Employment Tribunal and Legal Expenses Insurance
- AuthorReggie Lloyd
Employees who have been dismissed, discriminated against or who are in dispute with their employers may be able to make a claim in the Employment Tribunal.
Tribunals were first established in the 1960’s to provide a forum for employers and employees to resolve straightforward employment disputes without legal formality. Since then employment law has become technical and complex.
Employees making a claim
Employees can and do still run claims themselves, but most would benefit from specialist and experienced legal representation.
The main drawback to seeking legal help is the cost. For example, a straightforward unfair dismissal claim will probably be listed for a 2-day hearing and is likely to cost between £10,000-£12,000.
A complex discrimination or whistleblowing case may be listed for a 5-6 day hearing and is likely to cost £30,000-£40,000. These costs do not include VAT and deter most employees seeking legal advice on their claim. Employers are often aware of this along with the fact that the absence of advice can reduce the chances of a successful claim substantially.
What is Legal Expenses Insurance
Most employees have some sort of insurance policy, for example: home/contents, buildings, travel insurance, pet insurance and/or motor insurance. Legal Expenses Insurance (LEI) is provided as an add on to these policies and usually covers legal fees up to £50,000 or £100,000. This can cover the insurance holder as well as those within the household and is a valuable asset to the employee if litigation is looming.
Legal Expenses Insurers (to keep their costs down) often try to insist that the case must be handled by their “panel solicitors”. Panel solicitors take on “bulk work” at a reduced rate and often assign insurance cases to junior solicitors, newly qualified solicitors or paralegals to minimise the costs of pursuing these claims under the policy.
Employment claims are often complex and multi-faceted and junior fee earners find themselves out of their depth. Even if the case is handled by an experienced solicitor, that solicitor is likely to be handling so many “panel” cases that they cannot devote the appropriate time and care needed to prepare the case properly.
This means the insured’s chance of winning is reduced and consequently there are many complaints of poor service or lack of experience. However, policy holders have the right to choose their own lawyer under the Legal Expenses Insurance Regulations 1990.
Another common complaint about LEI insurers is that the claim is viewed not to have a reasonable prospect of success. “Reasonable prospects of success” does not mean the employee has to have a cast iron case or be a sure winner; it (only) means that the insured has to have a 51% chance of succeeding at tribunal.
We have acted for clients told by their panel solicitors that their case did not have reasonable prospects of success. A major part of the claim was overlooked as they had not met the client or taken further details. We challenged the “panel solicitors” assessment of prospects of success, and took the case under the policy and went on to win more than a year’s wages.
We have also acted against a person represented by a “panel” firm. We won the case and got a costs award mainly because their case had been inadequately prepared.
If you are an employee and a dispute is looming at work check all your insurance policies to see if you have LEI that covers employment disputes, if you have, remember you have the right to use a solicitor of your choice and get in touch with us.
Buying insurance or renewing your LEI insurance policies
If you are buying insurance or renewing your insurance policies check that the policy includes LEI. Remember, you get what you pay for and a reduced premium is likely to mean the amount of cover provided is lower and the cap applied to the rate they will pay your solicitor will be lower also.
Some providers will only pay a non-panel solicitor at a rate of £100 (trainee rate or paralegal rate) whereas others will pay a rate of £220-£250. It is much better to be represented by a suitably qualified solicitor if you are forced to litigate and the difference in premium is likely to be relatively speaking small.
Before you buy, check the policy details to see if any restrictions are imposed on your right to choose your solicitor, the amount of cover provided, the rate that will be paid to your chosen solicitor and which company provides the service on behalf of the insurance company.
If you have the benefit of legal expenses insurance and litigation is pending you should not have to pay any legal costs (except for any excess on the policy) and that will be one less thing to worry about. Do not be deterred from insisting on your right to instruct solicitors of your choice.
Please note Birkett Long cannot recommend Legal Expenses Insurance products or Legal Expenses Insurance providers. If you require advice on the types of Legal Expenses Insurance products available, please contact an insurance broker.
If you need any more information on this topic you can contact me via email@example.com or call me on 01206 217347.