’t be) to find out what claims he put in and why he was awarded a fairly low figure, in relation to the potential size of the claim.  The panel probably thought he could obtain alternative work elsewhere within the unexpired portion of his contract and would thus mitigate his loss.  He was reportedly seeking £25mn as compensation for his losses until retirement at 65.  It is further reported that his contract placed a ceiling of £2mn on the amount of compensation he might be awarded in the event the parties fell out.  I can only assume that he pressed on with his claim for £25mn on the basis that the repudiatory breach of contract caused all terms in the contract, including the compensation ceiling, to fall away, leaving the field open to him for a bigger claim.  

Most cases of constructive dismissal don’t involve anything like those numbers, but the legal principles are the same whether you are the manager of a football club or working in an ordinary office.  To succeed with a claim an employee will need to prove that the employer repudiated a term or terms in the contract of employment in some way and that breach was so serious that it discharged the contract.  The employee then has to accept the repudiation by resigning in response to it and this is where many claims go wrong because the employee either waits too long (and “affirms” the breach) or doesn’t make it clear that they are resigning as a response to that breach.

For most people constructive dismissal is a big step to take because it usually means leaving without any notice monies or compensation; they have to be argued or litigated over later on.

Stigma damages – is a fairly unusual type of claim and, no doubt, the Geordie hordes will be less than thrilled that their “Messiah” now feels he has been tarnished by his association with them. It is a species of claim that arose out of the BCCI litigation in the last decade when a Mr Malik, who had worked for them for several years claimed that he would find it hard to get another job within the Financial Services industry because BCCI was known to have been operating fraudulently.  The Court of Appeal allowed Mr Malik to succeed with his because it said that there was an implied term in the contract of employment that the employer would not run a corrupt or dishonest business.  Sam Wallace, a football writer in today’s The Independent gets very steamed up at Keegan’s “greedy” claim.  Leaving aside the morality of the claim, or otherwise, I fail to see how Keegan ever hoped to succeed with the claim.  

 Always take legal advice before claiming constructive dismissal.   If you need any advice on these issues please call me on 0207 464 8433 or email me at michaelscutt@dalelangley.co.uk

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By Michael Scutt, 01/10/2009 3:50 pm

As I mentioned in my last post, today sees a raft of new regulations introduced by the government. The policy now is to do this twice yearly, on 1^st April and 1^st October.  Last April saw the repeal of the statutory dispute regulations under the Employment Act 2002 and there was much cheering and rejoicing.  This month there is less to get excited about, although the introduction of the new Supreme Court as the final court of appeal in the UK, replacing the Judicial Committee of the House of Lords, is a moment of historic legal importance (see later).  Many of the regulations are technical amendments to company or partnership law.  The following are, perhaps, the most newsworthy;

•  Statutory Redundancy Pay will be increased from £350 per week of complete service to £380 (see my earlier post).

•  The National Minimum Wage (NMW)  is increased for those aged 22 or more from £5.73 per hour to £5.80.  For 18-21 year olds the increase is £4.77 to £4.83 and for 16-17 year olds it is £3.53 to £3.57.  From 1^st October 2010 the full adult rate will apply to those aged 21 or more.

• Employers are now banned under the NMW legislation from counting tips towards the NMW.

• The Workplace Parking Levy – this has crept under the radar.  The Workplace Parking Levy (England) Regulations 2009 come into force today allowing, from 2011, local authorities to charge employers who provide parking spaces to their employees.  Nottingham City Council has announced it will introduce such a scheme but won’t impose the charge until April 2012.  The levy will be made on employers who in turn will be able to pass that on to their employees if they wish.  Expect much wailing and gnashing of teeth from … everyone in a couple of year’s time.  The scheme is introduced in the name of reducing congestion and improving public transport, but they would say that wouldn’t they?

 Of more immediate interest is the ongoing talk of restricting bankers’ bonuses.  I will be covering that story in a later poat.

If you require any further advice on any of these issues, on redundancy programmes, or any other aspect of employment law, please do not hesitate to contact me on 0207 464 8433 or at michaelscutt@dalelangley.co.uk

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By Michael Scutt, 24/09/2009 9:00 am

Two weeks ago I was speaking at a seminar entitled “Competing in a Changing Environment” ¹  on the subject of “Tesco Law” and the implications of Alternative Business Structures on the profession.  One of the delegates, a solicitor, asked what our “union” i.e. the Law Society was doing to promote its members’ interests.  I demonstrated my ignorance by saying I wasn’t aware of any promotional schemes afoot.  Then, as if by magic, as used to be said of Mr Ben (that’s the cartoon shopkeeper not the current Secretary of State for Environment, Food and Rural Affairs, still less his father Tony the scourge of the Labour Party in the 1980s but now national treasure), news comes out that the Law Society is running a promotion to boost the solicitor “brand” starting last Monday and running to the 30th October.  The theme is “Help, I need somebody … but not just anybody”.

