I remember Collidge -v- Freeport plc [2008] EWCA Civ 485 when it was at first instance, dealing as it does with the very common clause found in compromise agreements that:
“Subject to and conditional upon the terms set out below, [Freeport] will pay to you the sum of £445,680 gross as compensation in respect of the termination of your employment…
“You warrant as a strict condition of this agreement that as at the date hereof… there are no circumstances of which you are aware or of which you ought reasonably to be aware which would constitute a repudiatory breach on your part of your contract of employment which would entitle or have entitled the company to terminate your employment without notice”.
… in other words that subject to the warranty being true, we’ll pay you lots of money. The warranty was not true. Collidge had done bags of things which would have entitled Freeport to summarily dismiss him.
The judgment confirms that in this agreement, the warranty was a condition precedent. In other words, all performance by Freeport of its obligations under the agreement was subject to the warranty - rather than it simply having a remedy of damages for its breach. Compromise agreements are tricky - they have to be very tightly drafted according to the individual circumstances, but increasingly are simply run off as precedents. Given that the context in which the agreement was signed, Collidge may well have thought that he was protected from subsequent discoveries of impropriety, so this case emphasises both the quality draftmanship required on compromise agreements as well as the thoroughness with which the employee’s solicitors must advise.
The Law21 blog entry on marketing has again inspired me to rant on the future of the legal profession.
‘Your solicitor, qualified to answer’ is a major national advertising and PR campaign to promote solicitors to the public.
Our aim is to encourage consumers to use solicitors by promoting their services and highlighting the unique selling points solicitors have to offer. Running from April to June, the campaign will focus on the reasons why solicitors are the only sensible choice for consumers. They are:
- more expert and reliable than other providers of legal or quasi-legal services
- properly regulated
- excellent value for money
… or so say the Law Society in their recent marketing campaign to raise the ‘brand’ of solicitors. I’d edit the list as follows:
- more expert and reliable than [many] other providers of legal or quasi-legal services [but are increasingly inferior to some]
- properly regulated [and insured for when they fail to be more expert and reliable than the other side]
- excellent value for money.
I don’t want to be confrontational; there are solicitors firms out there that do all the Law Society says, but they are the minority. Use a solicitor ten times over rather than some internet cowboys, but the badge of ’solicitor’ itself is no guarantee of quality. Solicitors should be the cornerstone of reliability and expertise, but firms must make some real changes. Taking the Law Society’s list:
- Expertise: I started off a solicitor in a high street firm which did a good amount of employment law for the firm’s size. I moved from there to a consultancy / insurance company you’ve never heard of, which in respect of its consultancy at least is completely unregulated. The quality at the latter was ten times better - the expertise and dedication to employment law was enormous. I’m not saying the law firm wasn’t competent - it was that and more - but it didn’t have the same excellence. I attribute the excellence at the consultancy to the commercial pressure of competition. If you’re Bloggs & Co Solicitors then you immediately have a badge stuck to your chest, and the public will reckon you the best man for the job because of it. If you’re Bloggs Limited and you want to succeed, you’d better make a name for yourself, get out there and network, and deliver on your commitments.
- Regulation: Boy do you need that. I wouldn’t for a second disagree. When you provide legal services you play with people’s lives, and they need a fundamental reassurance that there is a legal framework for them to seek redress when you cock it up. What’s wrong with the system is the regulator itself - the SRA. Its huge, monolithic, inefficient, and worst of all its one-size-fits-all style of regulation prevents firms from competing effectively. You also need compulsory insurance for professional negligence, and most other professionals would do a double take at the premiums solicitors have to pay.
- Excellent value for money: Where solicitors lack at the moment is in charging innovation, as the Law21 blog notes every couple of weeks or so, and as I’ve rambled about previously.
This is all terribly sad, as it commercialises the role of solicitor which in previous days wasn’t simply a job, but a vocation. But solicitors haven’t changed for the worst, they’ve simply been outpaced by modern society. They must adapt and they must survive. The Law Society campaign is completely backwards - it tries to educate people that solicitors are the answer to their problems when this message is becoming less and less true every day. Their time and resources would be much better spent in engaging with their own profession on how to rescue the brand of ’solicitor’ and invest it with some meaning in the modern age.
My earlier assurances that my blogging wouldn’t be interrupted by work have been shown to be completely hollow - over two weeks have passed since my last post.
And it’s not even as if there’s been nothing to report. Favourite case recently must be Kuzel v Roche Products Ltd which talks of the burden of proof in Unfair Dismissal cases. Generally in law the person advancing a case, eg you saying that your neighbour cut down your hedge, the state saying you murdered him in retaliation, has the burden of proving the allegation. Not so in unfair dismissal. S.98(1) ERA 1996 moves the burden on to the employer. So if I say “you sacked me for an absolutely bloody stupid reason” then my employer doesn’t have to disprove my version of events to oppose the claim, they have to come up with their own valid reason for my dismissal and prove that. The reasons I advanced don’t really come into it.
In this case however the employee had advanced whistleblowing (protected disclosure) as the reason for her dismissal. It’s obvious why she would make sure she did this if she thought she might have a shout - whistleblowing claims aren’t subject to the financial limits of normal unfair dismissal and include an award for injury to feelings. The employer ran some taking-the-piss SOSR defence about the relationship having broken down. The tribunal stuck two fingers up at everyone by finding that dismissal was for a third reason, against the pleadings of both parties. The consequence for the simple unfair dismissal claim is obvious - it succeeds as the potentially fair reason advanced by the employer was not found to be proved. The odd consequence is for the whistleblowing claim - where does the burden of proof lie? Traditionally it should be at the employee’s door, it’s her case and her allegations. The statute is largely silent on the issue, the reversal of the burden of proof only seeming to explicitly apply to the reason actually advanced by the employer to be the reason for the dismissal. Well for once we’ve some useful guidance, produced by the EAT and approved by the Court of Appeal:
- Has the employee shown that there is a real issue as to whether the reason put forward by the respondent was not the true reason?
