• dealt with over 900 collective actions (usually industrial action or collective redundancies);
• provided conciliation in over 85,000 employment tribunal actions – its highest ever number, and 13% more than in 2008/2009;
• received over 1 million calls to its helpline;
• dealt with over 10,000 “pre-claim” conciliations – this is where the Acas is asked by the parties to conciliate a claim before a tribunal action has been commenced.

In relation to the last figure, Acas claim that in over 70% of these cases tribunal proceedings were prevented. They quote a study which shows that getting to the stage where an ET3 is filed can already have cost a business £2,000, so the savings are substantial.

There seems to be no indication yet as to whether Acas will be facing significant cuts under the coalition’s spending plans, but it is well-placed to avoid these given it is an organisation that saves other people money. Acas chair Ed Sweeny is quoted as saying:

“We continue to deal first hand with the effects of recession and the immense strain it places on workplace relations. We are seeing signs of improvement with employers and unions taking a more pragmatic approach by working together, looking at ways to try and save jobs and avoid redundancy. This is in stark contrast to previous recessions.

Overall Acas provides excellent value – every pound of taxpayers’ money invested in it creates a return of up to £16.”

Indeed, there can be little doubt that this recession has been marked by that more “flexible” approach to reducing staff costs than the large-scale redundancy exercises of the past. Social and economic changes over the last two decades are the main contributors, but Acas has certainly had an important role to play in disseminating the alternatives to employers.

Read the Acas 2009/2010 annual report here:

http://www.acas.org.uk/index.aspx?articleid=1473

Costs were not awarded, due to a finding by the ET that the Claimant “did not act unreasonably” in bringing the claim. Lady Smith finds this conclusion perverse. This goes further than the recent line of cases – see my post last year on two authorities deprecating tribunals’ refusals to award costs against lying Claimants.

This case is rather fact sensitive, but will be grist to the mill for many Respondent representatives trying to recoup the cost of meritless or vexatious claims. Another important point comes from Lady Smith’s rejection of the notion that it is legitimate to bring a claim for unfair dismissal simply to obtain a finding that it was so – there is a declaratory power in discrimination legislation, but not in Part X of the Employment Rights Act 1996. Many many clients have told their lawyers in conference that “it’s not about the money, it’s the principle”, but this EAT judgment will strengthen that lawyer’s warning that courts and tribunals do not usually look at it that way.

By way of reminder, the charging of a contingency fee – where the amount charged by the representative is a percentage of the compensation recovered – had gained great popularity in the last few years. Costs are not normally payable by the losing party in the Employment Tribunal, so the DBA model provides one of the few funding options for the impecunious client. There are problems however, and for my discussion of the conflicting pressures on a DBA funded representative, and the background to the government’s decision to regulate them, see my previous post here.

The Damages-Based Agreements Regulations 2010 came into force in April. They provide for the formal requirements of DBAs, the information that must be provided and, importantly, a 35% cap on the percentage charged, including VAT.

As a former solicitor I still receive email notices of new Law Society practice notes – they are usually prosaic in the extreme, and I delete them, but this bulletin contains the following (controversial?) advice:

Tribunal proceedings are non-contentious business under the Solicitors Act 1974 (“the Solicitors Act”) and, so far as solicitors are concerned, a non-contentious business agreement compliant with Section 57(1) of the Solicitors Act could be used for Employment Tribunal matters.

A conditional fee agreement (as opposed to a DBA) would be enforceable and would not be caught by the Regulations. Such an arrangement might enable you to achieve a greater success fee than would be possible under the Regulations, and still avoid your client risking liability to you if the claim fails.

I don’t know if any solicitors have tried this. But the attitude of solicitor-practitioners shines through, and indeed the Law Society have called on the government to repeal the regulations, contending that the 35% cap will withdraw the possibility of representation from some needy claimants.

Read all, here.

EDIT:- Amazon have now, sadly, put the price up to £81.09 including delivery, which still represents a saving.

