Monday 1st April 2013 at 4:40pm
Cuts to Legal Aid in employment law: sadly not an April fool’s day story
The most important change to employment law which takes effect from today is the one which has had the least coverage – the near-abolition of legal aid in employment cases.
The reason it has had so little coverage is that most lawyers who practise in employment law (and whose practices are viable) have a majority Respondent business – they chiefly represent employers. There is very little reason for an employer to ask whether the person suing them is being represented pro bono, on a win no fee agreement, by a trade union, or on legal aid. Moreover, the sorts of clients who are most likely to be on legal aid – unemployed workers, without union representation, and with low-value claims, generate the sorts of cases that are least likely to end up taking a lengthy amount of court time or appearing in legal reports, etc.
The rule change is as follows: until today, it was (theoretically) possible to get “legal help” (ie assistance with drafting documents, etc, but not “representation”) in almost every category of employment tribunal claim. Representation was availablle for appeals to the EAT and higher courts.
As of today, legal help remains available, but only for discrimination claims (ie claims under the Equality Act – not, for example, union discrimination cases) and for traficking cases (of which there are very few in the system indeed).
On appeal, representation remains theoretically available.
The government estimates that the cut in legal aid in employment law will reduce its total spend on this category of case by around 76%. There will of course be knock-on effects elsewhere. No-one especially believes that workers, unable to get legal help with wages claims, will stop bringing them. Instead they will be heard by a judge, with the claimant unrepresented.
The recent words of Sir Alan Ward in Wright v Michael Wright Supplies Ltd & Anor [2013] EWCA Civ 234, reflecting the exasperation of one previously important voice in the legal system, ie the senior judiciary, in response to the rule change:
“What I find so depressing is that the case highlights the difficulties increasingly encountered by the judiciary at all levels when dealing with litigants in person. Two problems in particular are revealed. The first is how to bring order to the chaos which litigants in person invariably – and wholly understandably – manage to create in putting forward their claims and defences. Judges should not have to micro-manage cases, coaxing and cajoling the parties to focus on the issues that need to be resolved. Judge Thornton did a brilliant job in that regard yet, as this case shows, that can be disproportionately time-consuming. It may be saving the Legal Services Commission which no longer offers legal aid for this kind of litigation but saving expenditure in one public department in this instance simply increases it in the courts. The expense of three judges of the Court of Appeal dealing with this kind of appeal is enormous. The consequences by way of delay of other appeals which need to be heard are unquantifiable. The appeal would certainly never have occurred if the litigants had been represented. With more and more self-represented litigants, this problem is not going to go away. We may have to accept that we live in austere times, but as I come to the end of eighteen years service in this court, I shall not refrain from expressing my conviction that justice will be ill served indeed by this emasculation of legal aid.”
More details about how legal aid is changing here here.
Realistically, it is likely that very few solicitors indeed will continue to offer employment law on legal aid; the key difficulty will be finding a solicitor who can act for you in cases of this sort.
Also changing this month are the rules on:
Redundancy: Where 100 or more employees are involved, the minimum period for collective redundancy consultation is reduced from 90 days to at least 45 days before the first dismissal occurs.
SSP, SMP, etc: The weekly rate of statutory sick pay increases from £85.85 to £86.70. The weekly rate of statutory maternity, paternity and adoption pay increase from £135.45 to £136.78.
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Tuesday 10th April 2012 at 9:20pm
Costs orders; increased, with worse possibly to come
A number of changes to employment law take effect this month:
the weekly rate of statutory maternity, paternity and adoption pay increases from £128.73 to £135.45;
the maximum deposit orders that a Tribunal can make increase from £500 to £1000;
the maximum costs orders also increase from £10,000 to £20,000;
section 147 of the Equality Act 2010 is amended to confirm that an employee’s representative can be an “independent adviser” for the purpose of a compromise agreement;
the Employment Tribunal rules are amended so that witness statements will ordinarily be read;
the default position will be that unfair dismissal cases will be heard by a single Judge rather than a full panel; and
for new employees taken on after this date, the qualification period for unfair dismissal increases to two years.
I’ve posted about the most important of these changes before; the amendment to s147 is a pure tidying up amendment, and the new trule that statements should not ordinarily be read reflects what was fast becoming the ordinary practice of the Tribunal in any event.
I do want to say more though about costs.
