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.

Are Employers and Employees legal rights well balanced?

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.

No related posts.

Parasites and Legal Rights originally appeared on Jobsworth by Michael Scutt on 05/01/2011.

Are you a recruiter worried about what to write in a job advert?  Or concerned about inadvertently discriminating against applicants on the grounds of age?

It’s a difficult area and care needs to be taken.  However, some comfort can be taken from  a recent  case in the Employment Appeal Tribunal (“EAT”), which held that serial litigants may have to pay costs if they try to exploit the Age Discrimination Regulations for financial gain.

The case before the  EAT involved the same man who is alleged to have issued many cases against recruitment companies and employers alleging age discrimination in their job advertisements e.g “would suit school leaver” or “recent graduate”.  I have written about the issues concerning serial litigants before (see here, here and here).

In this most recent case Mr Justice Underhill gave a robust judgment in dismissing the Appellant’s appeal stating;

“We wish, however, to emphasise that the purpose of the Regulations is not to provide a source of income for persons who complain of arguably discriminatory advertisements for job vacancies which they have in fact no wish or intention to fill, and that those who try to exploit the Regulations for financial gain in such circumstances are liable, as happened to the claimant in the Investigo case, to find themselves facing a liability for costs.

It is about time that ETs started taking a stronger line on issuing costs orders against litigants, be they Claimants or Respondents, who try to exploit the system for reward. Not only is it wrong per se but it clogs up an already overcrowded ET system that hasn’t got time to hear the genuine disputes before it.

Thanks to @Anyapalmer for bringing this to my attention via Twitter

EAT says claimants who bring claims about ads for job in which they have no genuine interest may face costs orders: http://bit.ly/bUFJkx

12/11/2010 2:51 pm via webReplyRetweetFavorite

@AnyaPalmer

Anya Palmer

Related posts:

1. Age Discrimination – are the floodgates about to open?
2. Redundancy and Age Discrimination
3. Bankers and Age Discrimination

Can Recruiters Relax on Age Discrimination in Advertisements? originally appeared on Jobsworth by Michael Scutt on 15/11/2010.

Cereal Litigants?

There’s no need to resort to garlic, holy water, crucifixes, or rosary beads to keep them away (we’re not quite in Bram Stoker territory yet) but there’s no doubt that serial litigants are a blot on the ET landscape.

Following on from my previous posts on the subject, there was some good news a few weeks back in the EAT on the issue of what a claimant has to prove to succeed with a claim for age discrimination.  The case of Keane v Investigo & others UKEAT/0389/09/SM, commented upon by Gordon Turner and Damian McCarthy in ELA Briefing last month[1], held that a claimant has to prove a genuine interest in performing the job advertised.  There can be no detriment to an unsuccessful applicant if they had no interest in doing the job in the first place.

This decision may make it easier for employers to get these types of claim struck out.  It will be necessary though to demonstrate that the Claimant has no genuine interest in the job and has a history of other unmeritorious claims because the ET is not quick to strike out. Factors to consider might include whether they had made applications for similar jobs, where the jobs were based, did the claimant have any background in that area as well as whether they are suitably qualified for the job and did they follow their application up or did they just rush off to the ET as soon as they were turned down.   Serial litigants won’t go away, but they may well find their business model has just suffered a big dent.

Gordon Turner tells me that the Early Day Motion in Parliament, called before the election, criticising his Serial Litigants website, did not get enough support.  It is to be hoped that the new government might take a fresh look at the whole serial litigants issue and consider what practical steps can be taken to stamp this abuse out.

Related posts:

1. Serial Litigants beware!
2. Can Recruiters Relax on Age Discrimination in Advertisements?
3. Truly I can see the Future

How to Deter a Serial Litigant originally appeared on Jobsworth by Michael Scutt on 16/06/2010.

How not to Resolve a Dispute or Why Employees should never try to wear traffic cones

(picture right)  How Not to Resolve Disputes or Why Employees Should Never Wear Traffic Cones

I’ve had this question (or more usually) statement put to me a few times  just recently, most recently in a comment on this blog and the second by a delegate at a talk I gave at the City Business Library last Friday.  Both were employers that thought UK employment law gives employees too many rights and opportunities to sue employers already burdened with a vast number of rules and regulations.  In one obvious sense they are correct: employees have a vast number of rights of action available to them, from asserting a statutory right, via anti-discrimination legislation, equal pay, unfair dismissal and unlawful deduction of wages, to whistleblowing.  The concept of unfair dismissal only dates back to 1971 and employment law is very much a young upstart in English law compared to most other types of work. Also, the number of claims brought at Employment Tribunals has increased year on year (save for last year where there was a 20% decrease in the number of claims lodged at the ET – click here to go to the ET’s statistics report *)

Since 2004, when the government introduced statutory disciplinary and grievance procedures intended to promote dispute resolution between employers and employee internally, the number of claims being commenced at the ET has increased dramatically.  However, is it right to say that employees have everything their own way and that employers no longer have the freedom to manage?

There is no “costs-shifting” jurisdiction as of right in the ET. In other words the winner doesn’t automatically get his legal costs paid by the loser.  A Claimant also does not need to pay a fee to the ET to commence his claim; the form can be filled out online and submitted easily.  No wonder employers feel the balance has shifted too far towards the employee.  But look at it from the point of view of the employee.  Although they may have the right to, for example, request flexible working, comparatively few do.  Many also complain of work situations where they want to claim constructive dismissal, but few do because of the risk of resigning without a job to go to.  Further, every employee is under a duty to mitigate their financial losses, so if they do make a claim and also obtain an alternative job they will cut down what they might recover from the Tribunal if they win.  And that is another big issue and,  as the statistics show, most don’t win at Tribunal.

The main and justifiable complaint by employers is that employees can issue a claim, lead the employer into expense of time and legal costs and force the employer to settle the claim before it goes too far, in order to avoid costs getting out of hand.  The availability of no win no fee agreements means that employees can mount claims that perhaps they would not have been able to do in the days when they would be paying a traditional retainer fee.   In some cases, as I’ve discussed in previous posts on serial litigants, some unscrupulous people can make money from making repeated ET applications in the hope that the defendant business will pay up early to avoid the publicity or ongoing legal costs.   Whilst those type of claims may be a small minority,  you have to weigh the cost of preventing those claims against the need for access to justice and allowing employees with a genuine complaint to be able to bring their claims.

* That 20% figure may be artificially exaggerated because of the effect of  10,000 airline cases brought under the Working Time Regulations.  The report itself notes that the real decrease, ignoring these claims, may be a decrease of 4%.  The ET statistics also state that only 13% of the claims submitted were successful at Tribunal (i.e. the Claimant won), 33% were withdrawn (presumably because the employee was advised that they did not have reasonable prospects of success) and 32% were conciliated by ACAS.  In other words, employees may have many potential rights of action available to them, but less than half actually obtain any benefit from the claims (I say this on the assumption that all of those conciliated by ACAS led to some form of financial settlement for the Claimant: in most but not all  cases this will be so).

Related posts:

1. 40% of UK Employees Criticise Their Bosses on Facebook and Twitter

Do Employees Have it All Their Own Way? originally appeared on Jobsworth by Michael Scutt on 26/04/2010.

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

Related posts:

1. How to Deter a Serial Litigant
2. Can Recruiters Relax on Age Discrimination in Advertisements?
3. Serial Litigants beware!

Truly I can see the Future originally appeared on Jobsworth by Michael Scutt on 29/01/2010.