The purpose of the campaign is to help solicitors attract new business and retain existing clients by focusing on the “reassurance to be gained by seeking advice from a properly qualified professional”.  The press release describes solicitors’ USP as including the following virtues;

• more expert and reliable than other providers of legal or quasi-legal services
• properly regulated
• excellent value for money

I don’t disagree with any of this and it is just what the profession needs as it copes with a tough recession and, more importantly, tries to adapt to the huge changes that are on the horizon.  In these brand driven days raising the profile of the profession is especially important for smaller law firms without large marketing budgets or the time to devote to PR.  Many practitioners tend to be sceptical of the Law Society and I doubt this campaign will alter that view, but give it some support.

1. “Competing in a Changing Environment” - Lammore Consulting

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By michaelscutt, 14/08/2009 2:09 pm

I was pleased to learn that Riam Dean, the law student who sued Abercrombie & Fitch for wrongful dismissal and unlawful harassment (because of her disability) won her case at the London Central Employment Tribunal.  According to The Independent today, she was awarded £7,800 compensation for injury to feelings, £1,077.37 for loss of earnings and £136.75 damages for being wrongfully dismissed.  It is reported that she did not succeed with her claim for “direct” disability discrimination which the ET thought was “not well founded”.   I would be interested to read the law report on this case, if it ever gets published, for the reasoning behind the decision. I’ve posted before on the case (click here).

It’s always good to see the style police take a battering.

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By michaelscutt, 05/08/2009 12:00 pm

Unusually for an August the topic of bonuses is back in the news pages.  This isn’t surprising given that the recession has been firmly blamed on reckless bankers supposedly taking unnecessary risks to generate huge returns that almost led the banking system to collapse last autumn.  Both Barclays and HSBC have announced huge profits for the last six months.  In Barclays case it was £3bn up 8% on the equivalent period last year, and the comparable figure for HSBC was £2.8bn.  Both banks also revealed that they were making massive provision for bad debts.  Bob Diamond, the head of Barclays Capital (BarCap) was on the front page of The Independent on Tuesday, where it was reported that he had received a remuneration package in excess of $50mn at the height of the boom.  The Independent also reported that the “average net income generated per member of staff” at BarCap had increased from £134,000 to £193,000 per member of staff in the last six months.   The FT also reports today that a US hedge fund group called Och-Ziff, based in the US made a loss of $88.3mn because of a 74% increase in bonuses paid to its top traders.  At the Dale Langley & Co website we recently posted on the steps the FSA are taking to try and restrict remuneration packages – click here to visit.  The government, the FSA and the public are all determined to stick the boot in.

Much of the anger generated over this issue has been stoked by the fact that the taxpayer bailed out the banking system to prevent its collapse. In the case of Barclays and HSBC, of course, they did not directly receive state funds but are judged to have been indirect beneficiaries of the taxpayers’ largesse.  If this wasn’t August we would, presumably be seeing the usual collection of hippies, anarchists and eco-warriors calling for bankers to be strung up from the nearest lamp-post (where are they - visiting their holiday squats in Tuscany?)  The central issue is how do you balance the need for restraint with incentivising employees to produce the goods?   Some much needed perspective on the whole issue was provided by Sean O’Grady writing in today’s Independent (click here).   He calls for “sensible, intelligent rules” to govern remuneration packages and deplores the hypocrisy that sees people calling for bankers to hand back their bonuses:  “if you or I were offered a £25mn bonus, we wouldn’t hand it back.  Nor would we say no to the taxpayer paying for a second home, as our MPs did”.  Good performance should be rewarded appropriately.

This of course is the nub of the matter as far as employees (and employment lawyers) are concerned.  Over the years I have seen many people who are unhappy with the annual bonus they have been awarded and I’ve written before on the difficult legal issues that arise when it comes to challenging a bonus (click here).  In recent months with all the redundancies occurring, perhaps not surprisingly, it has become less and less common for employers to make any sort of payment in respect of bonus. When negotiating a contract of employment it is always worth trying to include provision for payment, or pro-rata payment, of the bonus that would have been received had the employee remained in employment at the payment date.

Repayment and clawback provisions in new contracts of employment are also becoming increasingly common, especially amongst those banks that have received state funds.  They will usually require that if performance (whether individual or corporate) does not match up to expectations then bonuses paid (including guaranteed bonuses) can be clawed back.  The period of time covered by the clawback can be quite lengthy, perhaps two – three years, meaning that the recipient employee can be left in some uncertainty about how secure the guarantee is. This is an issue that needs to be dealt with at the stage of negotiating the terms of the contract upon joining the business: it can sometimes be renegotiated to the benefit of the employee.   Just recently I have been instructed on a number of contract negotiations by employees who have secured offers of employment – evidence of “green shoots” perhaps?   - and some of the sting of the clawback was removed.