The Supreme Court has made a landmark ruling over employees’ access to justice, stating that tribunal fees are now unlawful. The ruling will (probably) have a significant impact on insurance premiums for businesses experiencing employment disputes with employees, says Bryan Banbury, Managing Director at Nottingham’s largest independent insurance broker, Russell Scanlan.
The number of insurance claims emanating from employment disputes has dropped in recent years, along with the premiums and excesses. However, following the Supreme Court’s recent ruling to ban tribunal fees, premiums are likely to increase along with the excesses. For clients without cover, our advice is that now, more than ever, is the time to take it out.
Tribunal fees were introduced in July 2013 by a fees order made by the then Lord Chancellor Chris Grayling. They started at around £160, and increased to between £230 and £950 for further hearings. For certain claims, claimants had to pay up to £1,200.
Following the landmark ruling over employees’ access to justice in which these fees were ruled unlawful, we expect there will be a sharp influx in the number of tribunals in the short term – which means businesses’ HR departments, particularly within larger organisations, need to be prepared.
We expect employer clients could face greater difficulty in reaching an early conciliation settlement, given employees will now have less of a deterrent to commence employment tribunal proceedings. Having the right insurance policy in place is therefore vital, especially now that the number of cases being brought to a tribunal could spike in a short space of time.
Moreover, the expected influx of tribunal cases is likely to clog up the courts, meaning cases could take up to 12 months to reach a hearing – with the process becoming far more drawn out than in previous years. Having the appropriate insurance in place for tribunals will help to ease the stress of these potentially long and stressful situations.
If you would like to arrange a formal or informal discussion about your business insurance policy following this landmark ruling from the Supreme Court in relation to how it could affect your business, please get in touch with one of our team who would be very happy to discuss your needs.
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