Mediation is already quicker and cheaper than more traditional legal practices, and it could be about to become a far more practical solution for businesses across the UK.
A Supreme Court ruling that the imposition of fees for those bringing employment tribunal claims is unlawful is set to have an enormous impact on the number of claims, which could put some companies in severe financial danger.
The imposition of the fees led to a 79% reduction in claims over the last three years, but the ruling will no doubt result in an exponential rise in claims, which will result in increased costs and disruption for businesses.
The potential costs include meeting the claim and potentially, through the imposition of a revised fee regime, a requirement to pay a fee to defend a claim.
Not only does the decision have implications for future claims but there is a real potential for those who did not pursue previous claims, due to the level of fees involved. They will now seek to bring a claim out of time and try to argue that either it was not reasonably practicable to bring a claim within the requisite time period due to the cost of fees involved and/or that it would be just and equitable to extend the period of time for bringing a claim.
Costs awards in Employment Tribunals do not ‘follow the event’: a losing party will not automatically find themselves having to pay the other party’s costs of the litigation. However, the Tribunal has discretion to order costs where a party, or their representative, has acted “vexatiously, abusively, disruptively, or otherwise unreasonably” in the bringing or conducting of the proceedings, or the claim had “no reasonable prospect of success” (Rule 77 of the Employment Tribunals Rules of Procedure 2013).
It has been said that “business spends on average £4,000 on average to defend itself against a claim”.
However, figures published by the British Chambers of Commerce state that the average cost for an employer to defend themselves at a tribunal is £8,500. A press release from the Department for Business, Innovation and Skills (BIS) released earlier today stated that it had estimated that employers face average costs of £3,800 per case. This figure was drawn from its consultation document ‘Resolving workplace disputes’. This figure refers specifically to the cost of resolving a dispute through a claim to an employment tribunal.
Clearly the costs can vary immensely depending on the type of case and how the individual chooses to pursue it and methods of compromise, mediation and conciliation before a tribunal could all be factored into the cost to an employer of resolving a claim. One thing is for sure-the costs of defending a tribunal claim are wasted costs which are better avoided.
Offering mediation as an alternative will not only cut the time taken to achieve a result, but it will also be significantly more cost-effective for employers. Not only is it cheaper in the long term but less time is also lost preparing for and undertaking the full legal process, as mediation can be organised and settled within a week.
Mediation can also be offered before any employment is terminated, to avoid disputes escalating to tribunal.
While it has a success rate of between 80-90%, mediation also means the matter is kept confidential between parties and the outside world, meaning the effects on the business will be kept to the minimum.
ProMediate has a varied team of experienced mediators, who can assist you in resolving your dispute.