Employment tribunals are expensive – and on the up, following the recent abolition of tribunal fees (see below). Given the plethora of no-win/no-fee solicitors, the cost to the employee is virtually nil. Whereas for the employer, costs are incurred from the outset – as well as a vast amount of management time.
Employment Practice Liability Insurance (EPL) can help with both the costs of defending an action and of compensation.
In 2013, the government introduced employment tribunal fees. These were intended to reduce the number of spurious or malevolent claims, following a rise in such cases which were harming businesses.
Tribunal fees reduced the number of cases brought against employers by almost 80% in three years.
This summer the Supreme Court ruled these fees to be unlawful, arguing that they impeded fair access to justice. The fees have been scrapped, and the government is having to repay £32m to claimants.
We expect the number of cases brought against employers to rise substantially - and possibly exceed the pre-2013 levels - as a result of the ruling.
This means employers are facing substantial increases in legal and compensation costs for such cases.
If you don't yet have cover in place, talk to us and we can arrange this for you. It's usually an extension to your Directors' and Officers' liability insurance.
If you already have EPL (Employment Practices Liability) insurance in place, then now is the time to review the limits on your policy, and ensure you have sufficient provision for legal and compensation costs.
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