Firstly, information about the cost of taking employment law advice. This information must be considered advisory as, for example, employment tribunal costs vary enormously with the complexity of any matter. The best idea is to call us to discuss costs directly!
All our bills are ‘plus VAT’. All employment law work is carried out by Simon Steen who qualified in 1989 and thus has over 30 years of employment law experience. He did his first employment tribunal claim in about 1990 and has done nothing else but employment law since. Simon originally qualified as a barrister on advice that that was the best route to becoming an ‘in house lawyer’. He then did become an ‘in house lawyer’ and worked as such for about 5 years. Later, however, he decided that the commercial cut and thrust of private practice as a solicitor was more his style so re-qualified as a solicitor. Before moving ‘down south’ he was a partner of a large Northern firm of solicitors.
Our hourly charges (as of April 2020) are £275 plus VAT for most matters but £300 plus VAT for some matters. The rate will be explained to you at the outset of our relationship. We hardly have any other costs called ‘disbursements’ other than occasional train fares and barristers costs which can both attract VAT. Train fares are only occasioned when we are asked to travel to Client sites or to tribunals. We try and minimise such costs and will discuss them with you ‘as and when’.
This is one of our specialist areas. We deal with hundreds of settlement agreements a year. Normally we say that the minimum we will charge is £500 plus VAT. Within this time cost we will be able to advise whether the offer is a good one, whether the underlying dismissal or proposed dismissal is fair and on the terms of the settlement agreement. If we are able, thereafter, to negotiate more money for you we will do so and will, during this period, ensure as best we are able that the costs are proportionate to the increase in settlement. Typical costs range from the £500 mentioned above, to £1000 for a few weeks of negotiation to £3,500 for a couple of months of high-level negotiation on settlement, bonus and commission claims, share options and such like. The most we ever charged, all of which was refunded by the ex-employer, was £5,000 but that did result in a settlement of over £4 million. That was exceptional!
For example, the cost of providing advice and representation to employees in relation to unfair dismissal claims before the Employment Tribunal could range from £3,000 plus VAT to £12,000 plus VAT depending on the complexity and number of days the hearing is set for. Below we break down the steps involved in such an employment tribunal and explain what is required for each step. Another type of claim that might be brought in an employment tribunal is a ‘wrongful dismissal’ claim. This is a claim for breach of contract for not getting your notice period money. For those employees whose claim is not worth a lot of money it would not be economical to use almost any firm of solicitors as the costs will outweigh any award. As with many firms of solicitors, however, within the bands of us acting professionally and properly, we will adjust the amount of advice we can give to the amount of costs that either the client or the financial value of the case can bear. For some clients, therefore, this has involved us agreeing that we will have only one meeting of perhaps an hour and a half where we set out all the steps of such an employment tribunal claim so as to allow the client to fix their costs at the outset.
In any such wrongful dismissal claim we would also discuss whether to proceed in the county court instead. Employment Tribunals can only award compensation of up to £25,000 for damages for breach of contract. It may be that we can advise that you would be better off bringing your claim in the Small Claims Court, County Court or High Court.
For employer’s defending unfair and wrongful dismissal claims the costs will also vary. We are very experienced and focused on not allowing costs to run away – instructing Steen & Co Employment Solicitors is not a blank cheque for us to decide what we want to charge you. We will discuss the necessary work at all stages and, where your company can do some or all of the necessary work, we will work with you to enable this to be done. That said, we are the experts, we know what is and what is not relevant to the issues in the case and we know how to present tribunal cases. Clearly, it is important to discuss the likely costs at an early stage. There is little point, in most cases, of a company defending an employment tribunal claim at a greater cost than the employee is likely to recover or will settle for. That means using a costs efficient firm and ensuring that a lid is kept on costs. We can advise when the optimal time to try and settle is, as it is often not at the outset of the process or before the employee has issued proceedings. Our aim has always been to avoid tribunals if possible and in sacking an employee we know ‘it’s not what you do, it’s the way that you do it’ applies strongly. For example, our view is that the best way to increase the chance of your company being taken to an employment tribunal is to take away a departing employee’s self-respect or dignity.
