Tribunal Compensation Awards and Other Costs

The Employment Tribunal process is a long and often stressful one. Added to the time spent preparing for the hearing and the uncertainty about the outcome is the worry about the potential cost should the judgment go against the employer. Often, knowing the likely cost of an adverse judgment can inform their decision about how to respond to a claim and enable them to make plans in case things don’t go as they anticipated.

Figures in the latest Survey of Employment Tribunal Applications (SETA) compiled and released by the Department for Business, Energy and Industrial Strategy (BEIS) can provide a very useful guide to the likely amounts a tribunal will award in the event that a claim is successful. [Note that these figures refer to fees as part of the period to which they refer includes the months before fees were abolished by a Supreme Court decision.]

The size of awards

According to the combined samples of claimants and employers, the median sum of money awarded at tribunal (£5,000) was lower than the median amount that claimants initially hoped to receive at the start of their case (£7,000). In 42% of cases where claimants had been awarded a sum of money at tribunal, survey respondents said that the amount awarded included the reimbursement of any fees the claimant paid, while in 37%, it did not include this, and in 14% of these cases the respondents said that the claimant did not pay any fees. Among those who paid a fee and were awarded money at tribunal, 49% said the amount awarded included the reimbursement of any fees paid.

Responses varied significantly between the two parties about whether claimants received the payment of their award: 72% of claimants awarded a monetary payment said it had been paid compared with 93% of employers with a sum awarded against them who said they’d paid it.

Non-payment of awards

If claimants do not receive payment of their award from the employers, they can submit a Penalty Enforcement Form as part of the BEIS Employment Tribunal penalty scheme. This leads to employers receiving a notice from BEIS to pay the sum awarded by the tribunal or receive a fine.

Claimants took some form of action to obtain payment in 31% of cases where they were awarded a sum of money by the tribunal; 16% of those who did take action used the BEIS Employment Tribunal penalty scheme. If the claimant had not used the penalty scheme and did not take any other action to obtain the money, respondents were asked whether they were aware of the scheme before the interview. Around one in five claimants (18%) and 12% of employers said they were aware of the scheme.

Appeals

In around one in eight cases that went to a tribunal hearing (13%), an appeal was made to the Employment Appeal Tribunal about the decision made. Where an appeal was made, this was more likely to come from the claimant (78%) than the employer (22%).

Costs

Claimants were awarded costs in 26% of cases that involved a decision at tribunal, and employers in 6% of these cases.

Unreasonable pursuit

Employers were more likely than claimants to be aware that the employment tribunal could penalise cases of unreasonable pursuit (where a party to a claim is considered to have acted unreasonably in pursuing it) by making that party pay towards the other party’s costs or expenses: two thirds of employers said they were aware that unreasonable pursuit could be penalised, compared with only 54% of claimants.

Cost and benefits

Just over six in ten claimants reported that they had incurred personal financial costs as a result of the case.

Claimants may face several different types of cost:

• a third of claimants incurred communication costs. Among those that faced these costs, the median communication cost was £50;

• 36% incurred travel costs; among these claimants, the median travel cost was £60;

• 38% suffered a loss of earnings.

Days spent on the case

In terms of the time spent on the case, the median number of days spent by claimants was 14. Among employers, the median number of person days spent on the case was 8.75.

Changes made as a result of a claim

When given a list of changes and asked if they had made any of them as a result of their experience dealing with a claim, 69% of employers stated that this had prompted some actions. The most common action employers had taken was to ensure that existing procedures were followed (58%), followed by seeking professional advice prior to taking disciplinary action (29%).