Requirements of the agreement

• The agreement must be in writing;
• The claim or proceedings must be identified;
• The maximum percentage of damages which can be specified as fees is 35% including VAT;
• The circumstances must be set out by which any amounts become payable as fees must be identified – this will include provisions, for example, as to whether the percentage includes counsel’s fees, and the circumstances in which other fees become payable. This might include where the client refuses reasonable offers of settlement, or the representative is forced by the client’s conduct to terminate the retainer.
• The agreement must state the reasons for setting the percentage recovery at that level – this may be a moot point, as many representative firms will apply a blanket 35%. This does provide an area where representatives can compete with one another.

In addition, the following information must be given in writing (this will usually form part of the client care letter:

• Everything stated above;
• How the client might seek a review of the costs, fees and expenses incurred, and the circumstances in which they can do so;
• The services provided by ACAS;
• Whether other methods of funding are available, such as legal aid (unlikely), legal expenses insurance, pro bono representation or trade union representation. A solicitor would normally be under a duty to explore funding methods with the client in any case. I would say anecdotally that the legal expenses insurance policies that many of us have as part of our home insurance are underused, many people never think to enquire if their employment claim will be covered.
• The regulations state that where the agreement is terminated, the representative can charge costs and expenses, but that the agreement may not be terminated:
• by the client – if liability has been admitted, settlement has been agreed, or it is less than seven days before the tribunal hearing;
• by the representative – at all, unless the client has behaved or is behaving unreasonably.

The former seems sensible, as it prevents a client taking advantage of an admission of liability, good settlement offer, or the preparation work undertaken for a tribunal if he realises that he will pay less if charged on an hourly basis rather than as a percentage.

The latter seems to contain a glaring omission, which is that the representative must surely be able to terminate the agreement if it is under a professional duty to do so. There are a range of circumstances in which the solicitor is under a duty to stop acting which would not be attributable to unreasonable behaviour (such as a conflict of interest which had gone undiscovered), and the contractual position that would result is now unclear. Could frustration be argued?

These regulations do not enable contingency fees to be charged in “contentious” proceedings, such as personal injury claims or, interestingly, the Employment Appeal Tribunal. Barristers are, of course, still prevented by their professional rules from charging a contingency fee on any type of work. This may change in the future.

The tribunal has found in her favour today, finding harrassment and failure to make reasonable adjustments. See the full circumstances of the caseat the link above. Miss Dean was awarded £7,800 for injury to feelings, £1,077.37 for loss of earnings, and £137.75 for (presumably) an unfair dismissal basic award.

Decisions such as this are almost run of the mill for A&F. The company has hit the headlines in the US for banishing a Dallas employee to the stockroom for scoring a zero in the the company’s “hierarchy of hotness”, and in 2004 it settled a class action lawsuit from ethnic minorities accusing it of discrimination in employment and in its marketing materials. The New York Times reported:

Eduardo Gonzalez, the lead plaintiff and a senior chemistry major at Stanford University, said that when he applied to an Abercrombie store in Santa Clara, Calif., managers urged him to apply for the overnight stocking crew. Noting that his application was rejected, he said that when a store manager interviewed him and 13 other applicants at once, the manager overwhelmingly favored the two white applicants.

…

In an unusual step, the settlement calls for Abercrombie to increase diversity not just in hiring and promotions, but also in its advertisements and catalogs, which have long featured models who were overwhelmingly white and who seemed to have stepped off the football field or out of fraternities or sororities. Plaintiffs’ lawyers said they insisted that the company agree to add more diversity to its marketing materials so as not to discourage minorities from applying for jobs.

Wondering about that today I visited Abercombie.com, and looked at the Picture Gallery. All ten models are white. The same goes for the images on the ‘Mens’, ‘Womens’ and ‘Jeans’. In fact, to find a single ethnic minority you have to head over to their Kids website, where both teenage models featured are of Asian origin. Given that the shots on the main site are all half-naked, and all sexually suggestive, and the teens are (understandably) head/shoulders fully clothed shots, you can’t help wonder at Abercrombie’s boldness at segregating their minorities into the ‘cute’ rather than ‘sexy’ categories. For more invective about this vile organisation see Charon QC’s post back in June. All one can really do is hope that this whole experience has served Riam Dean well in her quest to become a lawyer.