The defence of a tribunal claim can range from £5,000 to ‘tens of thousands of pounds’. The most we have charged was for a 5-day defence of a whistleblowing claim brought against a FTSE 100 software company client of ours. Including the barrister’s costs (we use barristers for any case longer that 2 days or so) the costs in about 2010 were about £75,000. The losing claimant went to the EAT in that matter alleging bias by the original tribunal and that claim was also defeated. One of the major costs involved in tribunals for companies is ‘documents’ and so please consider taking advice at an early stage from us on the ‘bundle’. We can assist with proper and cost-effective advice on what needs to be in the bundle, what does not need to be in the bundle and what form the bundle should take. We think that taking advice on the bundle from us, at a cost of perhaps £1,000 - £2,000, at an early stage may save your Company tens of thousands of pounds in bundle preparation costs from another firm.
Simon Steen is an extremely experienced employment tribunal advocate and does nearly all the tribunal advocacy himself. The exception is when the case is listed for multiple days, in such a case it is better and cheaper to use an experienced barrister (referred to as Counsel). The charge for this firm to send a solicitor to the tribunal hearing can be £1,500 to £2,000 a day. Counsel’s fees estimated between £1,000 to £2,000 per day (depending on experience of the advocate) for attending a Tribunal Hearing (with the first day’s attendance costing more – perhaps £3,000 as it includes preparation).
In this note the ex-employee is called the Claimant and the Company is called the Respondent. The Claimant is claiming in Tribunal and the Respondent is responding to that claim.
The initial stages of an Employment Tribunal from the point of view of a company. This part of this article doesn’t just deal with costs but explains the steps in a tribunal case.
the costs of these stages are given as time estimates.
ACAS will have contacted you, except where the Claimant rejected ACAS conciliation before it even happened. If that has happened, the first you will know about a claim is when the claim form arrives.
If conciliation has not been rejected by the Claimant, ACAS will contact you. They will ask if you want to take part in conciliation. You have an immediate choice – yes or no. Saying ‘yes’ means that ACAS will try and conciliate a settlement. Saying ‘no’ stops the compulsory conciliation process. ACAS can still get involved if you later request it. If the Respondent immediately rejects conciliation by saying no quickly it might signal to the Claimant that it feels its case is strong. The converse, that getting involved in conciliation increases the Claimant’s view of the strength of his or her case, may also be true. There are tactics to consider, therefore, in how and if you deal with ACAS.
If conciliation is agreed by both parties then ACAS will go back and forth between the parties passing on messages with a view to reaching agreement. If a figure is agreed then ACAS will produce a settlement form called a COT3 and that is that (apart from paying the money, of course). There are time limits for this which ACAS will explain. The COT3 form can be drafted by ACAS or by one or both of the parties (if they agree). It can deal with property, confidentiality, references, announcements and, in fact, anything that could be in a settlement agreement.
How much time we spend dealing with the Client and with ACAS entirely depends on the engagement by the other side. In that respect we could spend no time with ACAS or a few hours going back and forth reaching settlement and dealing with the special ACAS settlement form: the COT3.
If settlement has not happened, because conciliation was rejected by either party or because conciliation didn’t lead to settlement, ACAS will produce a conciliation certificate which will contain a unique early conciliation number. The Claimant needs that number to bring a claim.
There are time limits for the Claimant to bring a claim. Broadly speaking these are three months less a day from the dismissal or discrimination but the ACAS early conciliation process ‘stops the clock’ and also extends the time, if necessary, to a month after the date of the certificate.
The next stage is that the ET1 (which is sometimes still referred to by its old name of ‘originating application’) is sent in time by the Claimant to the Tribunal. It will be rejected if he or she doesn’t include the ACAS certificate number.
The Tribunal reviews the application in accordance with the ‘Rules’. These are the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2013. They are not complicated and can be useful to read.
The Tribunal sends form ET2 - acknowledgement of application to the Claimant and Respondent. We may spend up to an hour or two reviewing the claim and checking, for example, what claims are being made, whether they are in time and what needs to be done.
The Tribunal also sends form ET3 - Defence or ‘Notice of Appearance’ - to the Respondent and gives it 28 days from the date of the ET2 to lodge the completed defence back with the Tribunal. If you can’t respond in time you must apply to the Tribunal, with reasons, for an extension of time. That application must be within the original 28 days and don’t assume that it will be granted. Skill and experience is needed in filling in the defence. You must work out what the elements of the Company’s defence will be and include them. Roughly speaking, the ET3 should contain a summary of the Company’s case, state what parts of the ET1 that the Company does not agree with and thirdly, deal with any necessary legal issues. It is not sensible to consider a homemade defence.
