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“If it ain’t bust …”

The Government wants to promote mediation for the resolution of employment disputes, bypassing Employment Tribunals and lawyers. You may be surprised that we would say “Amen, to that”, but a visit to the Employment Tribunal, just like a visit to any other court, is generally an expensive and unsettling experience, win, lose or draw. For most people, paying a lawyer to represent them in a Tribunal or in the courts is the ultimate “distress purchase”.

Mind you, the Government’s ambitions for Tribunal reform are motivated by more than pure altruism. There is the small issue of the £84 million which is the annual cost of running the Employment Tribunal service. In fact, that should probably be regarded by most people as representing pretty good value given that, at the current rate of 160,000 claims each year, that equates to an average cost per case of just £525. Come to think of it, the Government will enjoy revenue of that order if, as seems highly likely, it goes ahead with its promise to introduce a system of fees for commencing Employment Tribunal proceedings. More of that, on another occasion. . . . .

Quite apart from the threatened introduction of fees, the Government appears to be set on a course to force employers and employees to use mediation as an alternative to – or at least as a pre-condition to issuing – Employment Tribunal proceedings. So, obviously, that will be cheaper for everyone – the Government and employers/employees alike  ….. ? Perhaps not. Back in May 2010, the Ministry of Justice published the results of research which it had commissioned to evaluate the use of judicial mediation. Quite apart from the absence of any statistical evidence that the use of judicial mediation increased the number of cases settled, the survey suggested that the typical overhead cost of taking a case to mediation (in other words, the cost excluding any legal fees incurred by the parties) was around £900 per case – some 80% higher than the cost of running a case in the Employment Tribunal. Whilst the survey revealed that participants in mediation found the experience to be better than a trip to the Tribunal (which was hardly surprising given the inherent tension and stress which any formal court or tribunal process involves) there were no other tangible benefits to set against the increased cost.

“But wait!”, I hear you say, “In a mediation you don’t need a lawyer?”. That is correct; in the same way that it is correct to say that, in theory, you don’t need a lawyer to represent you in an Employment Tribunal. What most people still need, however, is assistance with facts and documents: guidance on sifting and sorting the relevant from the irrelevant. And what of the law? Just because a case goes to mediation does not mean to say that there is no law in it. Very few cases will turn simply on their facts. More commonly, there will be a dispute both as to facts and law.

“But”, you protest, “the point of mediation is not to get a ruling or decision but, instead, to lead the parties to their own settlement.” Quite right. But suppose a case turns partly on facts and partly on the law. In deciding whether or not to agree a settlement how is a party to mediation to assess the strength of his or her case on the law if there is no input from a lawyer?

We are all in favour of any process which provides a speedy and cost effective forum for the settlement of employment disputes – but is mediation the solution to the problem? Ah yes, the problem. Employment Tribunal claims are of course a mounting problem for employers and employees alike, are they not? Surprisingly, the answer to that question is “No”. The last figures available (for the quarter ending September 2011) show a 30% drop in claims when compared with the same period in 2009 and a fall of 35% when compared with the same period in 2008. So is the Government in danger of forcing upon us a more expensive, but no more effective, solution to a declining problem? Watch this space.

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Richard Parr

Partner
Employment Law
RParr@LawBlacks.com
0113 227 9246
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Richard Parr Blacks Solicitors LLP