Recently, the BBC spent £500,000 defending an unfair dismissal claim against its former chief technology officer, after being offered to settle the case for £50,000. The sum of almost £500,00 did not include damages paid to the claimant, which were reported to be nearly £80,000. Here, we look at the key things an Employer should consider before deciding to settle or defend an Employment Tribunal claim.
When facing a tribunal claim, an employer needs to understand the different influences on the situation they are facing. It is important to make sure that you make the right decision in each situation as there are no guarantees and there are costs involved, irrespective of the outcome.
There are counter considerations if you settle cases on a cost-saving basis, like employees who settle because it will save them money, but there also needs to be a balancing act between the benefits of defending the case, and the benefits of resolving the claim quickly.
Your Chances of Success
If you have all the documentation and information available about the claim, you should be able to assess the chances of fighting it successfully. If your chances are below 50%, it may be a good idea to consider settling.
Costs and Remedy
How much will it cost you to defend the claim and will defending the claim cost you more than just settling it? As well as your court costs, depending on the type of case, if you lose, you could be ordered to pay the claimant compensation and witness expenses they’ve paid.
Workplace Culture
The settlement could have an indirect impact on your business if it affects employee relations or causes an internal expectation. Employees could see a settlement as rewarding an ex-employee.
Indirect Message
If the claim is against the management team, a settlement of a claim may send a message that managers are not supported.
Publicity
Whether the publicity associated with going to tribunal could affect your business. However, depending on the claim, you may want to defend the claim to avoid setting a precedent.
Insurance
It is worth taking out Employer’s Dispute Insurance, which is not the same as Employers Liability Insurance! Most insurance covers will cover your legal costs associated with defending a claim. If you already have Employer’s Dispute Insurance in place, then speak to your insurers. We are pleased to be working with an external insurance company that provides a very comprehensive cover. For more details please contact us here.
Every case is different but to defend a claim as an employer, take all the factors above into consideration and keep the chances of success and settlement under review throughout the cycle of the claim.
We hope that you have found this post on The key things an Employer should consider before deciding to settle or defend an employment tribunal claim useful. If you’re an employer looking for advice when it comes to settlement agreements or an employment tribunal claim, please contact one of our employment lawyers today.
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