The services provided by different ACAS representatives varies. Some are nothing more than a glorified message service. Some are really poor, for example, we have experience of ACAS people listening to what we are saying and then passing on different information to the other side. To avoid this, you can use email and letters to communicate with ACAS and tell them to pass the letter or email onto the other side. You can also write to the other side directly but you shouldn’t cut ACAS out completely. Some ACAS reps are excellent. We worked with one who helpfully chaired a meeting between the parties at our offices to facilitate settlement.
An overall note about being a Respondent: at the earliest stage we advise you consider what your final speech will be in Tribunal. This is your ‘destination’ and to continue that metaphor: you can’t plan your journey until you know what your destination is. Knowing what you will want to say at the end of the case helps you know what your defence should say, what documents you will need and what needs to be in your witness statement.
Drafting the defence takes various amounts of time depending on the complexity of the matter and on our ‘instructions’. Sometimes clients are not able to really explain why they dismissed the ex-employee and we spend a lot of time ‘recreating’ the dismissal reasons from emails and notes taken by the ex-employer. Other times the reason for dismissal is clear and well documented. Once we know the Company’s defence to the claims, we will draft the defence (called the ET3). The costs could range from a few hours to about 6 hours.
After the defence or ET3 has been sent back to the Tribunal, the Tribunal sends Directions. Sometimes, in simple cases, it sends these out with the ET2. Directions are process and timetable orders. They can be standard or bespoke. If bespoke, they are sometimes created after a ‘directions hearing’ when the issues are discussed. It is common for directions hearings to be conducted over a conference call with a judge. The Respondent and its lawyers need to put all the dates for the directions in their diaries.
Sometimes Tribunals serve questionnaires of all possible pre-hearing questions and ask the parties to fill these in before a preliminary hearing.
Sometimes ‘mediation’ is considered. This can be privately organised but is sometimes offered by the employment judge. If the parties are in dispute about the facts or about the process then judicial mediation will not be offered. Note this point – you are not likely to be offered mediation if you are in dispute with the other side over anything other than the actual case itself. So, arguments about timing, witnesses, ridiculous claims by one side or the other or even hostility are good reasons why mediation will not be offered. A mediation will take about 8 hours in preparation and attendance. A recent one we did was at Reading Employment Tribunal and involved 2 ½ hours of time in preparation – making a mediation bundle, calculating a range of settlement offers and discussing matters with our Client, plus about 5 hours for the mediation itself including travel to and from the tribunal.
In cases with lots of issues, the parties are ordered to create a “statement of issues” and this can be complicated. The ‘issues’ are a list of the legal issues. So, for example, in a misconduct dismissal case, the legal issues will include the reason for dismissal, whether there was genuine belief, on reasonable grounds, after a reasonable investigation, after a fair procedure, whether the ACAS code was followed, whether dismissal was within the range of reasonable responses open to a reasonable employer, whether the dismissal was fair, if not, whether the Claimant’s conduct was such that any compensation should be reduced and/or whether had a fair procedure been deployed the Claimant would have been dismissed in any event. This is the ‘Polkey’ reduction.
If neither party are legally represented then the Tribunal is not likely to require a ‘statement of issues’ to be produced. In such a case it may order a preliminary hearing at which the Employment Judge decides what the issues are. We have precedents for all the main types of ‘list of issues’ but even so, the time involved can be considerable particularly if we are having to deal with difficult parties on the other side. The time estimate for these issues is about the same as for drafting the defence. That said, a good defence in a tribunal, or for that matter, a good claim form, may define the issues sufficiently well so as to avoid the need for a formal ‘list of issues’.
An example of an order as to the ‘List of Issues’ is as follows
Where the claimant and the respondent are both professionally represented, the professional representatives shall prepare a draft statement of issues or questions that are to be decided by the Tribunal at the hearing. The draft statement of issues shall be subject to the Tribunal’s agreement at the commencement of the hearing.
The Respondent should start as early as possible creating a list of all relevant documents. Dealing with documents is one of the most time involved parts of the process. You should ask us for a detailed explanation of what should be in the bundle of documents and how it should be structured. Don’t write or mark on the documents in the bundle as they will be copied many times. It is not helpful to print on both sides as someone may later be running all the documents through a copier. Although you disclose all relevant documents to the other side you need to agree with the other side what actually needs to be in the eventual Tribunal bundle. Sometimes the directions order specifies a maximum number of pages.
