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Employment dispute costs are massively inflated, says specialist lawyer

01 December 2006

PRESS RELEASE

An employment law specialist says she is shocked by research findings announced recently by the Centre for Effective Dispute Resolution (CEDR) stating that businesses are spending £277,000 in management time and fees on a typical employment dispute.

Jo Davis, head of the employment department at regional law firm B P Collins, claims that an average case handled by her team of employment specialists, should it proceed to a full hearing, would result in legal costs of between £15-20,000 not the £205,000 suggested by the CEDR research.

"Granted, occasionally in a complex dispute the costs can reach six figures, but these amounts for a typical dispute are staggering," says Jo, "especially when you compare them with the average compensation award for unfair dismissal of £8,700, as reported by the Employment Tribunals Service (ETS) for 2005-06. Even in race discrimination cases, which often produce the highest awards, the average of £30,400 was still low in comparison with the average tribunal costs shown in CEDR's research."

The CEDR research also coincides with an announcement on 7 December by trade and industry secretary Alistair Darling that the work dispute system is to be the subject of a "root and branch review". This was prompted by figures produced by the ETS, again in its 2005-06 report, showing that the number of tribunal cases had risen to just over 115,000, an increase of a third on the previous year.

The Government estimated that the new workplace disciplinary and grievance procedures introduced in October 2004 would reduce the number of cases reaching tribunal by around 35,000, as more would be settled internally through mediation.

Comments Jo Davis: "The ETS' figures show that workplace mediation isn't working. Indeed, it perhaps adds an incentive for employees to take proceedings as employers face a possible uplift in damages of 50% if they fail to comply with the rules. Also, although the involvement of ACAS (Arbitration and Conciliation Service) can be effective in bringing about a settlement post-termination, the shortened period in which they can now be called on to help has not, in our experience, lead to early settlements, as the Government had hoped."

She adds: "Employers don't need to pay such exorbitant fees. At B P Collins we have a dedicated team of seven highly skilled employment specialists who are more than capable of handling such disputes, and you don't need to use a City firm. There is choice for organisations who want both expert advice and value-for-money."

ENDS

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Samantha Howe
Marketing Department
samantha.howe@bpcollins.co.uk