Approximately three weeks ago the Government announced that a consultation would be held later this year regarding three main areas of employment law, with the intention of “delivering growth by breaking down barriers, boosting opportunities and creating the right conditions for businesses to start up and thrive”. Putting aside the normative implications of such a strategy, one may say “fair enough”. However, although two areas that the consultation is supposed to target (TUPE and the collective consultation period) are relatively uncontroversial, the third (compensation in unlawful discrimination cases) seems – at best – ill thought-through and – at worst – politically manipulative.
The impetus behind the review of compensation in unlawful discrimination cases seems to stem from pressure from the CBI, which is riled because Claimants are apparently being “dazzled” by “multi-million pound awards” in City discrimination cases. This is inducing “vexatious” claims and diverting resources away from businesses and towards defending legal claims. Although these claims include a grain of truth in this author’s experience they are mainly false.
Firstly, the vast majority of litigants aren’t compelled to litigate because of pound signs but because they feel they’ve been subject to an injustice. The possibility of compensation as a remedy does have some attraction but it’s generally outweighed by the Claimant wanting to ensure that the ‘insult’ to them isn’t left unpunished. There have been a number of high-value claims progressing through the ET over the last couple of years but – if properly advised – a Claimant should understand that shouldn’t place too high a value on their claim and of the (potentially low) probability of success. In other words, good legal advice equals managed expectations.
Secondly, the idea that there are a large amount of “vexatious claims” being churned through the Employment Tribunal is nonsense. If one defines “vexatious” with reference to the Employment Tribunal (Constitution and Rules of Procedure) Regulations 2004 and the subsequent case law that has developed then a very high bar is set for a claim to be defined as such. The litigation generally either has to be based on utterly false grounds or pursued in a wholly vindictive or negligent manner. If a Claimant is advised by a suitably qualified representative and it is clear that their claim is vexatious then the adviser will generally tell them so. To refrain from doing is financially suicidal on the adviser’s behalf and potentially negligent. Weak cases will therefore be filtered out through a system of checks and balances that exists within the legal profession itself. It’s true that the cost implications for a representative pursuing a failed claim in the Employment Tribunal is minimal compared to a failed claim in the normal Court system but this is counter-balanced by the fact that if solicitors want to make a profit then they’re not going to pursue unprofitable claims. Indeed, unless the claim has a high probability of success then the Claimant is likely to be turned away. If a Claimant is unrepresented then there is a greater probability of a vexatious claim proceeding to the Employment Tribunal. However, claims such as these will normally be caught and struck out by the Employment Tribunal at a PHR or through case management.
Having looked at the CBI’s claims, it’s now appropriate to address the Government’s consultation. The first thing to note here is that the Government seems to be rehashing old ground in their consideration of reintroducing a cap for unlawful discrimination. The Conservative government was given a good slapping in the Marshall v Southampton and South-West Hampshire Area Health Authority (No.2) and told that the cap existing at the time infringed Article 6 of the Equal Treatment Directive. The Government Legal Service lawyers will be aware of this and so therefore will the Government. Why, then, is a policy consultation which clearly runs contrary to existing EU law being considered? From this author’s perspective the motive seems to be primarily political – this kind of issue is a convenient political football for the Government to kick about and then, when the moment’s right, quietly retract.
P.S. An extremely good analysis of the situation can be found on Mrs. Markleham’s blog