Funding & Costs – Claimants
How do I fund a claim?
There are several options for funding, aside from your own pocket:
- Trade union or professional association;
- Legal Expenses Insurance; and
- No win no fee agreements.
Trade union or professional association
Whether this is available will depend on the union/association and the terms of your membership. You should contact your trade union or professional association directly for assistance with this. At Your Employment Barrister, we are used to dealing with trade union and professional associations.
Legal Expenses Insurance
This can come as an inexpensive add-on to motor insurance or domestic household insurance, and usually covers at least £25,000 of expenses. If you have such insurance it strengthens your hand in settlement negotiations enormously: the employer knows that you will not be paying costs whereas it will be paying out on costs even if it wins.
Legal Expenses Insurance does have its problems however, and one of the things we aim to do is show you a route through those problems. The main one is that in order to save costs, the insurer tries to get the Claimant to use its “panel firm”, a firm or firms it has approved to carry out insured work.
Like many of our clients, you may dislike being told which lawyer to use. You may perhaps feel the panel firm is rather more concerned with keeping the insurers costs down, than winning the case.
However, it is unlawful for the insurer to restrict the insured’s choice of legal representative under the Legal Expenses Insurers Regulations 1972 and we are experts at negotiating with the insurance company to make sure your right to choose is respected.
Your right to choose your lawyer only kicks in when your claim has been started (when you have “issued your ET1”). The question is, therefore, how to fund the significant work that may be needed doing before you issue your claim, since the insurer won’t pay for it to be done by the lawyer of your choice. One possibility is to pay us to do the work for you – it may cost £2,000-£3,000. Another is to agree some form of Conditional Fee Agreement for this period. What is for certain is that if you engage a panel representative s/he will be reluctant to say you can go to your own lawyer after you have issued your claim, on the basis that this will cause any work done by the Panel Firm to be wasted.
Another tactic adopted by legal expenses insurers is to pay their own panel firms very little and then offer a similarly low rate to the insured’s own choice of representative with the aim of putting him or her off. We keep ourselves abreast of all the recent developments to ensure we are in the best position to negotiate for our clients.
One way in which we address this is by agreeing to be paid the basic fees offer by the insurer, but topping them up with an additional payment conditional upon success.
No win no fee arrangements
These are arrangements by which you agree with the barrister that you will pay him or her if you are successful at trial.
These are obviously very attractive for you as the Claimant, but there are dangers to lawyers as even the strongest case can turn into a weak one as the litigation progresses. Therefore before such an agreement will be entered into, the barrister will need to do a thorough evaluation of the merits of your claim. At Your Employment Barrister, we are willing to take on cases on a no win no fee basis if the case is strong enough.
There are two forms of no win no fee arrangements:
- Conditional fee agreement whereby you agree to pay the lawyer’s fees if you are successful. This is often accompanied by a percentage uplift on this amount to compensate the lawyer for the risk they have taken in conducting your case. This can be problematic if the damages you receive are low, but the fees are high by comparison. If you owe your lawyer his or her fees because you are successful, you may have little money left from your damages after paying what you owe.
- Damage based agreement whereby you agree to pay the lawyer a percentage of the money you receive if you are successful. This means that the amount you have to pay the lawyer is directly correlated to how much you receive in damages.
At Your Employment Barrister, we are willing to consider these types of agreements for the right case. Further, we are experienced in offering combinations of funding arrangements. For example, we may ask you to pay an initial fee with a no win no fee arrangement coming in later. Any fees to be paid will be fixed from the outset and we will ensure that you know when they will be due. We will always discuss this with you to establish what you can afford to contribute to your case.
Do I have to pay the Tribunal anything?
Yes – the ET introduced fees for bringing a claim and for proceeding to a hearing in 2013.
The fee you pay is determined by the type of case you wish to bring:
- For straight forward cases (non-payment of wages, redundancy payments, payment in lieu of notice), the fee is £160.
- For complex cases (unfair dismissal, discrimination, whistleblowing), the fee is £250.
This is just the fee to submit you Claim Form to the Tribunal. This must be paid when you post your Claim Form or when you submit it online.
You then have to pay another fee if your case proceeds to a hearing:
- For straight forward cases, the fee is £230.
- For complex cases, the fee is £950.
You will be advised by the Tribunal when you need to pay this fee.
The idea of these fees is to discourage Claimants from bringing a claim – but the fees should not put you off making a claim as you may be entitled to a fee remissions. We know how to help our clients benefit to the full from these rules. In addition, it may be that these fees are covered by Legal Expenses Insurance, in which case there impact will be minimal.
Will I have to pay for my employer’s costs if I lose?
The basic rule in employment tribunal litigation is that each side bears its own costs. This means that in most situations you will not pay the employer’s costs if you lose. However, though the Employment Tribunal (ET) was originally intended as a user friendly informal body in which people could represent themselves, the reality has proved very different. It is one of the aims of Your Employment Barrister to buck this particular trend by, for example, enabling you to handle a lot of the process for yourself.
Nevertheless, in many cases considerable legal assistance will be necessary and is not cheap. If we did all the work for you, a two day trial might cost in total £12,000, though that is considerably less that you would be charged by many solicitors.
The Tribunal does have a power to order either party to pay the other’s costs, but it is very rarely exercised: in 2011-2012, there were 186,000 claims and only about 1,400 cost orders.
The power to award costs power is exercised on one of two grounds, namely:
- That a party or its representative has conducted the case in an unreasonable way; or
- That a party brought a case which had no reasonable prospect of success.
The most likely scenario for an award of costs is if one party breaches one of the Tribunal’s orders, or causes a hearing to be postponed. If the Tribunal does make a costs order, it can order you to pay up to £20,000. However in 2011-2012, the average award was only £1,292.
Respondents may make an offer to settle your claim indicating, that if you do not accept it and win less money at the Tribunal, they will ask the Tribunal to make you pay their costs. However, failure to accept a settlement offer will not in itself trigger a costs order.
One common tactic by Respondents is to seek a “Deposit Order” at a preliminary hearing. The Tribunal can only make this order if your case has little real prospect of success. If that is its view, it can order you to pay up to £1,000 to the Tribunal on the basis that you may be ordered to pay costs after the full hearing because your case is weak. Many Claimants simply can’t make the payment so the case effectively comes to an end. If you are faced with an application for a deposit, you need good advice as to the merits of your claim and assistance in resisting the application if the advice is that your claim is a good one.
While it is in many respects a good thing for you that costs orders are very rare, it too has a downside. Suppose you have a claim for lost earnings of £15,000 but the cost of three day hearing will be £12,000, in that situation it becomes uneconomic to take the case to trial unless your claim is certain to win. At Your Employment barrister we are experts at evaluating such claims and can advise you on the prospects of success of your case to enable you to make an informed decision.
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