Is a tribunal claim worth defending as a business owner?

Hannah Strawbridge outlines key considerations for employers who are deciding whether or not to defend an employment tribunal cases

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Employment tribunal cases come in many forms, with business owners commonly facing claims from disgruntled employees for unfair dismissal, discrimination, whistle-blowing or breach of contract.

It’s not unusual for the business to feel the case is drifting on, fees are escalating, and there is a sense that the case is controlling them, rather than them being in control of the case. Sound familiar? Obviously this is stressful, but it doesn’t (and shouldn’t) have to be.

Questions to ask

There are three key questions your company’s lawyers should be asking you before they do any work at all on an employment tribunal case:

  1. Do you have any experience of dealing with tribunals?

  2. Do you want to defend the case?

  3. Do you have capacity and budget to work on the case and defend it? 

Your company’s lawyers should formulate a strategy document which should give you the high-level advice you need to reach the outcome you want. This should be no more than one to two pages. When considering whether or not to defend the case or settle, your company’s lawyers should be exploring with you:

  1. The likelihood of winning the case. If you are likely to lose the case, your company’s lawyers should be advising you to settle, as losing will result in compensation (which is capped in discrimination cases) to the employee as well as legal fees for your business. 

  2. The risk of losing the case. Even if you are advised that you are more likely than not to win, the outcome is never certain. You should also consider the character and psychology of the claimant (employee) and whether or not they want to settle or have their ‘day in court’.

  3. The cost of defending the case. A straightforward, unfair dismissal case may cost you £20,000 to defend. Even if you win the case, is that really a win for your business? 

  4. Employment tribunals are public forums. Whether or not you ultimately win the case, you need to consider whether potential media coverage is damaging to your business. If you do reach a settlement, your company’s lawyers should be including a confidentiality clause to mitigate this risk.

  5. The time involved for your employees working with your company’s lawyers on the case and serving as witnesses. Are you happy for your people to be doing this instead of focusing on running and growing your business?

If you decide you would like to try to settle the case, your company’s lawyers will need to be equipped with a good understanding of the case, the law involved, and the strengths and weaknesses of the case. 

To reach the lowest, quickest settlement (therefore saving the business cost and time) your company’s lawyers should be sharp negotiators. They should understand and have experience of the psychology behind negotiation. 

Conclusion

To evaluate whether your tribunal case is worth defending you should ask yourself those initial questions and discuss them with your company’s lawyers so they can prepare you with their strategy document. Once you have assessed the business risk and the ideal outcome for your business, you need to decide if you will try to reach a settlement or defend your case at tribunal. If you can’t reach a settlement at all, you may have to defend your case and need to choose a lawyer who knows how to get the best result for you.

Hannah Strawbridge is a partner and founder of Hanlaw