One unacknowledged scandal of settlement proceedings is the pressure put on Respondents by their own solicitors’ fees, some of which are astronomical. Companies overpay for legal advice because of ignorance (they do not shop around for legal advice) and because senior managers put a high premium on the protection of their own reputations. While the going rate for respondent representatives is around £150-£300 per hour, it is not unheard of for respondent lawyers to charge £1000 per hour. Every experienced claimant representative will have been in many cases where the other side was billing ten to fifteen times as much for the case as they were.
Exorbitant fees charged by respondent solicitors are a significant cause of the very considerable contempt that employers in general have for the Tribunal. As a claimant representative, I’ve been in cases where I put in more than 100 hours onbehalf of my client, just using the figures I’ve given above you can understand why Respondents are unhapy about having to pay legal fees which (in a complex case requiring 100 hours work) might be anything from £15,000 to £100,000.
The Coalition’s solution is both simple and malicious: it is to shift the burden (not immediately, but incrementally) from Respondents to Claimants.
The first step in this is to increase the maximum costs award that a Tribunal can order, from £10,000 to £20,000.
A further proposal which the Coalition played with in its consultation, but has temporarily withdrawn, was to introduce something like the “Part 36″ system we have in civil litiation, where if a party offers to pay the other side something of the value of their claim, and the winning party fails to beat this offer, the winning party pays the losing party’s legal costs.
The following scenario is relatively typical in civil litigation: car 1 maliciously smashes into car 2, doing damage which a court will (eventually) assess as worth £10,000. Before the hearing, car driver 1 accepts he was at fault and offers £6,000; car driver 2 rejects the offer and asks for £20,000. Car driver 1 fights the case, incurring legal costs of £30,000. At the hearing, car driver 2 “wins” on damages (i.e. is owed £10,000) but car driver 1′s offer is closest, therefore he “wins” on costs. The result: the driver whose car was maliciously damaged leaves the case with a net £20,000 loss.
The reason the government backed off introducing part 36 offers is that the system is grotesquely open to abuse – particularly in employment law, which in the majority of cases pits a company with nearly-bottomless pockets against an unemployed claimant. IE the costs threats bears down with wholly unequal weight on the two sides.
Represented respondents already make offers which look like Part 36 offers, to unrepresented claimants, as a matter of course. “Lose your case”, the claimant is told, in effect, “and you will lose your car and your home.”
But they rarely bother with represented claimants who well know the degree of bluster presently involved.
Pure embarrasment stayed the Coalition’s hand this time round, but if the present government remains in power for many more years, undoubtedly they will go over to something like the Part 36 system.
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Saturday 25th February 2012 at 10:16am
The Underhill Review of the Employment Tribunal Rules
In November of last year, the government announced that it was asking Mr Justice Underhill, the outgoing President of the Employment Appeal Tribunal, to lead a Fundamental Review of the Rules of Procedure for Employment Tribunals.
The emphasis on that document was on the need for simplicity. Underhill was being asked to produced “a streamlined procedural code”, so that “where claims are brought to an employment tribunal, all users’ experiences will be improved”.
Further suggestions about what might be in the new Code were set out in the terms of reference, which set out that the purpose of the review was to enable “robust case management powers” to “be applied flexibly, effectively and (insofar as is practicable) consistently in individual cases.”
Claimant representatives have a great deal of experience of “robust case management powers”, much of it negative, and will be watching carefully to see that the Underhill reforms do not lead to the generalisation of some Judges’ present habit of putting pressure on claimants to withdraw the majority of their claims without a hearing.
The other key passage of the terms of reference reads as follows, “Mr Justice Underhill’s attention is also drawn to an overarching policy consideration of Ministers, namely to develop insofar as is practicable a procedural code that facilitates interlocutory powers (as and where appropriate) being exercised by legal officers, as well as by Employment Judges and Tribunals.”
As for the the greater use of “legal officers” this should not be objectionable, so long as there are going to be clear guidelines (presumably, somewhere in the new Rules) as to what sort of case would be passed down in this way, and so long as the fully qualified Judges retained the power of review of case management decisions taken at this level.
Ministers have invited Mr Justice Underhill to assemble a small Working Group and a broader Expert User Group to advise on the eventual Code.
The government’s proposal is that the new Code should be available as soon as April; it will be interesting to see what results.
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