The next direction will be to produce and provide a list of documents. This requirement covers all relevant documents not just those that the Respondent intends to rely on and not just those that help your case. Failure to disclose relevant documents is a serious issue. Each side will also be required to send any document on that list to the other side if requested. It is sometimes best to just send all the documents and the list in one go as it saves time and work.
The Tribunal will order one side or the other to produce a bundle for the Tribunal containing both sides’ documents. Sometimes it makes sense for the Respondent to take on this responsibility as at least it guarantees control of the bundle and a neat and tidy product. An example ‘order’ as to production of the Employment Tribunal Bundle is as follows:
By such and such a date the respondent shall then prepare sufficient copies of the documents for the hearing. The documents shall be fastened together in a file so as to open flat. The file of documents shall be indexed and limited to 100 pages. The documents shall be in a logical order. All pages shall be numbered consecutively. The respondent shall provide the other parties with a copy of the file. Four copies of the file shall be provided to the Tribunal at the hearing (and not before).
Some Claimants have no idea what should be in the bundle and ask for vast amounts of irrelevant documents to go in the bundle. Our worst experience was a Claimant who printed 3 ½ feet of documents and left them in our Client’s reception. We refused to read them and sought assistance from the Tribunal in making an order that he index them and cut the number down to a reasonable amount. Both sides in an Employment Tribunal need to think about their documents early in the process.
The next direction will be to send documents to the other side. This is called ‘exchange’. Sometimes the list and exchange are ordered at the same time and even if this is not the case, as we said above, it is time saving to do so. Your duty to exchange relevant documents does not stop just because you have already exchanged the main documents. Thus, at all stages thereafter, even if the tribunal has already started, if new documents that are relevant come to light, they must be exchanged. The Tribunal will cope with this but it there are lots of new documents expect some criticism as to why they weren’t disclosed earlier.
‘These days’ we use Adobe Acrobat to deal with the bundle and with numbering the individual pages. The time involved is considerable. The last bill we sent for a tribunal claim involved two sessions of ‘dealing with the bundle’ which together added up to about 8 hours. Both those sessions involved us working directly with our Client in front of a computer moving documents in and out of Adobe Acrobat in order to create the final bundle.
Either side can, in theory, ask questions of the other side in writing setting out why the question/answer is relevant. Sometimes one or the other party (or even the Tribunal) requests another party to provide further information or documents. Tribunals can order parties to do so when required.
Sometimes there is a preliminary hearing – this can be to decide directions and/or to decide a qualifying condition for continuing such as ‘was he an employee’ or ‘is she disabled’.
The next stage is that exchange of witness statements is ordered. Drafting such statements is time consuming. They should reference the bundle pages as required. We have produced a separate article on witness statements.
The normal order is to require the parties to exchange the witness statements at the same time. This usually means calling the other side and agreeing a date and time when they are sent by email. An example order as to witness statements is as follows:
By such and such a date the claimant and the respondent shall prepare full written statements of the evidence they and their witnesses intend to give at the hearing. No additional witness evidence may be allowed at the hearing without permission of the Tribunal. The written statements shall have numbered paragraphs. The claimant and the respondent shall send the written statements of their witnesses to each other. The length of the statements for each party shall be limited as follows: the Claimant – 3,000 words; the Respondent’s witnesses – 5,000 words in total. Two copies of each written statement shall be provided for use by the Tribunal at the hearing (and not before).
If, when you receive the other side’s witness statements, you realise that they contain evidence that you haven’t dealt with (because, for example, they deal with matters that were not in the other side’s claim or defence) you can produce a supplementary statement. This is specifically mentioned in the relevant ‘President Guidance General Case Management’ direction which is a sort of overall order for all tribunals. The current version is from 2014 and can be found online. The specific order in your case (as per the example order above) might say that you can’t use additional witness evidence without the permission of the Tribunal. If so, write to the Tribunal explaining exactly why the new evidence is needed and copy your letter to the other side. At the same time send a copy of the proposed new witness statement.
Witness statements can take a considerable time. We estimate that a straightforward defence with one witness will still take 4 or 5 hours to deal with but a complex discrimination case with multiple issues can take up to 10 hours.