And just for fun, check out the Top 11 diversity photoshop disasters.

There are clearly advantages and disadvantages to using an organisation such as this. The benefit is that for a very small organisation HR compliance is achieved with virtually no allocation of staff by the employer, and as long as the business is smart enough to check its disciplinaries, grievances and dismissals with the helpline then they can rest assured any claims will be funded by the insurer. This is particularly attractive in a field like employment where largely meritless claims by employees against employers that have genuinely done nothing wrong can often proceed to a full tribunal hearing, and traditional hourly-billing by a solicitor can easily produce a five figure irrecoverable bill for costs.

But the disadvantage is that it reduces control by the employer. Some small employers simply want to be able to sack whoever they want and then pay a solicitor to perform some damage limitation afterwards. I have heard some employers, probably unfairly, claim that as the helpline is the gateway to the insurance policy, they ‘won’t let you sack anyone’. And, like any business agreement, the costs can sometimes be high and subject to automatic renewal and tie-in periods.

In this case, Peninsula had two claims brought against it, both of which were dealt with by the same Employment Judge. He was part-time, spending the rest of his time as a partner in a firm of solicitors who had recently posted an advertisement containing the following text:

Employers: Do you want to…

Deal with a local firm whom you can see and talk to at any time and avoid having the potential risk of dealing with untrained and unqualified ‘consultants’ or inexperienced and unqualified call centre ‘operatives’? Avoid expensive and lengthy tie ins of 3 or 5 years and pay only for the professional services that you actually utilise, avoiding subsidising others because you have to pay a large lump sum each year for services you may never use?

In finding against Peninsula in both their claims, the EJ professed rather unjudicial astonishment and castigation of Peninsula’s apparent failure to comply with employment law:

We remind ourselves that Peninsula holds itself as the biggest employment law consultancy in the country. For such an organisation to flagrantly breach employment legislation is, frankly, astonishing. … Put simply, Peninsula did not practice what they preach. …However, the claimants did have a legitimate expectation that Peninsula would comply with those standards of behaviour. This is all the more so where Peninsula hold themselves out as being an “Employer of Excellence”, (Peninsula having awarded themselves that accolade).

Of course, the appeal against the finding on the basis of apparent bias succeeded. We should remind ourselves of the basic test – “whether the fair-minded and informed observer, having considered the facts, would conclude that there was a real possibility that the tribunal was biased” – Magill v. Weeks [2001] UKHL 67. In addition:

If there were real ground for doubting the ability of the judge to ignore extraneous considerations, prejudices and predelictions and bring an objective judgment to bear on the issues before him, a real danger of bias may be thought to arise. … If in any case there is real ground for doubt, that doubt should be resolved in favour of recusal. (Locabail (UK) Ltd v Bayfield Properties Ltd & Anor [1999] EWCA Civ 3004).

If we put ourselves in the position of the fair-minded and informed observer, we can see that there is a real possibility that the EJ’s business prejudice against Peninsula and their ilk has infected his objectivity towards them.

It should also be noted that in the second of the cases under appeal the EAT found no prejudice due to the length of time that had elapsed, and given that the EJ was, by then, full time. Also, where a lay member in the latter case had (rightly) recused himself there was no inherent objection to the case continuing with the EJ alone and the other lay member, even though the case was part-heard and they had had the benefit of his observations.

Full judgment: Peninsula Business Services Ltd v Rees & Ors [2009] UKEAT 0333_08_2307 (23 July 2009)

It shows that the number 0f claims referred to them by the Employment Tribunals fell overall from 151,249 in 2007/2008 to 138,535 in 2008/2009 (that figure refers to claims to particular jurisdictions, rather than the number of ET1s). Six thousand less of these cases included the Equal Pay jurisdiction than last year, but the notes immediately quash any enthusiasm about that figure however:

Very few equal pay/sex discrimination cases brought against NHS employers are included in these figures because they have not been passed to Acas for conciliation by the Tribunals unless the parties have requested conciliation or there appears to be a reasonable prospect of success in conciliation. In addition, Acas received 49,675 cases for conciliation where no case had yet been submitted to an Employment Tribunal, but where one was likely to be if the matter was not resolved. The vast majority of these cases (47,290) related to potential claims against local authorities in regard to equal pay.