- If so, has the employer proved his reason for dismissal? Failure to do so will render the dismissal unfair, and then coupled with a primia facie case from the employer will entitle the tribuanl to infer that the employee’s stated reasons are correct.
- Has the employer disproved the reasons advanced by the employee? Even if the employer has failed to prove it’s own reason for the dismissal it may still have disproved that of the employee.
- If not, dismissal is for the reasons stated by the employee. It is not however, at any stagae, for the employee to prove her reason.
I’ve mucked around with the above to apply generally.
The Court of Appeal seem to have taken the line that this case is one for minority interest, stating that it shows how worked up lawyers can get about something like the burden of proof. I agree, but not with their observation that this sort of case will be rare. Protected disclosures are often presented in conjunction with a general claim for unfair dismissal, and its similarity to a discrimination claim may well mean that the facts coincide with the parties having fallen out generally. The unfair dismissal might well then often succeed without the whistleblowing. The same can be said about maternity-related dismissals.
The Law21 blog, and this post in particular, should be compulsory reading for any member of the British legal profession. The focus on new provision of legal services tends to concentrate on work for individuals - divorces, probate, and so on. In employment law circles however the change is already happening. First Assist, Peninsula, Croner Consulting, EEF and the rest are hardly household names but between them conduct a huge part of Respondents’ litigation in the tribunals.
Many employers simply want to pay an annual premium and be insured against any claims they receive. Any large employer, even if it is well behaved, will receive a claim one day, and fewer and fewer of these are farmed out to traditional law firms and counsel. If you are a commercial company who has sold an insurance policy then it makes much more financial sense to hire staff yourselves to conduct litigation and advocacy than to farm it out. Why? Because you retain the profit margin. Without any SRA or Bar Council regulation you can also be ultra-competitive in your hourly rates which means you achieve a better loss ratio for the insurance company.
Counsel still have their place for complex cases, or for where you simply must have a bum sat on a tribunal seat somewhere far away at very short notice, but as the Law21 blog notes: traditional law firms must forge alliances with the larger providers if they are to retain the work.
Employment is ahead of the game as tribunals don’t require a special right of audience, and (insured) work can therefore be undertaken by companies without any form of regulation at all. Once Alternative Business Structures and “soft-touch” regulation comes then all manner of commercial legal areas will go the same way, and it’ll be sink or swim for law firms and lawyers. Being legally qualified will be no guarantee of a place in the new order.
One of my favourite ever dirty lawyer tricks involved the three month tribunal deadline for unfair dismissal. Employees are expected to appeal their dismissal, and if they don’t they can expect their compensation to be reduced at the tribunal. In recognition that this can take some time, if the appeal process is still ongoing at the time the three months expire then the limitation period is automatically extended for a further three months.
My advice to employers was obvious - if you’re about ten weeks into an appeal process anyway (which happens far more often than it should), hang on a bit and make sure they get the appeal outcome a day or two before the three months expire. Bingo! The employee doesn’t dare bring the claim before the appeal outcome, because of my oft-repeated dire warnings about compensation being reduced, and the limitation period isn’t extended because the disciplinary process was complete by the time the three months ran out. The result? The employee has a one day window to fully digest the appeal outcome letter, fill in his tribunal form and get it to the tribunal.
Don’t judge me too harshly. I always knew that if they put the claim in late they’d probably get it accepted anyway, on the basis it wasn’t “reasonably practicable” to get it in before. The fact that my letters suggesting the opposite may have made the odd one give up his claim - is it really my fault? Really?
Of course it was. But that was my job.
Telling an employee the same thing now would be naughty practice, as only now (a full three years after the rules came in) is there authority to say the claim will be accepted in this situation.
The rule of thumb is that an employee gets three months to bring a tribunal claim. This can be extended in a convoluted variety of ways, but generally you’re mad not to at least bung in a form during this period. Get sacked on the 2nd December, you’ve got until midnight on the 1st March to get your claim to the tribunal offices. I know that I’ve faxed a tribunal claim at ten pm on the last day, and gone home suffering from palpitations. This chap’s representative was not so lucky, submitting a claim online only for it to arrive at eight seconds past midnight.
There are two issues to come out of this, the first of which is whether three months is enough. Sue someone for personal injury, you get three years, sue them on a contract you get six years. Why the very short timescale for unfair dismissal? This is especially true when the fact you’ve been sacked is likely to have turned your life upside down anyway, and you may be a bit too busy signing on, going to interviews and paying the bills to fill that form in. Limitation periods in general are a good thing, but let’s all take a step back: would six months really cause anyone any problems? No.
The second point is that a Claimant would, again, be mad to use a representative that is unregulated. This representative won’t be insured, qualified, or regulated by any body to which you can make complaints. In practice I once saw a no-win/no-fee representative under-settle a Claimant’s case without her authority, then promptly go into liquidation without paying her anything at all. Solution? None. If you’ve a tribunal claim, then you should:
- See if your home insurance includes legal expenses insurance - bingo, your case is paid for;
- See if a non-profit organisation, like your local law centre, CAB, or a charity will do it;
- Ask all your friends if they know a good solicitor for employment law; or if none of them do:
- Find one you like the look of that specialises in it. Employment isn’t something you can do as a sideline. If you think your last solicitor would be a good choice because he did such a thorough job of your conveyancing, and because his musty office reminds you of visits to your grandparents when you were small, then think again.
I don’t want to be unfair, there are no doubt many good non-solicitor organisations out there doing a good job. Until the cowboys pack up and leave town though, steer clear.