Another direction is that the Claimant is ordered to serve a ‘statement of loss’. Sometimes a statement of loss is ordered at the outset and an updated one 7 days before hearing. There is no reason why a Respondent can’t use its payroll and or accountants to pick holes in the claims in the statement of loss and, in fact, should do so. In addition, if the Claimant’s ‘remedy statement’ or ‘statement of loss’ is inaccurate there is no reason why the company can’t produce its own or mark up the Claimant’s version with corrections. The Respondent should put sufficient information in the bundle to ensure the Tribunal knows exactly what the Claimant earned. Sometimes this will simply be the last three months of payslips and, in fact, that is the very minimum needed. It is also very useful to include the contract of employment, the most recent P11D and the P45. An example order of this nature is as follows:
By such and such a date the claimant shall set out in writing what remedy the Tribunal is being asked to award. The claimant shall send a copy to the respondent. The claimant shall include any evidence and documentation supporting what is claimed and how it is calculated. The claimant shall also include information about what steps the claimant has taken to reduce any loss (including any earnings or benefits received from new employment). The Claimant shall serve an updated remedy statement 7 days before the hearing.
We are regularly asked about ‘statements of loss’ by potential clients. Unfortunately, they are complicated to produce. Essentially, they will come down to a structured explanation of the net and gross salary and benefits the ex-employee received when employed, the notice period pay, holiday pay and other payments they received on termination, the length of their unemployment, the net and gross salary and benefits the ex-employee is getting or expects to get in their new job and, therefore, the ‘actual losses’ to the expected date of the tribunal and the ‘future losses’ they expect to make in the future. The statement will also need to set out the ‘basic award’, the amount of the claim for what is called ‘loss of statutory rights’ and the amount of expenses the ex-employee has incurred in finding alternative employment. The above just deals with straightforward ‘unfair dismissal’ cases.
Similar calculations and estimates are needed for discrimination cases but in those cases, ‘injury to feeling’ awards need to be estimated and those estimates need to be backed up with evidence of previously awarded amounts.
We say that that process is a bit like an estate agent providing evidence of the sales of comparable houses to justify his or her house valuation. In discrimination cases an interest calculation will also need to be made. We have a bespoke Excel spreadsheet providing a tax and date calculator for calculating these amounts but, if an accurate and acceptable statement of loss is to be done, in terms of both determining an appropriate amount to claim in the Tribunal and also an appropriate amount to offer in settlement, then at least 5 to 10 hours of time will be incurred.
Respondents should consider collating a bundle of job advertisements that the Claimant could have applied for. If you lose in the Tribunal you can fall back on arguing that there were loads of jobs that the Claimant should have applied for and didn’t. If the Tribunal agree (and they won’t agree without evidence of such jobs from you) then it will only award compensation based on the time the Claimant would have been unemployed if he or she had been more diligent in applying for jobs. Occasionally, when large amounts of money have been at risk, we have obtained evidence from a recruitment consultant showing that had the Claimant acted diligently in looking for a new job he or she would have found one quickly. This reflects the fact that even the most unfair dismissal won’t result in much compensation if the Claimant has or should have found another job quickly. In an appropriate case, therefore, there is no reason why you can’t serve such a witness statement on the other side. That said, it may be taken as an admission that you expect to lose so consider preparing such a statement and keeping it in reserve.
At some point a date of hearing is issued (parties generally have 7 days to object to a date). It is often provided with the standard ‘directions’ at the outset. If you are involved in a preliminary or directions hearing, at which it is likely that the Employment Judge will set a date for the main hearing, it is sensible to give the Judge a list of dates to avoid (because, for example, your witnesses are on holiday).
At this stage you have complied with the directions order, have a bundle, have exchanged witness statements, received the remedy statement (or ‘statement of loss’), have sufficient copies of the bundle and witness statements for the tribunal, possibly have your ‘Statement of Issues’ and you are ready for the hearing.
The final stage is the hearing itself. This note doesn’t deal with the hearing itself. There are a couple of points, however, that we can make. The first is the answer to the question ‘who goes first’ in an employment tribunal. The general rule is that the party with something to prove goes first. Therefore, in a dismissal case when the employer agrees that the ex-employee was dismissed the employer goes first because it has to prove that the dismissal was fair. In a constructive dismissal case, the ex-employee has to prove he or she was dismissed so they go first. In a discrimination case the ex-employee has to show sufficient facts from which a finding of discrimination could be made so they go first. It should also be noted that the party that goes first in Tribunal (gives their evidence first) gives the last speech. The second point is that the Employment Judge is referred to as ‘sir’ if male and ‘madam’ if female. We have heard them referred to by all sorts of names including ‘your honour’ but this is not appropriate – sir or madam is fine. The same titles should be used for the two ‘wing members’ sitting either side of the Employment Judge (if present).