Notwithstanding that, Equal Pay claims still constitute a third of the primary claims behind issued proceedings in the tribunal. In 2007/2008 28,767 claims were referred containing a claim under working time regulations, but the following year this fell to a mere 17,844. Claims of unfair dismissal however rose from 43,241 to 55,000, apparently an exact figure. If anyone can provide some interpretation or reasoning behind those changes I’d be interested to hear it.

Another statistic is that Acas answered their national helpline 726,306 times throughout the year, and each one of those calls resulting in an answered query cost it £12.12. Of course, the recession didn’t really start to claim a significant number of jobs until the beginning of 2009, so one shudders to think at the volume 2009/2010 will bring if the economic downturn persists in causing redundancies throughout the year.

Acas’s Pre-Claim Conciliation service also launched in April 2009, where free conciliation is provided between employer and employee before proceedings are issued. It seems to have been a success, over half of conciliations being successful, and each of those saving everyone (both parties and the taxpayer) a total of around £1,000.

I’d be interested to hear your views on Acas at present, it’s been a couple of years since (as a solicitor) I was routinely on the phone to conciliators over claims, as a barrister I tend to pick up cases before conciliation starts or after it’s failed. I remember finding the service excellent mostly, but is it being stretched by volume and standards slipping? Let me know.

Link to Acas Annual Report & Accounts 2008/09

The BBC has lots of photographs, well seven anyway, whilst the Times reckons the building lacks the ‘wow’ factor. Personally, I like the new building, but would appreciate some better decisions than Malcolm being reached once the Justices are in residence.

H/T to the Property Law Blog

(i) the paying party has in bringing the proceedings, or he or his representative has in conducting the proceedings, acted vexatiously, abusively, disruptively or otherwise unreasonably; or

(ii) the bringing or conducting of the proceedings by the paying party has been misconceived.

The above basis is only the first stage however, and the tribunal then has a discretion on whether or not to order costs. Certainly if (ii) applies there will still be no costs order in the vast majority of cases. Whilst an employment lawyer might look at an ET1 and ET3 and immediately assess the chances of the claim succeeding as low, the Tribunal will always have in mind that the Tribunal is intended to be both a costs free environment in the majority of cases, and also that it should provide  a suitable forum for litigants in person to have their complaints heard.

Mathew is an exception, and a rare case of the EAT overturning a Tribunal’s decision not to order costs against a Claimant following an unsuccessful claim. Mrs Mathew, facing a disciplinary, made an allegation that her manager had called her a ‘black bitch’, and claimed race discrimination. The Tribunal found

“We looked at all the surrounding circumstances and the background to this case and preferred Miss Rankin’s evidence over Mrs Mathew’s evidence. If the claimant had been called “a black bitch” she would not have waited for nearly three weeks to raise the issue and done so only because it looked as though she herself might be taken through a disciplinary process. She raised the issue on 6 June 2007 when she was resigning. Such a phrase is so offensive it is incomprehensible that she would not have made her objection much sooner. Mrs Mathew had no explanation for the delay.”

It then went on to order no costs due to it believing the Claimant to have a ‘genuine’ belief in her claim. This reason has no logic to it – if the phrase wasn’t said then Mrs Mathew made it up and lied about it. Where the central thrust of a claim is based on a lie, the EAT decided it was perverse not to order costs. Expect this case to be waved around by both sides in costs applications, as the Tribunal (like many courts) tries to deftly judge one side to be the winner without calling the other side a big fibber.

Verma confirms that it is acceptable to order costs on an unsuccessful strike-out application by a Respondent, and furthermore describes as ‘perverse’ the first-instance decision to allow counsel’s fee at the hearing but not the solicitors’ costs in preparing for it. The Employment Judge seems to have based his decision on the basis that the work done prior to the hearing would have happened in any event, which is clearly wrong. I have to say that I have myself seen parts of costs allowed and others excluded arbitrarily, and this decision does at any rate require Employment Judges to apply some reasoning to the costs orders they make.